Thompson v. Modern Brotherhood of America

• Decision Date: 03 May 1915
• Parties: ANNIE E. THOMPSON, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant
• Court: Kansas Court of Appeals

176 S.W. 506

189 Mo.App. 15

ANNIE E. THOMPSON, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant

Court of Appeals of Missouri, Kansas City

May 3, 1915

Appeal from Livingston Circuit Court.--Hon. A. B. Davis, Judge.

AFFIRMED.

Judgment affirmed.

Fred S Hudson and Sparrow & Page for appellant.

(1) The by-laws, as well as all other sections and provisions thereof, including the terms of the application, were a part of the benefit certificate issued to Thompson, and a part of the contract between him and appellant. Richmond v. Sup Lodge, 100 Mo.App. 19; Laker v. Royal Fraternal Union, 95 Mo.App. 353; Loyd v. M. W. A., 113 Mo. 19; Gallop v. Royal Neighbors, 167 Mo.App. 85. (2) Thompson was conclusively presumed to know the provisions of these by-laws. Curtain v. Grand Lodge, 65 Mo.App 297; Boyce v. Royal Circle, 99 Mo.App. 349; Burkholter v. Travelers Ass'n., 139 Mo.App. 606; Shartle v. M. B. A., 139 Mo.App. 433; Day v. Woodman Circle, 174 Mo.App. 260; M. W. A. v. Tevis, 117 F. 369; 54 C. C. A. 293.

B. B. Gill & Son, S. L. Sheetz and Frank Sheetz for respondent.

(1) After knowledge that Thompson had engaged in the liquor business, appellant retained $ 28 dues paid to it by him and thereby waived his conduct. Righter v. Loyal Protective Association, 131 Mo.App. 498; Rhodus v. Life Ins. Co., 156 Mo.App. 281; Keys v. National Council, 174 Mo.App. 671. (2) The subordinate lodge is the agent of appellant and appellant is bound by its notice, knowledge and consent. High Court L. O. F. v. Schwitzer, 117 Ill. 325, 49 S.E. 506; Jones v. Supreme Lodge, 86 Me. 193; Benefit Society v. Watson, 84 N.E. 29; Supreme Lodge v. Withers, 177 U.S. 260; Modern Woodmen v. Breckenridge, 10 L.R.A. (N. S.) 136; Order of Columbus v. Fuqua, 60 S.W. 1020. (3) The appellant by its conduct in receiving the dues of Thompson for years led him to believe that he was a member of defendant order and entitled to its benefits. Shartle v. Modern Brotherhood, 139 Mo.App. 440; Johnston v. Modern Brotherhood, 27 L.R.A. (N. S.) 446. (4) Notice will be presumed when the violation of a by-law has been continued for years. Shartle v. Modern Brotherhood, 139 Mo.App. 440; Johnson v. Modern Brotherhood, 27 L.R.A. (N. S.) 446. (5) Appellant waived forfeiture by permitting and requiring respondent to go to expense of making proof of death and costs of a law suit without denying liability. Keys v. K. & L. of Security, 174 Mo.App. 680; McCullum v. Niagara Ins. Co., 61 Mo.App. 352.

OPINION

TRIMBLE, J.

This action rests upon a fraternal benefit certificate issued by appellant on March 12, 1906, to respondent's husband, John W. Thompson, who was then in the coal and feed business at Excelsior Springs. He died at Chillicothe, Missouri, April 13, 1913.

The by-laws under which the certificate was issued, and by which it was governed provided that all insurance became, ipso facto, null and void if the holder of the certificate engaged in the sale of intoxicating liquor as the proprietor of a saloon.

Thompson, at the time of his death, was a saloon keeper in Chillicothe. Appellant refused to pay the certificate on the ground that his insurance was forfeited. Respondent contended that such forfeiture was waived. This issue of waiver or no waiver was submitted to the court, siting as a jury, and its finding was in favor of respondent.

The answer to the question whether a fraternal beneficiary association has waived the forfeiture of a benefit certificate for a violation of the contract of insurance, depends upon the particular facts in each case.

Thompson became a member of appellant's subordinate lodge No. 1583 at Excelsior Springs and his policy or certificate was delivered to him there on March 15, 1906. In April or May, 1907, he bought a saloon at Excelsior Springs and openly engaged in that business and continued therein. His saloon was located one block from the post office across the street from the city hall on Thompson avenue, one of the most frequented and public thoroughfares of that little city. His business was advertised in the local papers and it was common talk over the town that he was in that business. The president of the local lodge admitted he knew it; the examining physician at that time and who still holds that position, testified that he knew it, and that he so informed the secretary whose duty it was to collect the premiums from each member and remit them to the head office. This secretary's predecessor also knew it at the time he was in office or was acting as such secretary in charge of the books and engaged in collecting and remitting premiums from the members including Thompson. In fact, there was abundant evidence from which the court sitting as a jury could find that the fact that Thompson was running a saloon was well known in that community and to all the members and officers of the subordinate lodge. Nevertheless he was treated as a member in good standing in said lodge, and his dues were regularly received and remitted to the head office by the local lodge's secretary, down to the time he died.

Under the by-laws, no action on the part of either the subordinate or supreme lodges was necessary to carry into effect the forfeiture arising from the engagement in such prohibited occupation; and neither the subordinate lodge nor any of its officers had any authority to waive the same. The power to thus expressly limit the authority of subordinate lodges whether considered as agents of the association or of the insured, is granted by section 22 of the Act of March 30, 1911, relating to fraternal beneficiary associations. Laws 1911, page 212. It follows, therefore, that mere knowledge on the part of the subordinate lodge of Thompson's business and the acceptance by that lodge of his premiums with such knowledge, would not constitute a waiver of the forfeiture unless there was evidence from which the trier of fact could reasonably infer that the supreme lodge or some one of its general officers knew the facts or was aware of that course of conduct. And this seems to be the holding even in cases where the above cited statute had no application. [Burke v. Grand Lodge A. O. U. W., 136 Mo.App. 450, l. c. 457; Knode v. Modern Woodmen, 171 Mo.App. 377; Modern Woodmen v. Tevis, 117 F. 369; Griffith v. Royal Arcanum, 166 S.W. 324; Brittenham v. Woodmen of the World, 167 S.W. 587; Gilmore v. Modern Brotherhood, 171 S.W. 629.] Consequently, unless there is room in the evidence for a reasonable inference on the part of the trier of fact that the association itself knew the situation, the mere knowledge of the subordinate lodge and its continued acceptance of Thompson's dues would not of itself create a waiver. As to whether there is room for such an inference, it should be noted that Thompson was openly engaged in the business, with slight interruptions, for five or six years prior to his death; that it was so open and public that if the Supreme Lodge exercised any supervision over the local lodge at all it was likely to learn of the course it was pursuing. Under the by-laws the Supreme Lodge had concurrent jurisdiction with the subordinate lodge over the members in matters of discipline. It had power to revoke the charter of any subordinate lodge for reasonable cause in all matters pertaining to the welfare of the society. It could suspend subordinate lodges, remove its officers and appoint others temporarily in their places. If a secretary knowingly received premiums from a member who was engaged in a prohibited occupation it was the duty of the subordinate lodge to expel him, and when once expelled he was ineligible for membership ever after. If a subordinate lodge failed to expel him the Supreme President could suspend the lodge until it had done so. The business of the society with its members was transacted entirely through the subordinate lodge and its officers, and the collection of the premiums assessed was done through them. If now any supervision whatever was exercised over the subordinate lodges to see that they were obeying the rules, the fact that Thompson was being retained by his lodge although he was a saloon keeper would have been at once discovered. And the fact that the lodge continued for five or six years to collect insurance premiums from him in spite of his prohibited occupation would tend to show either that the Supreme Lodge was exercising no supervision whatever over the local lodge or did not want to know whether the rules were being obeyed in that respect or not. Now, appellant did not put any evidence in to show affirmatively that it had not received from any source whatever notice that Thompson was a saloon keeper. It merely contented itself with asking the officers of the subordinate lodge if they ever notified the Supreme Lodge or any of the general officers of that fact. This, however, did not show...