Watts v. Equitable Mut. Life Ass'n of Waterloo

• Decision Date: 13 April 1900
• Citation: 82 N.W. 441,111 Iowa 90
• Parties: WATTS v. EQUITABLE MUT. LIFE ASS'N OF WATERLOO.
• Court: Iowa Supreme Court

111 Iowa 90

82 N.W. 441

WATTS

v.EQUITABLE MUT. LIFE ASS'N OF WATERLOO.

Supreme Court of Iowa.

April 13, 1900.

Appeal from district court, Polk county; Thomas F. Stevenson, Judge.

Action in equity upon a certificate of life insurance, in which the plaintiff is named as the beneficiary. There was a decree for the plaintiff. The defendant appeals. Affirmed.Bowen & Brockett and Baker & Ball, for appellant.

F. W. Paschal, for appellee.

SHERWIN, J.

On the 28th day of September, 1892, Dr. Jackson Watts held a certificate of membership in St. Stephen's Brotherhood, a mutual insurance company then doing business in this state. The plaintiff was the beneficiary named in the certificate. The defendant was at that time a corporation engaged in the same business. On the day named a written agreement was entered into by St. Stephen's Brotherhood and the defendant for a consolidation of the two companies. In this agreement the defendant stipulated to enter into a contract with each holder of a brotherhood certificate or policy to assume all liability on said policy; and on the same day a written agreement was entered into by Dr. Jackson Watts and the defendant as follows: “Whereas, Jackson Watts, of Des Moines, Polk county, Iowa, is a holder of certificate No. 332, issued by the St. Stephen's Brotherhood of Des Moines, Iowa, and as said brotherhood has entered into an agreement with the Equitable Mutual Life & Endowment Association of Waterloo, Iowa, whereby it has become consolidated with the Equitable Mutual Life & Endowment Association, said association assuming liability to such of its members as may enter into a contract therefor with the said Equitable Mutual Life & Endowment Association: It is therefore hereby mutually agreed by and between said holder and the Equitable Mutual Life & Endowment Association that from and after the signature hereunto by said holder, and the return of this to the said association, he shall become a member of said association, and said association assumes all liability under this certificate, said brotherhood being released from such liability. Said holder agrees to pay all future assessments, dues, or quarterly payments to the said Equitable Mutual Life & Endowment Association at its office in Waterloo, Iowa, in manner as provided by said certificate, and the conditions on the back of same; that all assessments shall be made upon the basis of published scheduled rates and dues of said brotherhood, and not otherwise. In the event of a claim hereon, it is agreed that the liability of the Equitable Mutual Life & Endowment Association, and payment by said association of benefits to beneficiary or holder of a certificate issued by said brotherhood, shall be governed by the terms of said certificate, and conditions on the back thereof, and by the articles of incorporation and by-laws of the Equitable Mutual Life & Endowment Association, as same now are, or may be hereafter amended, and not by the articles of incorporation and by-laws of the said brotherhood; the same now being obsolete, by reason of discontinuance of the organization. It is also agreed that for all claims based on accidental injury, whether partial or total disability, said holder shall be considered a member of the accident department, only, of the Equitable Mutual Life & Endowment Association, and for all death claims, a member of the life department; that, in event of forfeiture of membership from any cause, said holder agrees that reinstatement shall be had only by compliance with rules and requirements of the Equitable Mutual Life & Endowment Association.” The St. Stephen's Brotherhood certificate was issued to Watts in October, 1889, when he was 49 years of age, and the rate of assessment was therein fixed at 98 cents per $1,000. By the articles of incorporation of the defendant, the rate of assessment was fixed at $1.12 per $1,000 for a person 49 years old, and at the rate of $1.28 per $1,000 for a person 52 years of age,--the age of Watts at the time of his contract with defendant. It is contended by the appellant that the contract of consolidation above referred to, and the contract of reinsurance with Dr. Watts, are ultra vires and void, and that the plaintiff cannot have the relief sought, for this reason.

As to the contract of reinsurance, it is claimed:

(1) That no medical examination was made of Watts, as required by defendant's by-laws. This is true. But a corporation may waive the provisions of its by-laws, and the defendant must be held to have done so in this case. Morrison v. Insurance Co., 59 Wis. 162, 18 N. W. 13;Weiberg v. Association (Minn.) 76 N. W. 37.

(2) That, by the terms of the certificate, Dr. Watts' assessments were limited to 12 per year, which limit was in violation of the law governing defendant in relation thereto. This contention of the defendant cannot be sustained, for the reason that we do not so construe the certificate. We think no limit is therein placed upon the number of assessments for death during the year. If the defendant misconstrued its rights under the contract, it certainly cannot be heard to say that its contract is ultra vires for that reason.

(3) That the rate of assessment provided for in the certificate adopted by it was lower than required by its articles of incorporation. This point we will consider later on.

It may be conceded for the purpose of this case that neither the articles of incorporation nor the by-laws of the defendant gave its board of directors any express power or authority to make such a contract of consolidation as it did, or gave it express power to reinsure Watts on the terms it did. In the reinsurance of Watts, his...