Trotter v. Honor

• Decision Date: 14 December 1906
• Parties: TROTTER v. GRAND LODGE OF IOWA LEGION OF HONOR.
• Court: Iowa Supreme Court

132 Iowa 513

109 N.W. 1099

TROTTER

v.GRAND LODGE OF IOWA LEGION OF HONOR.

Supreme Court of Iowa.

Dec. 14, 1906.

Appeal from District Court, Page County; W. R. Green, Judge.

Action at law upon a beneficiary certificate issued by defendant to George E. Trotter, and payable upon his death to his wife who is the plaintiff herein. There was a judgment for the defendant, and plaintiff appeals. Reversed.W. P. Ferguson, and Earl R. Ferguson, for appellant.

W. S. Ingersoll and Parslow & Peters, for appellee.

WEAVER, J.

The facts in the case are substantially without dispute. The defendant is a fraternal life association, doing business in this state, and upon certain specified conditions and considerations, insures the life of each of its members in a sum not exceeding $2,000, payable upon his decease to a designated beneficiary. The membership of the association is organized into local societies, or lodges, under the general headship or government of a Grand Lodge, having jurisdiction of the order within the state. The fund from which benefit certificates are paid is accumulated by assessments made by the Grand Lodge not oftener than one each month. The by-laws of the association provide that notice of each assessment shall be sent out to the membership on the 1st of the month for which it is called, and that any member failing to pay the same on or before the 28th day of each month shall be held to be delinquent. Each local lodge has an officer known as the “financial secretary,” whose duty it is to collect the assessments. The laws of the association are not fully disclosed in the record, but we draw the inference from what is shown that, in the regular order of business, it is made the duty of the financial secretary on the 28th day of each month to pay over the assessments collected by him to the local treasurer, who transmits the same to the proper officer of the Grand Lodge. It is also provided that any member of a lodge “in arrears in the payment of assessments or dues on the 28th day of the month upon which the same has been called, shall, from that date, stand suspended from all rights and benefits under his or her certificate of membership, and it shall be the duty of the financial secretary to mark such members suspended upon his or her book from that date, without action of the lodge, and such member so in arrears shall remain suspended until he or she shall lawfully be reinstated.” It is further provided that any member who has become thus delinquent may renew his certificate at any time within three months thereafter upon payment of all arrears and furnishing a proper certificate of health, if such certificate be required of him. After a suspension of three months, the delinquent desiring reinstatement is required to submit to a new medical examination. Another section provides that any member in arrears for the period of six months shall stand suspended from all benefits and privileges in the society and that his or her certificate shall be reported to the Grand Secretary as annulled, and the member shall not be again admitted “except as provided in this article.” Immediately following this provision, it is enacted that “any member suspended by reason of nonpayment of dues or arrearages or beneficiary assessments applying to be reinstated shall pay the amount he or she was in arrears at the date of the suspension, and all other arrearages and in addition thereto a sum not less than $5.” By still another section, it is provided that any member “neglecting to pay and in arrears to the lodge to the amount of three months' dues or more * * * shall stand suspended from all benefits and privileges until the payment of all arrearages up to the time of reinstatement,” in accordance with the rules. Upon admission to the lodge each member is required to pay one advance assessment. It is made the duty of the financial secretary to keep a correct account between the lodge and its members, receive all moneys for the lodge, pay the same over to the local treasurer, taking vouchers therefor, and report the same to the recording secretary. He is also required to notify all members in arrears to the amount of three months' dues, and notify the local president of the fact. By section 5, art. 9, of the laws of the association, it is made the duty of the financial secretary on the 28th day of the month to “mark and report to the recording secretary the names of the members who are in arrears on such assessments, and the recording secretary shall place the same on the records of the lodge, and mark such certificates suspended on the certificate register book, affixing the date thereto. The financial secretary shall, upon receipt of any arrearages from the assessments, pay the same into the treasury (said amount from arrearages to be forwarded to the Grand Secretary upon the first order thereafter) and notify the recording secretary of the same, and the recording secretary shall so place it on the records of the lodge, and mark the certificate so paid ‘renewed’ on the certificate register book affixing the date thereto.”

The foregoing requirements of the association are all which the record before us contains, bearing upon the questions raised by the appeal. It appears that a local lodge of the association was organized at Shenandoah, in Page county, Iowa, on October 27, 1880, and the deceased George E. Trotter became a charter member. For some time prior to the death of said Trotter, this lodge had been reduced to six members, four of whom, it is alleged had removed from said town, leaving but two to transact the business of the lodge. Of these two the deceased acted as president of the lodge, and W. P. Ferguson as its financial secretary. There was, and for some years had been, no recording secretary or treasurer or other officer of such lodge except the president and financial secretary above named. In this situation it had been the custom, if not the duty, of the financial secretary to collect the assessments as they were made from time to time upon the membership of the lodge, and remit them direct to the Grand Secretary. This remittance was required to be made not later than the 15th of the month following the maturity of an assessment. Mr. Ferguson, the financial secretary of the lodge for a period of 10 years prior to death of Trotter, is a practicing lawyer and frequently away from home on the 28th of the month, and very frequently the assessments upon the deceased and other members were not paid until after the date, when, according to the letter of the by-laws, they were in arrears. But in all cases they were paid in time to be forwarded to the Grand Lodge within the time allowed for such remittance. The fact that these payments were frequently made after the 28th of the month was shown upon the books kept by the financial secretary. In no instance of such delinquency was the member treated as suspended, or as having forfeited his rights in the association, and no mark or entry of any suspension on account of such delinquency or of restoration or reinstatement to membership was ever entered upon any of the books or records of the lodge.

The deceased was in the mercantile business in Shenandoah, and it was the habit of the financial secretary to call at his store on or about the time he wished to make remittance to the Grand Secretary and receive payment of the assessment from the deceased, or from his partner or clerk. All assessments upon the deceased prior to June, 1904, were paid and remitted. On the morning of June 27, 1904, Mr. Ferguson left Shenandoah and went to St. Louis, Mo., where he remained until July 5, 1904. During his absence there was no one left in charge of his business who was authorized to receive or receipt for the assessments due from the lodge members. On the morning of July 6, 1904, Trotter, who had been in good health up to that time, died without having paid the assessment which became due on June 28th. On the following day the plaintiff, or the partner of the deceased, paid the amount of the June assessment to the financial secretary, who included the same in his report and remittance to the Grand Secretary. Formal proofs of the death of Trotter were furnished the Grand Lodge on July 13, 1904, but were not approved because the financial secretary had failed to sign and swear to a so-called “supplementary affidavit,” which had been called for, stating in effect that the June assessment had been paid on or prior to June 28, 1904. The Grand Secretary again called for said affidavit from the financial secretary, who declined to make it, and, on October 8, 1904, the amount of the assessment, which had been remitted on July 7, 1904, as aforesaid, was returned by the Grand Lodge to the financial secretary who tendered its return to plaintiff, but the same was refused.

1. As we understand the record, and the arguments presented, it is the theory of the appellee, and was the theory on which the trial court preceeded, that, upon the failure of the deceased to pay the June assessment on the 28th day of that month, he was by the automatic operation of the laws of the association at once suspended from membership therein, and his certificate became forfeited; and that this result is in no manner avoided by any practice, custom, or habit, which may have prevailed between him and the local lodge or its officers, as to the time when or the manner in which the assessments had been collected during the previous history of the lodge. We are not prepared to go to that length. What was the legal relation in which the financial secretary stood to the parties? Upon the answer to this inquiry depend very largely the force and effect of the conceded facts in the case. If he was simply the agent of the member paying the assessments, then, of course, the dealings between him and his principal could have no effect to avoid a forfeiture of the member's certificate for a neglect to observe...