The State ex rel. Taylor v. Daues

• Decision Date: 12 March 1926
• Citation: 281 S.W. 398,313 Mo. 200
• Parties: THE STATE ex rel. ISAAC F. TAYLOR v. CHARLES H. DAUES et al., Judges of St. Louis Court of Appeals
• Court: Missouri Supreme Court

281 S.W. 398

313 Mo. 200

THE STATE ex rel. ISAAC F. TAYLOR v. CHARLES H. DAUES et al., Judges of St. Louis Court of Appeals

Supreme Court of Missouri

March 12, 1926

Writ Dismissed.

Benj. J. Klene for relator.

(1) To state in a policy of life insurance that: "This certificate, together with the constitution and laws of the society, and all amendments to each thereof, and the application for membership, which is made part hereof, shall constitute the agreement between the member and the society," does not comply with the requirements of the statute. R. S. 1919, sec. 6405. (2) "If such a foreign fraternal beneficiary association is duly licensed in this State, it can issue certificates or policies as authorized by our laws, and as such can claim the benefit of such exemption, but if it issues a policy not authorized by our law it has no right to claim the exemption." Andrus v. Accident Assn., 283 Mo. 449; Ordelheide v. M. B A., 268 Mo. 346; Schmidt v. Foresters, 228 Mo 675; Pope v. W. O. W., 207 Mo.App. 597. (3) "In this State it is settled that it is not the nature of the society, but the terms of the contract in suit, which determines whether its exemption from the general statute shall apply in that case." Toomey v. Supreme Lodge, 147 Mo. 128; McDonald v. Life Assn., 154 Mo. 618. (4) "If the policy issued is not one authorized by law, the association issuing it cannot avail itself of the exemption given it in the law. This is reasonable, because an exemption is in the nature of a privilege granted, and such privilege ought not to be granted unless the association, in all its doings, comes in fairly under the law giving the exemption or privilege." Ordelheide v. M. B A., 268 Mo. 346; Andrus v. Assn., 283 Mo. 450. (5) "Being a Missouri contract, the statute then in force, with respect to the subject-matter of the contract entered into and became a part thereof, as much so as if copied therein." Cravens v. Ins. Co., 148 Mo. 583. (6) "The statute is not directory only, or subject to be set aside by the company with the consent of the assured, but is mandatory, and controls the nature and terms of the contract into which the company may induce the assured to enter." (Quoted with approval from Society v. Clements, 140 U.S. 233, in a case affecting a Missouri contract.) Schmidt v. Foresters, 228 Mo. 699.

W. Paul Mobley and A. W. Fulton for respondents.

(1) The opinion of the Court of Appeals is in complete harmony with the latest controlling decisions of the Supreme Court. State ex rel. Knights of Security v. Allen, 269 S.W. 388. (2) The opinion is in accord with previous decisions of the Supreme Court bearing upon the question involved. Armstrong v. Modern Bro. of Am., 245 Mo. 153; Wilson v. American Yeomen, 297 Mo. 655; Tice v. Knights of Pythias, 204 Mo. 349, 122 Mo.App. 85; Westerman v. Supreme Lodge, 196 Mo. 670. (3) If the contract made by the defendant association does not comply with the statute, yet there would be no logical reason for going to the extreme length of declaring its contract an old-line contract. If it could not be construed to be a fraternal beneficiary society contract, it then must necessarily be construed as a contract for insurance on the assessment plan, and contracts of assessment insurance are exempt from the statutory provision requiring deposit of premiums in court before making the defense of breach of warranty. R. S. 1919, chap. 50, art. 3; sec. 6164; Easter v. Am. Yeomen, 172 Mo.App. 292.

Seddon, C. Lindsay, C., concurs.

OPINION

SEDDON

The instant proceeding was begun here by relator for the purpose of having quashed the opinion and judgment of the St. Louis Court of Appeals in a cause entitled, Isaac F. Taylor, respondent, v. Security Benefit Association of Topeka, Kansas, appellant, in which cause relator had judgment in the Circuit Court of the City of St. Louis. The St. Louis Court of Appeals reversed the judgment nisi. [Taylor v. Benefit Association, 270 S.W. 132.] Relator contends that the opinion and judgment of the Court of Appeals contravene controlling decisions of this court.

The opinion of the Court of Appeals, which constitutes the record here, discloses and expressly finds that the Security Benefit Association is a fraternal beneficiary association organized under the laws of the State of Kansas and duly authorized to transact business in Missouri. The original action was brought by Isaac F. Taylor (relator here) to recover upon a death-benefit certificate in which he is the named beneficiary, issued by said association to relator's wife, Margaret F. Taylor, as the insured. The insured became a member of the beneficiary association on December 7, 1920. Her application for membership was taken at Eldon, Missouri, and the benefit certificate was delivered to the applicant at that place. The application for membership was signed by said Margaret F. Taylor and contains, among others, the following medical questions, with her answers thereto, concerning the state of her health and family and medical history:

"Q. Have you now or have you ever had la grippe, gallstones, palpitation of the heart, shortness of breath, any disease of the heart, or any symptoms of the disease of the heart? A. No.

"Q. Are you in good health at the present time? A. Yes.

"Q. Have you been under the care of or consulted any physician or surgeon concerning yourself within five years? A. Yes.

"Q. If so, what ailment, name and address of each physician and surgeon and give dates. A. Childbirth, December 5, 1918."

The questions and answers in the application are followed by this clause:

"And I hereby declare that the foregoing answers and statements are true, full and correct, and I acknowledge and agree that the said answers and all statements shall be held to be warranties, and with this application shall be considered a part of my beneficiary certificate, and together with the constitution and laws of the association as now existing or hereafter amended or enacted shall constitute parts of my contract with the association."

Pursuant to the uniform practice of the association, the above-mentioned application for membership was taken by the examining physician, partly in the form of medical questions and answers relating to the applicant's present and antecedent condition of health, as well as that of her children, ancestors and other relatives, and when so taken was signed by applicant, and was then sent by the examining physician to the head office of the association. The examining physician also made a report of his personal objective examination of the applicant, which was signed by the physician, but not by the applicant. It also was sent to the head office of the association. When the application, signed by the applicant, and the physician's report of his personal objective examination of the applicant were received by the head office of the association, they were first delivered to the national medical examiner of the association and, after having been examined and approved by him, they were then delivered by him to the national secretary, who thereupon issued the benefit certificate in question.

The benefit certificate, insofar as it bears upon the legal question before us, is as follows:

"In consideration of the pledges and agreements of the said member, and in further consideration of the first monthly contribution of $ 1.80 paid before or at the time of the delivery of this certificate, and thereafter $ 1.80 to be paid monthly to the financier of the local council, the Security Benefit Association promises to pay a death benefit to Isaac F. Taylor, related to said member as husband, in the sum of one thousand dollars, within ninety days after receipt of satisfactory proof of the death of said member while in good standing and not in default of the payment of required contributions.

"This certificate, together with the constitution and laws of the society, and all amendments to each thereof, and the application for membership, which is made a part hereof, shall constitute the agreement between the member and the society."

The insured, Margaret F. Taylor, died on February 11, 1922, her death being caused by gallstones and valvular disease of the heart. It was shown in evidence by the beneficiary association that insured was under the treatment of a physician in March and June, 1920; that at these times, while under treatment, she was at her home confined to bed; that the treatment was for influenza or la grippe, enemia and endocarditis, with which she was suffering at the time of the treatment; that endocarditis is an inflammation, acute or chronic, of the lining of the heart; that at the time of these treatments the insured also exhibited symptoms of gallstones or a diseased condition of the gall bladder. Relator, at the trial nisi, admitted that insured was under treatment of a physician in March, 1920, for influenza, or la grippe, and also that she was under the treatment of a physician in June, 1920, which dates are less than one year prior to the signing of her application for membership in the association.

The beneficiary association or society defended upon the ground of breach of the warranties contained in insured's signed application for membership, relating to her condition of health and treatment by a physician prior to the issuance of the benefit certificate sued upon by relator as beneficiary. Relator insisted nisi, upon appeal, and still insists in the instant proceeding, that the benefit certificate does not comply with the statute relating to fraternal beneficiary associations in that it does not, in express words, provide that the medical examination signed by the applicant, shall constitute a part of the agreement of insurance between the society and...