Whitmire v. Lawrence, Etc., Counties Mut. Ben. Ass'n

• Decision Date: 31 August 1926
• Docket Number: No. 4063.,4063.
• Citation: 286 S.W. 842
• Parties: WHITMIRE v. LAWRENCE, BARRY AND STONE COUNTIES MUT. BEN. ASS'N.
• Court: Missouri Court of Appeals

286 S.W. 842

WHITMIRE v. LAWRENCE, BARRY AND STONE COUNTIES MUT. BEN. ASS'N.

No. 4063.

Springfield Court of Appeals. Missouri.

August 31, 1926.

Appeal from Circuit Court, Lawrence County; Charles L. Henson, Judge.

Action by Fred Whitmire against the Lawrence, Barry and Stone Counties Mutual Benefit Association. Judgment for defendant, and plaintiff appeals. Reversed and remanded, with directions.

Thurman L. McCormick, of Kansas City, and R. V. McPherson, of Aurora, for appellant.

E. J. McNatt, of Aurora, for respondent.

BAILEY, J.

This is a suit on a contract of insurance brought by the beneficiary, the son of the insured. The defendant was an unincorporated mutual benefit insurance society organized in 1901. Defendant first filed a demurrer to the petition setting up, among other things, that the petition shows on its face that the defendant is not a legal entity and is incapable of being sued. The record fails to show any action taken by the court on this demurrer, but since defendant answered over, it may be assumed the demurrer was abandoned. It is doubtful whether this action, if the point were preserved, could be maintained against an unincorporated society of this character since it possesses none of the earmarks of a fraternal organization. See Wichtuechter et al. v. Miller et al.; 276 Mo. 322, 208 S. W. 39. No such point is raised and we hold, therefore, that defendant, for the purposes of this action cannot now stand on that plea.

The parties agreed to certain facts, in open court, as follows:

"It is admitted:

"That Mary L. Whitmire was member of said association, in good standing, at the time of her death, and had been for many years prior thereto, and that all of her dues were fully paid.

"That the plaintiff, Fred Whitmire, was the beneficiary under her certificate.

"That the said Mary L. Whitmire died on the 16th day of January, 1924. That Fred L. Whitmire, as such beneficiary, has been duly paid the sum of one thousand dollars ($1,000). That the sums collected on assessments on her death was $1,432.60, over and above the sum of 15 cents per capita for each member in such association, which was deducted as costs of the collection.

"That section 11 of the by-laws, prior to January 7, 1924, read as follows: `Section 11. The amount of benefits which this association pays to the beneficiary shall be the amount of one assessment less 10 cents of each member's assessment to pay the secretary for the expenses of collection of said assessment, also five cents to each member to pay other officers, according to section 4. Unless the death of the member be caused directly as the result of his intoxication from the use of intoxicating liquor, Then in such case any benefit otherwise accruing from such membership in this association shall be declared forfeited.'

"That on January 7, 1924, the by-laws were changed at an annual meeting of the members of such association, and that it now reads as pleaded in the petition: `Sec. 11. The amount of benefits which this association shall pay to a beneficiary shall be the amount received under the assessment made for the purpose, less 15 cents deducted from each member's assessment for expenses as herein provided, but shall in no event exceed the total sum of one thousand dollars ($1,000); any sum in excess of one thousand dollars ($1,000) received under an assessment shall be placed in the surplus funds of the association and shall be used for the payment of the benefits accruing subsequently thereto. Unless the death of the member be caused directly as the result of his intoxication from the use of intoxicating liquor, then in such case any benefit otherwise accruing from such membership in this association shall be declared forfeited.'"

The trial was to the court and resulted in a judgment for defendant, from which plaintiff has appealed.

Additional facts brought out on the trial indicate that the only contract existing between the insured and defendant consisted of the by-laws of the organization. Section 17 of these by-laws provides that the by-laws could only be changed at annual meetings or at a special meeting after 30 days' notice. The change in the by-laws heretofore indicated occurred at an annual meeting of the association, and so far as appears the action taken was proper. Defendant and plaintiff had some correspondence relative to the payment of the benefit, and defendant refused to pay more than $1,000, for which amount a check was sent plaintiff; this check had written thereon, "Payment in full benefits of Mrs. Mary L. Whitmire." It was dated August 21, 1924, and retained by plaintiff until finally cashed, with his indorsement, on December 12, 1924.

But two questions are presented to this court for review, viz.: (1) Was the insured bound by the change in the by-laws made' at the annual meeting of defendant association a few days prior to her death, reducing the maximum benefits to $1,000? (2) Did the acceptance and cashing of the check for $1,000 with the statement written thereon, "Payment in full benefits of Mary L. Whitmire," amount to an accord and satisfaction? No declarations of law were asked or given, and we are unable to determine upon what theory the case was decided.

It is first contended by plaintiff that defendant association is an insurance company doing business on the assessment plan, within the meaning of section 6155, R. S. Mo. 1919. There can be no question that defendant association was doing business on a plan whereby the benefits were dependent upon an assessment upon its members, and in that respect fell within the definition of an assessment company as defined by the statute referred to. But it was unincorporated and without the supervision of the state insurance department. In this respect it must be considered as an organization having no statutory authority to do business in this state and perhaps engaging in the insurance business in direct contravention of our laws. Sections 6308, 6309, 6155, R. S. Mo. 1919. But whether it was doing business illegally or not, its contracts may be enforced the same as those made by any licensed insurance company or society. Schmidt v. Foresters, 228 Mo. 675, loc. cit. 702, 129 S. W. 653. Its status was simply that of an unincorporated, unlicensed, voluntary society, organized for the purpose of mutual protection and with no object or hope of profit to any individual. It issued no certificate of insurance, but its contracts were evidenced only by its adopted by-laws. The by-laws, constituting the entire contract of insurance, must therefore be looked to in determining the question before us. Section 11 of the by-laws, heretofore set out, contained a definite, unequivocal promise to pay a certain benefit upon the happening of a particular contingency, to wit, the death of the insured. This benefit, at the time the insured became a member of the association, consisted of one assessment against all the members, less 15 cents of each member's assessment. It is agreed that at the time of the insured's death, under the original by-laws, the beneficiary of the insured was entitled to receive $1,432.60. Under section 11 of the by-laws, as amended on January 7, 1924, the amount of the benefit was changed and limited to the sum of $1,000. It is further admitted that neither the insured nor her beneficiary had any knowledge of the change in the by-laws and never gave their consent thereto either express or implied, unless it may be said the original by-laws contained a provision from which such consent may be implied or considered waived. The only provision in the by-laws that might possibly be so construed is contained in section 17, thereof, which, as heretofore indicated, simply provides that the by-laws may be changed at an annual or special meeting by a vote of the members present. No case called to our attention has gone so far as to hold that such a provision is sufficient to authorize a change in the bylaws decreasing the benefits without the express consent of the...