Supreme Lodge Knights of Honor v. Davis

• Decision Date: 15 May 1899
• Citation: 26 Colo. 252,58 P. 595
• Parties: SUPREME LODGE KNIGHTS OF HONOR v. DAVIS.
• Court: Colorado Supreme Court

58 P. 595

26 Colo. 252

SUPREME LODGE KNIGHTS OF HONOR v. DAVIS.

Supreme Court of Colorado

May 15, 1899

Appeal from district court, Arapahoe county.

Action by Fulton B. Davis, administrator, etc., against the Supreme Lodge Knights of Honor. From a judgment for plaintiff defendant appeals. Affirmed.

This action was originally brought by Mrs. Luie Davis, as plaintiff below, against defendant (appellant here), on a benefit certificate issued by the latter to one J. R. Davis in which she was designated the beneficiary. Plaintiff having died prior to the trial, her administrator was substituted. The defenses interposed are that she was not a legal beneficiary; that assured had misrepresented his age at the time he became a member of the order; that all rights under the certificate were forfeited by failure to pay the assessments thereon; and that satisfactory proof of the death of Davis had not been furnished, in accordance with the rules of the order, prior to the institution of this action. For reply, plaintiff pleaded that defendant had levied and received assessments after knowledge of the alleged misstatements regarding the age of assured; that all assessments prior to July, 1890, had been paid within the time required; that the assessments for that month were tendered in due time, but refused, upon the ground that Davis was no longer a member of the order. Verdict and judgment for plaintiff, from which defendant appeals.

Upon the record numerous errors are assigned by appellant, but those necessary to consider in connection with the incidental and collateral ones arising are embraced in the following (1) Action of the court in imposing a penalty of $100, as a condition precedent to permitting the answer to be amended. (2) Was Mrs. Luie Davis a legal beneficiary? (3) Misrepresentations of deceased, regarding his age, at the time he applied for admission to become a member of the order. (4) Forfeiture of rights under the certificate by failure to pay assessments. (5) Failure to furnish the required proofs of death, in accordance with the rules of the order. (6) Excluding and admitting evidence. (7) Giving and refusing instructions.upon just terms, allow pleadings to be amended. Appellant applied for leave to amend, which was granted on conditions. Held that, in accepting such conditions, appellant waives any error which the court may have committed in imposing a penalty as a condition precedent to the allowance of the amendment requested.

Frank J. Mott and Noah M. Given, for appellant.

H. N Haynes and J. C. Helm, amici curiae.

Thomas B. Stuart and Charles A. Murray, for appellee.

GABBERT J. (after stating the facts).

1. The application of appellant for leave to amend its answer was granted, conditioned upon the payment of $100 for the use of plaintiff. The penalty imposed was paid, and the answer amended. The Civil Code (section 75) provides that for cause the court may, upon just terms, allow pleadings to be amended. Its action in this respect may be the subject of review in a proper case, but, where the party making such application is granted leave conditionally, it is optional with him to accept or not, upon the terms imposed, and, if he assents thereto by complying with such conditional order, and avails himself of the leave granted, there is nothing to review. Having acquiesced in the judgment, he has waived any error which the court may have committed in the imposition of a penalty as a condition precedent to the allowance of the amendment requested. 1 Enc. Pl. & Prac. 648; Smith v. Rathbun, 75 N.Y. 122; Austin v. Wauful (Sup.) 13 N.Y.S. 184.

2. The appellant was originally incorporated by an act of the legislature of the state of Kentucky, and, under the charter thus granted any one could be named as beneficiary in benefit certificates which it might issue. Later the order was further incorporated under the laws of Missouri, by the laws of which state only members of the family of the assured, or some one dependent upon him, could legally be named as beneficiary. By its charter thus obtained the same limitations are reserved regarding beneficiaries that were imposed by the laws of that state. The original certificate was issued to deceased under the charter obtained from the state of Kentucky, but this was voluntarily surrendered, and one taken after appellant incorporated under the laws of Missoury, and is the one sued upon in this action. In this certificate deceased directed that the sum to be paid out of the widows' and orphans' benefit fund of the order should be paid to his daughter, Mrs. Luie Davis. The evidence established that she was his daughter-in-law, and it is contended by appellant that by reason of this fact, and further evidence on the subject of the relationship between deceased and the beneficiary, she was not a member of his family, within the legal acceptation of that term; and, as there was no evidence that she was in any manner dependent upon him for support, a recovery is precluded. There was no evidence that she was not dependent upon deceased; and even if it be true that, by virtue of the limitations imposed by the laws of Missouri and the charter of appellant in conformity therewith, only those belonging to the classes therein designated can be legally named as beneficiaries in the certificates issued by the order, that is a defense, and must be affirmatively established; for the presumption would be, in the absence of proof to the contrary, that the person named as the beneficiary is a legal one, and, notwithstanding the description by relation to the assured of the person thus designated may not have been strictly correct, was selected by him from a class authorized to take as such; and the burden is on the insurer to establish the contrary.

3. One of the defenses interposed by appellant was that deceased, at the time he became a member of the order, misrepresented his age. By the rules of the order, the amount of the assessments imposed upon each member whose beneficiary is entitled to share in the widows' and orphans' benefit fund is regulated by the age of the member at the time of his admission. They also provide that persons above a certain age at the time of their application for membership in the order cannot participate in this fund. The representations of deceased regarding his age when he applied to become a member were of that character, if shown to be false to his knowledge, as to render him ineligible to share in the insurance benefits of the order. In support of this defense, appellant sought to introduce the records of the Old Men's Home at Cincinnati, from which it appeared that deceased, when he entered that institution, had, in his own handwriting, recorded himself of such age that his statements regarding it when he entered the order were not true; which evidence was excluded, and this ruling of the trial court is one of the errors assigned by appellant. Whether or not this evidence should have been admitted depends upon the character of the business in which appellant is engaged, the relationship which the subordinate lodges and their officers bear to it, and what was established with reference to the knowledge of appellant regarding these misstatements. It appears from the evidence, which is uncontroverted, that in May, 1890, the beneficiary notified the financial reporter of the local lodge to which Davis belonged that the age of deceased was greater than represented when he became a member, and that, after this knowledge, the assessments for May and June following were received and retained. Appellant is a benevolent association, one object of which, upon the death of the assured, is to pay to the beneficiary named in the certificate issued the deceased a specified amount. This fund is supported by assessments on the members holding benefit certificates, and, when there is not sufficient to pay the amount called for by any certificate, notice is sent by the supreme lodge to each subordinate organization of that fact, and each member entitled to participate in such fund, and desiring to preserve that right, is then required to pay to the financial reporter of the subordinate lodge to which he belongs the amount of his assessment. Each lodge, through its proper officer, remits the amount so collected to the supreme lodge. In so far as the insurance feature of the organization is concerned, it is, in effect, a mutual life insurance company, and the general rules governing associations of that character control it in the transaction of this branch of its business. Com. v. Wetherbee, 105 Mass. 149; Bac. Ben. Soc. §§ 52, 146, 162.

A rule or by-law of the order recites that financial reporters and other designated officials of subordinate lodges, in collecting and forwarding assessments to the supreme treasurer, shall be the agents for the members of their lodges, and not the agents of the supreme lodge. It is not the mere recitation of a by-law which, alone, determines the relationship which officers or subordinate lodges sustain to the members, but, rather, the character of the business transacted by them, which must be considered in determining this question. Bac. Ben. Soc. § 153. The funds which are realized from the collection of...