Tennison v. Home Benefit Ass'n

• Decision Date: 19 March 1925
• Docket Number: (No. 165.)
• Citation: 272 S.W. 280
• Parties: TENNISON v. HOME BENEFIT ASS'N OF HILL COUNTY et al.
• Court: Texas Court of Appeals

272 S.W. 280

TENNISON v. HOME BENEFIT ASS'N OF HILL COUNTY et al.

(No. 165.)

Court of Civil Appeals of Texas. Waco.

March 19, 1925.

Rehearing Denied April 30, 1925.

Appeal from District Court, Hill County; Horton B. Porter, Judge.

Action by George Tennison, guardian of the estate of John G. Wade, against the Home Benefit Association of Hill County and another. Judgment for defendants, and plaintiff appeals. Affirmed.

Frazier & Averitte, of Hillsboro, for appellant.

Morrow & Stollenwerck and T. H. Jackson, all of Hillsboro, for appellees.

STANFORD, J.

The Home Benefit Association of Hill County, Tex., an unincorporated local mutual aid association, on April 16, 1920, issued to Rosalie Wade a certificate of insurance in said order, as follows:

"Class A.

                "Policy No. 926.                       Age 21
                

"Series One. "Home Benefit Association of Hill County, Texas.

                             "Hillsboro, Texas, April 16, 1920
                

"This certifies that Rosalie Wade is this day admitted a member of this association, conditioned:

"First. She agrees to pay assessments, levied by the directors, of $1 upon the death of each member and 10 cents for expenses, total $1.10 each member, within 10 days from call, and agrees further that failure to pay any assessment so levied, within 10 days from date of call, shall forfeit all claims as a member of this association, and she agrees that the constitution and by-laws of this association shall be a part of this contract.

"Second. She agrees to a stipulation that this certificate shall only bind the association to pay to John G. Wade (husband), the sum of one dollar for each member in good standing at the time of her death, and should two or more deaths occur between assessments, the beneficiary of each, in priority as fixed by date of death, shall be entitled to the amount collected on each succeeding assessment, one assessment for each death, said amount not to exceed $1,000, should she die in good standing in the association.

                      "[Signed]  Will I. Satterfield, President
                         "Attest: T. W. Mitchell, Secretary
                

"I accept this certificate, subject to conditions above set forth.

"Annual dues, $1.00, payable November 15th of each year."

The assured, Rosalie Wade, died May 20, 1922. This suit was filed by John G. Wade, husband of Rosalie Wade, and beneficiary in said certificate, against the Home Benefit Association of Hill County and Will I. Satterfield, its president, for $1,000, the amount claimed to be due on said certificate. The said John G. Wade having been adjudged a non compos mentis, George Tennison was appointed guardian of his estate, and as such guardian was substituted as plaintiff in said cause. The trial court submitted the case to the jury on the following special issues:

"(1) Did Rosalie Wade pay the defendant company assessment No. 41 levied by the secretary of said company? Answer `Yes' or `No.'" To which the jury answered: "No."

"(2) Did the defendant company notify Rosalie Wade of assessment No. 42 levied by the secretary of said company? Answer `Yes' or `No.'" To which the jury answered: "Yes."

The trial court entered judgment for defendants, appellees herein. Other facts of the case will be stated in our consideration of the assignments of error.

Opinion.

By several assignments of error, appellant contends that assessments Nos. 41 and 42 were not levied by the board of directors of appellee, the Home Mutual Benefit Association, and by reason thereof said assessments were illegal, and no forfeiture could occur by reason of their nonpayment. Home benefit associations, operating upon the assessment plan, are organized in this state under the provisions of article 4859, Vernon's Annotated Civil Statutes, 1922 Supplement. Such organizations are different from most fraternal organizations, in that they do not operate through the lodge system — a grand lodge and subordinate lodges — in fact, they have no lodges. Their plan of organization and operation is not complicated — intended to be understood by those not learned in the law. They have no salaried officers, unless it be the secretary, who must necessarily give a large part of his time to the promotion of the interests of a local organization. They are not organized for proffit, but for the sole benefit of their members. They are also what their name implies — home benefit associations. Each organization is local in its operation, and is prohibited by statute from being directly or indirectly connected, federated, or associated with any other such organization. Each local mutual aid association is subject only to its own constitution and by-laws, prepared and adopted by its own board of directors. It depends exclusively upon the prompt payment of the assessments to satisfy the certificate of deceased members, and only by the prompt payment of these assessments, at the time and in the manner provided by the by-laws and constitution, can it maintain its solvency and carry out the worthy purposes for which it was organized. The only way it has of enforcing payment of assessments is by providing in its contracts for forfeiture of benefits for nonpayment of assessments.

The constitution and by-laws of the association is made a part of the insurance contract, and it was the duty of the assured to acquaint herself with their provisions, and to know what was required of her to keep her certificate in good standing. So, in determining what the contract was between the assured and the association, we can look only to the certificate and the constitution and by-laws. Splawn v. Chew, 60 Tex. 534; Pledger v. Business Men's Ass'n (Tex. Civ. App.) 198 S. W. 810; United Moderns v. Colligan, 34 Tex. Civ. App. 173, 77 S. W. 1032; Brotherhood of Railway Trainmen v. Cook (Tex. Civ. App.) 221 S. W. 1049; Sovereign Camp W. O. W. v. Nigh (Tex. Civ. App.) 223 S. W. 291. And the certificates and constitution and by-laws of different fraternal and local mutual aid associations differ to such an extent that reported cases are of but little aid. Hemphill County Protective Ass'n v. Richardson (Tex. Civ. App.) 264 S. W. 294; 29 Cyc. p. 98.

What was the intention of the appellee association in this case, as indicated by the certificate and constitution and by-laws, with reference to levying and collecting assessments? This is the sole question to be considered in determining the matters raised by these assignments. The constitution provides:

"The membership fee shall be $5 * * * to be used as follows: $1 shall be placed in the mortuary fund, 15 cents to be paid the medical director, and $3.85 to be paid to the secretary for expense of securing application."

And further:

"No certificate of membership shall be issued until twenty-five applications have been received, together with a membership fee of $5 each," applied as above indicated. "When a member dies, his beneficiary shall be paid $1 for each member in good standing, *...