Weiditschka v. Supreme Tent of Knihgts of MacCabees of the World

• Decision Date: 20 January 1920
• Docket Number: No. 32437.,32437.
• Citation: 175 N.W. 835,188 Iowa 183
• Parties: WEIDITSCHKA v. SUPREME TENT OF KNIGHTS OF MACCABEES OF THE WORLD.
• Court: Iowa Supreme Court

188 Iowa 183

175 N.W. 835

WEIDITSCHKA

v.SUPREME TENT OF KNIGHTS OF MACCABEES OF THE WORLD.

No. 32437.

Supreme Court of Iowa.

Jan. 20, 1920.

Appeal from District Court, Bremer County; J. J. Clark, Judge.

Supplemental opinion.

For former opinion, see 170 N. W. 300.Sager & Sweet, of Waverly, and Miller & Wallingford, of Des Moines, for appellant.

F. E. Farwell and F. P. Hagemann, both of Waverly, Henry Vollmer, of Davenport, and Pickett, Swisher & Farwell, of Waterloo, for appellee.

PER CURIAM.

Appellant suggests in its petition for rehearing that the conclusion reached in the opinion destroys the principle of uniformity as between the members and the members and the association, but does not explain how this will be brought about, save by citing Supreme Council of Royal Arcanum v. Brashears, 89 Md. 624, 43 Atl. 867, 73 Am. St. Rep. 244. On the trial of that case the beneficiary named in the certificate of insurance, suing for indemnity stipulated therein, offered in evidence a duly certified copy of chapter 281 of the Acts of 1895 of the state of Massachusetts, relating to misrepresentation in applications for membership in fraternal beneficiary associations, which read:

“When any certificate is issued to a resident of the commonwealth by any fraternal beneficiary corporation organized under the laws of or admitted to do business in this commonwealth, no oral or written misrepresentation or warranty made by the assured or in his behalf in the application for such certificate, or in the negotiation of the contract, shall be deemed material or defeat or avoid the certificate, or prevent its attaching, unless such misrepresentation or warranty is made with actual intent to deceive, or unless the matter misrepresented increased the risk of loss.”

The court held that this was admissible for that a certificate was issued by a Massachusetts corporation, and therefore the statute in question was applicable thereto, even though the act apparently applied only to cases where certificates of membership were issued to residents of Massachusetts, the court saying:

“The mutuality and fraternity which form the basis of mutual benevolent associations and kindred organizations require that all of their members shall be treated alike. It would be fatal to the whole benefit scheme of the Royal Arcanum if, when the case of the beneficiary of a Massachusetts member of the organization were on trial, his or her rights should be measured by a more favorable standard than would be applied to the beneficiary of a Maryland member. The regulations contained in the constitution and by-laws of the society contemplate like treatment of all of its members of the same class, without special favor or advantage to any, under a similar state of facts.”

Otherwise a certificate of insurance valid in Massachusetts must have been adjudged invalid in Maryland, and in Pennsylvania. Fidelity Mutual Life Association v. Ficklin, 74 Md. 180, 21 Atl. 680, 23 Atl. 197. It is to be noted, however, that there was no statute in Maryland interfering with this conclusion. In Missouri a statute providing that in suits on insurance contracts suicide by the insured shall not constitute a defense, unless contemplated when application therefor was made, notwithstanding a stipulation in the policy to the contrary, uniformly has been held applicable to suits on certificates issued by foreign fraternal associations. Schmidt v. Supreme Court, United Order of Foresters, 228 Mo. 675, 129 S. W. 653. This of necessity allows a defense in one state not available in another, and thereby seems to tolerate the inequality denounced in the Maryland decision, though doubtless on the ground that the foreign association in doing business in Missouri undertook to conform to its laws. Appellant also relies on Supreme Council of Royal Arcanum v. Green, 237 U. S. 531, 35 Sup. Ct. 724, 59 L. Ed. 1089, L. R. A. 1916A, 771, where the power of fraternal beneficiary associations to increase the assessments required to be paid was involved. Although the Supreme Judicial Court of Massachusetts had ruled in Reynolds v. Supreme Council of Royal Arcanum, 192 Mass. 150, 78 N. E. 129, 7 L. R. A. (N. S.) 1154, 7 Ann. Cas. 776, that the increase of assessments was within the power of the company. The court of Appeals of New York, in Green v. Supreme Council of Royal Arcanum, 206 N. Y. 591, 100 N. E. 411, ruled otherwise, and in this last case, on appeal to the Supreme Court of the United States, 237 U. S. 531, 35 Sup. Ct. 724, 59 L. Ed. 1089, L. R. A. 1916A, 771, Chief Justice White, in the course of his opinion, observed that--

“An assessment which was one thing in one state and another in another, and a fund which was distributed by one rule in one state and by a different rule somewhere else, would in practical effect amount to no assessment and no substantial sum to be distributed. It was doubtless not only a recognition of the inherent unsoundness of the proposition here relied upon, but the manifest impossibility of its enforcement which has led courts of last resort of so many states in passing on questions involving the general authority of fraternal associations and their duties as to subjects of a general character concerning all their members, to recognize the charter of the corporation and the laws of the state under which it was granted as the test and measure to be applied.”

The power to fix and collect assessments is fundamental in the organization of fraternal mutual insurance companies, and the court ruled that the New York court, in not giving to the charter as amended and the laws of Massachusetts as announced by its Supreme Judicial Court full effect, disregarded the full faith and credit clause of the Constitution. The soundness of the decision is beyond question. Any other ruling would impinge upon the principle of mutuality between members which is basic in the organization of all fraternal associations and would destroy that equality as between members which is essential to their continued existence. The trouble with appellant's contention lies in the assumption that any question touched in the cases cited is involved in ascertaining who is entitled to the stipulated indemnity. It is of no concern to other members whether, upon the death of a member, the benefit is paid to a beneficiary of one class or another. Nor is this...