Opinion
No. 32175.
April 20, 1936.
1. INSURANCE.
Member of fraternal benefit society, by failing to pay monthly assessment, ceased to be a member and ceased to be entitled to benefits under certificate.
2. INSURANCE.
Where it was custom of fraternal benefit society on payment of monthly dues to mark on receipt therefor amount due for succeeding month, it was duty of insured member to pay such amount when it became due or, if deemed incorrect, to tender correct amount without any other notice.
3. INSURANCE.
Where rights of beneficiary and liability of fraternal benefit society were fixed by certificate, constitution and by-laws, and society was brought into court by service on its local representative, society could rely on its certificate, constitution, and by-laws, notwithstanding it had not constituted insurance commissioner or any other person as its process agent.
APPEAL from circuit court of Hinds county. HON. J.P. ALEXANDER, Judge.
W.H. Cox, of Jackson, for appellant.
The court erred in giving effect to the by-laws and constitution of the appellee when a copy thereof was never filed with the insurance commissioner of this state as required by law.
Sections 5129, 5131, 5231, 5241, 5242, 5245, 5171, 5260, 5251, Code 1930.
If the appellee be correct in its contention that it is not required by the chapter on fraternal societies to file a copy of its constitution and by-laws with the Department of Insurance, which we do not concede, then it would be required to do so under section 5180, Code of 1930.
The appellant showed, without contradiction, that the appellee had not complied with the laws governing fraternal benefit societies in this state, and that the pretended constitution and by-laws proffered in evidence by the appellee were without force and effect because there had been no legal adoption thereof.
Sovereign Camp, W.O.W., v. Garner, 125 Miss. 8, 87 So. 458.
If the appellee were not amenable to the fraternal benefit laws of this state, as it contends, it must remain amenable to the general insurance laws. Section 5180, Mississippi Code of 1930, formerly appeared as section 2636, Mississippi Code of 1906, and later as section 5102, Hemingway's Mississippi Code.
Supreme Counsel of the Fraternal Mystic Circle v. Turner, 105 Miss. 468, 62 So. 497.
The appellee waived any right to forfeit the policy in suit for nonpayment of the August, 1932, assessment by not notifying insured of the actual amount thereof.
14 R.C.L. 980; 32 C.J. 1303, sec. 534.
A contract of life insurance is not a contract to be renewed from year to year by payment of premiums. The contract is entire, and a failure to pay a premium does not forfeit the policy unless the policy expressly so provides. Forfeitures are looked upon with disfavor.
Stonewall Life Ins. Co. v. Cooke, 165 Miss. 619, 144 So. 217; Owens v. New York Life Ins. Co., 126 Miss. 878, 89 So. 770.
The appellee notified the insured in July, 1932, when he paid his last premium, that the August, 1932, premium in dispute would be seven dollars and thirty-five cents. The appellee now contends that the August, 1932, premium was six dollars and fifteen cents. The appellee requested the court to allow it to amend said plea to show that the August, 1932, assessment was seven dollars and thirty-five cents, but no formal order was entered on the minutes of the court allowing such amendment. Under the laws of this state, said amendment was therefore not effected. It was indispensable that an order be entered on the minutes of the court to have effectd such amendment.
Gill v. Dantzler Lbr. Co., 153 Miss. 559, 121 So. 153; Oliver v. Miles, 144 Miss. 852, 110 So. 666; Sec. 724, Code of 1930; Reed v. Bankers Reserve Life Ins. Co., 192 Fed. 408; Iowa Life Ins. Co. v. Lewis, 47 L.Ed. 204.
Where the premium is, by the contract, subject to a deduction equal in amount to the dividend to which the insured is entitled, it is the duty of the company to give him such notice of the amount, that he may, in due time, pay or tender the balance of the premium.
Phoenix Ins. Co. v. Doster, 27 L.Ed. 65; 25 Cyc. 828; Insurance Co. v. Eggleston, 96 U.S. 577; 17 A.L.R. 231; Smith v. Union Central Life Ins. Co., 7 Ohio Dec. Reprint 188; Nall v. Provident Sav. Life Assur. Soc., 54 S.W. 109.
Where, by the terms of a policy of insurance, the insured is required to pay one-half of the annual premiums in cash and give a note for the other half, less his dividend or share of the profits, which is to be deducted from the amount for which he is to execute his note, the insurer is under obligation to give the insured notice of the amount which he is required to pay, before it can insist on a forfeiture.
Home L. Ins. Co. v. Pierce, 75 Ill. 426; Eddy v. Phoenix Mutual L. Ins. Co., 65 N.H. 27, 23 Am. St. Rep. 17, 18 A. 83.
A notice of the amount of a dividend is particularly requisite where it has been the uniform practice of the company to give such notice.
Meyer v. Knickerbocker L. Ins. Co., 73 N.Y. 516, 29 Am. Rep. 200, 51 How. Pr. 263; Atty.-Gen. v. Continental L. Ins. Co., 33 Hun. (N.H.) 138; Manhattan Life Ins. Co. v. Smith, 44 Ohio St. 156, 58 Am. Rep. 806, 5 N.E. 417, 9 Ohio Dec. Reprint 583; Nall v. Provident Savings Life Assur. Soc., 54 S.W. 109; Cavanaugh v. Security Trust Life Ins. Co., 10 Ann. Cas. 680; Manhattan Life v. Smith, 5 N.E. 417; Baxter v. Brooklyn Life Ins., 23 N.E. 1048; Meyer v. Knickerbocker Life Ins. Co., 73 N.Y. Supp. 516; Knobel v. North American Acc. Ins. Co., 20 L.R.A. (N.S.), 1037.
It is earnestly urged and submitted that the insured was entitled to notice to the exact amount of said August, 1932, premium as a prerequisite to any right of the appellee to have declared a forfeiture of said contract.
Mutual Reserve Life v. Hamlin, 35 L.Ed. 167; 14 R.C.L. 987; 32 C.J. 1307, sec. 544. J. Morgan Stevens and J.M. Stevens, Jr., both of Jackson, for appellee.
While the defendant brotherhood is an international labor union, which had existed for a long time, its beneficiary department is properly classified as a fraternal benefit society, and in fact meets the statutory definition of a fraternal benefit society, which is one operating on the lodge system with ritualistic form of work and representative form of government. The difference between such an organization and a regular life insurance company is at once manifest.
Royal Arcanum v. Behrend, 247 U.S. 394, 62 L.Ed. 1182, 1 A.L.R. 966; Head v. Providence Ins. Co., 2 Cranch, 127, 2 L.Ed. 229; Supreme Council v. Brashears, 89 Md. 924, 43 A. 866, 73 Am. St. Rep. 124; Hollingsworth v. Supreme Council of Royal Arcanum, 175 N.C. 615, 96 S.E. 81, Ann. Cas. 1918E, 401; K. of P. v. Mims, 241 U.S. 574, 60 L.Ed. 1179; 19 R.C.L. 1191, sec. 12; 5 C.J. 1335; State ex rel. v. Hicks, 70 S.E. 468, 33 L.R.A. (N.S.) 529; Brotherhood of Railway Trainmen v. Barnhill, 108 So. 456, 47 A.L.R. 270.
The brief benefit certificate issued to a member of the brotherhood is incomplete. It does not contain all of the elements of a final and binding contract without reference to the constitution. It provides no premium or assessments on its face or how long it will continue in force and as stated, all the rights and obligations of the parties are determined by the constitution and by-laws and therefore, both parties to this action must look to the constitution for their respective rights and remedies.
The plaintiff has not met the burden of proof and utterly failed to make out any legal or equitable case.
Clement v. Knights of Maccabees of the World, 113 Miss. 392, 74 So. 287; Alton v. Most Worshipful St. John's Grand Lodge, 135 So. 679; Brotherhood of Railroad Trainmen v. Bridges, 164 Miss. 356, 144 So. 554.
The defendant is a fraternal benefit society and as such not only the certificate sued on but the constitution is a part of the contract.
Chapter 206, Laws of 1916; Peterson v. Manhattan Life Ins. Co., 244 Ill. 329; Barrows v. Mutual Life Ins. Co., 151 Fed. 461; Supreme Lodge v. Mims, 241 U.S. 574; Thomas v. Knights of Maccabees, 149 P. 7, 85 Wn. 665, L.R.A. 1916A, 750; Miller v. National Council, 76 P. 799, 69 Kan. 234; Reynolds v. Royal Arcanum, 7 L.R.A. (N.S.) 1154, 78 N.E. 129, 192 Mass. 150; Clarkson v. Supreme Lodge, 82 S.E. 1043, 99 S.C. 134; DeGraw v. I.O.F., 182 Mich. 366, 148 N.W. 703; Holt v. Supreme Lodge, 235 Fed. 885; Newman v. Supreme Lodge, 70 So. 241, 110 Miss. 371; Supreme Council v. Green, 237 U.S. 531, L.R.A. 1916A, 771; Wineland v. K.O.T.M., 148 Mich. 608, 112 N.W. 696; Supreme Lodge K. of H. v. Bieler, 105 N.E. 244, 53 Ind. App. 550; Fullenweider v. Royal League, 180 Ill. 621, 54 N.E. 485; Champion v. Hannahan, 138 Ill. App. 387; Mock v. Supreme Council R.A., 121 App. Div. 474, 106 N.Y. Supp. 155; Messer v. Grand Lodge, 180 Mass. 321, 62 N.E. 252; Miller v. National Council K. L. of S., 69 Kan. 234, 76 P. 830; Supreme Ruling Mystic Circle v. Ericson, 131 S.W. 92; Williams v. Supreme Council C.M.B.A., 152 Mich. 1, 115 N.W. 1060; Conner v. Golden Cross, 117 Tenn. 549, 97 S.W. 306; Shepperd v. Bankers' Union, 77 Neb. 85, 108 N.W. 188; Supreme Lodge K. of P. v. Knight, 117 Ind. 489, 3 L.R.A. 409, 20 N.E. 279; Woodmen of the World v. Woods, 34 Colo. 1, 81 P. 261; Barbot v. Mut. Res., etc., Assn., 100 Ga. 681, 28 S.E. 498; Mutual Reserve Fund Life Assn. v. Taylor, 99 Va. 208, 37 S.E. 854; Richmond v. Supreme Lodge, 100 Mo. App. 8; Haydel v. Mutual Reserve Fund Life Assn., 98 Fed. 220; Haydel v. Mutual Reserve Fund Life Assn., 104 Fed. 718; Odd Fellows Benefit Assn. v. Smith, 58 So. 100; National Council of Knights Ladies of Security v. Smiley, 100 So. 153; Locomotive Engineers Mutual Life Acc. Ins. Assn. v. Hughes, 77 So. 352; Columbian Mutual Life v. Harrington, 139 Miss. 826, 104 So. 297.
There was no cash surrender or loan value to the certificate.
Mixon v. Sovereign Camp, W.O.W., 155 Miss. 841, 125 So. 113; Independent Order of Sons Daughters of Jacob of America v. Moncrief, 96 Miss. 419, 50 So. 558.
There is no necessity of notice where the provisions of the constitution and by-laws are self operating.
8 A.L.R. 398.
Chapter 204, Laws of 1916, brought forward as article 14 with some slight amendments in the Code of 1930 expressly exempts a society within the classification of the brotherhood.
Allgeyer v. Louisiana, 165 U.S. 578, 41 L.Ed. 832; New York Life Ins. Co. v. Head, 234 U.S. 149, 58 L.Ed. 1259, 34 Sup. Ct. Rep. 879; Provident Sav. Life Assur. Soc. v. Kentucky, 239 U.S. 103, 60 L.Ed. 167, L.R.A. 1916C, 572, 36 Sup. Ct. Rep. 34; New York L. Ins. Co. v. Dodge, 246 U.S. 357, 62 L.Ed. 772, 39 Sup. Ct. Rep. 337, Ann. Cas. 1918E, 593; St. Louis Cotton Compress Co. v. Arkansas, 260 U.S. 346, 67 L.Ed. 297, 43 Sup. Ct. Rep. 125; Hyatt v. Blackwell Lbr. Co., 31 Idaho, 452, 1 A.L.R. 1663, 173 P. 1083; State v. Vermont v. International Paper Co., 120 A. 900, 32 A.L.R. 632; 5 C.J. 820.
It never has been the policy to render invalid a foreign charter or articles of association simply because a copy thereof was not filed in Mississippi.
Hart v. Livermore, Foundry Machine Co., 72 Miss. 809; Springfield Gro. Co. v. Dewitt, 88 So. 497; Dodds v. Pyramid Securities Co., 147 So. 328.
Mrs. Carrie Bruton, as beneficiary under a certificate issued by the appellees, filed a declaration alleging that her husband, Washington I. Bruton, a former member of the brotherhood and holding the certificate sued on, departed this life on September 28, 1933, while said policy of insurance was in full force and effect; that the insured had performed all conditions and obligations on his part under said policy of insurance; that the appellee wrongfully declined to furnish her blank forms for proof of death of the insured; and that on account of said certificate the appellant is entitled to recover three thousand dollars. There was also a second count in the declaration which averred that the appellee is a so-called fraternal benefit insurance association, a quasi corporation, with its domicile and principal place of business located in Cleveland, Ohio; that it has an agent, E.L. Lancaster of Jackson, Miss., upon whom process could be served; that the appellee, through its agents and representatives, executed its beneficiary certificate No. 266543, made an exhibit to the declaration, and that the insured paid the appellee, in premiums and assessments, under said policy of insurance, in excess of nine hundred dollars; that the cash surrender value and cash reserve of said policy was in excess of the aggregate premiums and assessments against said policy from said date through September 28, 1933, when the insured died, and that the appellee had in its hands enough money of the insured to take care of the premiums.
To this declaration the appellee filed a plea of the general issue and two special pleas. Under special plea No. 1, the appellee pleaded that it is a fraternal benefit society operating on the lodge system, with ritualistic form of work and a representative form of government, and, as such beneficiary society, the certificate of insurance sued on and the by-laws and constitution in existence at the time the certificate was issued and as thereafter amended and changed constituted a contract; that the certificate states on its face that it is issued upon the express condition that the constitution of the brotherhood was a part thereof and might be altered and amended at any time, and that the contract provided that members should keep themselves in good standing in the brotherhood and pay all dues and assessments and perform all other duties of membership as required by the constitution; that said Washington I. Bruton was required to pay all dues and assessments to the financial secretary of the lodge at McComb, Miss., on or before the first day of each month, by virtue of article 12, section 56, page 217, of the constitution in force and effect at the time, which provided in part as follows: "On or before the first day of the month all members whose names appear on the rolls of the Lodges when assessments are due, except as provided in article 13, section 7, paragraph (a), shall pay to the financial secretary of the lodge the amount of all legally authorized assessments; provided that members shall be exempt from assessments for the month in which they are initiated." Under article 12, section 57, a member failing or declining to make payment of his dues and assessments shall stand expelled, and no action of the lodge shall be required to give effect to said expulsion, and same becomes effective on the second day of the month. It also provides that no member will be entitled to receive, from any source, notice of expulsion for nonpayment of assessments.
It was a custom of the brotherhood, on the payment of dues for one month, to mark in the upper left-hand corner of the receipt therefor the amount due for the succeeding month. Washington I. Bruton paid the July 1, 1932, assessment, and his receipt therefor showed payment for the sum so paid, and also the amount due on August 1, 1932. He failed to pay the assessment on August 1, 1932, or any subsequent month, and, under the provisions of the by-laws of the brotherhood, he stood expelled from said order on August 2, 1932.
From the testimony of some of the members of the local lodge it appears that, after the insured's failure to pay his said assessment, and after, by virtue of the by-laws, he stood expelled from the order, he was reminded of his failure to pay said assessment, and urged to reinstate himself under the rules and regulations of the brotherhood, which he failed and refused to do.
There is no sufficient showing that the cash surrender value or surplus was sufficient to continue to pay the premiums due by members. By failing to pay his assessment, the insured ceased to become a member, and ceased to be entitled to the benefits under the certificate.
It is urged as a defense against the operation of this provision of expulsion, ipso facto, that the dues for the various months are not the same, and that it was the duty of the brotherhood to give notice of the amount of dues correctly to the members prior to the time when the certificate would become forfeited, and that, in this case, there was no showing that such notice was actually given.
In appellee's original pleading it was set up that the amount due on August 1, 1932, was six dollars and fifteen cents, but this was amended after the proof was developed to show that the correct amount due for August, 1932, payment under the assessment was seven dollars and thirty-five cents, and the court permitted this amendment to be made.
So far as any proof shows, the insured did not tender any amount to the local secretary of the brotherhood whatever. As stated, the insured's receipt showed seven dollars and thirty-five cents to be the next payment due when he paid the July 1, 1932, assessment. It was the duty of the insured either to pay this amount or, if it was deemed incorrect, to tender what was a correct amount. There is no proof that he did either, but, on the contrary, the proof shows that he did not pay the assessment. Under this proof, the court granted a peremptory instruction for the brotherhood.
It is urged that the brotherhood is not entitled to rely upon the provisions in its certificate, constitution, and by-laws, because it has not constituted the insurance commissioner of the state, or any other person, as its agent upon whom process can be served, and therefore is not entitled to the benefits of law as a fraternal society operating under the lodge system, with ritualistic work and a representative form of government.
We do not think this contention is sound. Under the provisions of the certificate, constitution, and by-laws, the rights of the appellant are fixed, and the liability of the appellee is also fixed, and the appellee is brought into court by process served upon its local representative, and has appeared in court to answer the demand of the appellant. There is no basis of recovery on the part of the appellant, except as found in the certificate, constitution, and by-laws, or in some law of this state.
We think there was a failure on the part of the appellant to make out a case, and the judgment of the court will therefore be affirmed.
Affirmed.