Royal Highlanders v. Scovill

92 N.W. 206, 66 Neb. 213, 1902 Neb. LEXIS 415

• Court: Nebraska Supreme Court
• Decided: November 6, 1902
• Docket: No. 12,082
• Status: Published

Opinion

Day, 0.

Daniel A. and Elizabeth P. Scoyill brought this action in the district court for Hamilton county against the Royal-Highlanders to recover upon a benefit certificate issued by the defendant to Olive M. Scovill,' in which the plaintiffs were named as beneficiaries. The trial court instructed the jury to return a verdict in favor of the plaintiffs, upon whiclx judgment was rendered, to review which, the defendant has brought en;or to this court.

The defendant is a mutual fraternal association organized under the laws of this state, with its principal place of business or head office in the city of Aurora, Nebraska. Like most of the mutual fraternal insurance associations, the defendant organization is founded upon the' lodge system; having a supreme or executive castle, with subordinate lodges, located at different places throughout the country. In addition to the fraternal, benevolent and social features which the association inculcates, it. also undertakes, under certain conditions, to provide indemnity in case of disability or death of its members. One of the subordinate or tributary castles is located at Aurora, which is known as Helen Castle, No. 68, of the Royal Highlanders. Olive M. Scovill, previous to her marriage to George H. Decker, became a member of this tributary castle, and on January 26, 1899, there was issued to her by the defendant a benefit certificate whereby the defendant agreed in case of her death to pay a certain sum to the ■beneficiaries named in the certificate. The certificate provided that in case of death occurring after one or before two years from the date of the certificate, the sum of $500 should be paid to the beneficiaries. . The certificate also contained a condition as follows: “The payment of all or any part of this certificate is conditioned under the provisions that the owner thereof shall have in every particular complied with the edicts,' rules and regulations governing the membership of this fraternity now in force, or that may hereafter become a part of the same. * *' * Both the edicts and the application are made a part of this certificate.” The rules and edicts of the supreme castle, among other things, provided for the payment by its members of certain assessments or fixed quarterly dues, which sums were to be paid by the member to the secretary of the tributary castle of which he was a member within a given period, find provided that “any member failing to pay the same within the time in which it is due shall stand suspended from all the benefits of the fraternity.” The insured did not pay the assessment levied against her for the month of May, and which under the rules of the association became due and payable on or before June 1, and for such failure she was duly suspended, and on June 18 notice of her suspension was given, which notice was received by her upon the following day. After becoming a member of Helen Castle, No. 68, the insured removed to Omaha and was residing there at the time of her death. On June 18 or 19, she was taken ill with premature child-birth, necessitating a severe operation on the 19th. On the 20th, the attending physician detected septic symptoms, which continued to grow worse and at 6:30 o’clock p. in., on June 21, the insured died. At 3 o’clock on the afternoon of her death the attending physician called up by telephone D. A. Scovill, one of the beneficiaries, and informed him of the serious illness of his daughter, and suggested that if she had any insurance he ought to look after the payment of her premium. On the afternoon of June 21, Mr. Scovill called at the head office of the Royal Highlanders and inquired the amount necessary to be paid to reinstate the insured, and was informed that all matters of payment of assessments and dues should be made through the secretary of the tributary castle, and directed him to call upon Mrs. Glover, the secretary of Helen Castle, No. 68. Mrs. Glover resided some distance from the business portion of the city, and as a matter of convenience for the members of the castle, she left her books and receipts at her husband’s store, where.assessments could be paid. Although not specially authorized to do so by the action of the lodge, Mr. Glover, in the absence of his wife, received payments made by any of the members, and issued receipts to them therefor in the name of his wife, as secretary of the castle. Mr. Scovill called at the store, and not finding Mrs. Glover, asked Mr. Glover the amount necessary to be paid to reinstate his daughter. Mr. Glover examined the books and informed Mr. Scovill that the assessments and quarterly dues amounted to $1.30, which Mr. Scovill then paid; and thereupon Mr. Glover, in the name of his wife, as secretary of the castle, issued a receipt to Olive M. Scovill, showing payment of assessments for May and June, and the quarterly dues payable June 3, and delivered a receipt to Mr.' Scovill. There is a conflict in the testimony as to whether Mr. Scovill made the payment before or after he received the telephone message from the physician. At all events he did not indicate to Mr. Glover any knowledge or information he may have had respecting the condition of his daughter’s health, and no inquiry was made by Mr. Glover as to the health of the insured.

In the view we have taken of the case, the question as to Mr. Scovill’s knowledge of the condition of his daughter’s health seems entirely immaterial. In making the payment he acted as the agent of the insured, and his knowledge of her condition does not seem to us to have any special bearing upon her right to be reinstated. Her right to become reinstated depends upon the edicts and regulations of the supreme castle. One of the edicts provides that “any member suspended for non-payment of monthly payments or dues maybe reinstated, if in good health and not engaged in any of the prohibited occupations, by the payment of all arrearages of every kind within 60 days of suspension.” It would seem, therefore, that the right of the insured to become reinstated depended upon two conditions: First, she must have been in good health at the time; and second, the payment of all arrearages within the time limited. By the plain and clear meaning of the edict, the good health of the member at the time of the payment must exist, as a condition precedent to the right of reinstatement. When the insured tendered the amount of the assessments due, she impliedly, at least, represented that the conditions existed upon which she had the right to he reinstated, viz., that she was in good health. The evidence is clear and undisputed that at the time of the payment of the assessments the insured was hopelessly ill and dying, and lived hut a few hours thereafter.

It is insisted, however, hy the plaintiffs, that the acceptance of the assessments by Mr. Glover was a waiver of the condition of good health. We can not agree with this contention. The members of a mutual benefit association are conclusively presumed to know its rules and regulations, and the assured, therefore, must have known that her good health was a condition precedent to her right to reinstatement. She was not acting, therefore, in good faith to the lodge, in tendering the payment of her dues, in view of the condition of her health. This fact alone, in our opinion, would be sufficient to defeat her right of recovery. We do not doubt the general rule that the provisions in a policy of insurance which are made for the benefit of the company can be waived by the company, but such conditions can be waived only by officers of the company having authority to do so. Granting that Mr. Glover had the rights of the secretary of the lodge, it nowhere appears that he had authority to waive any of the provisions of a contract entered into between a member and the supreme lodge. In the case of Field v. National Council,

* the rule is announced which we think the correct one to apply to mutual fraternal insurance companies, where the whole scheme is founded upon mutuality and good faith of its members. In that case Borgraefe v. Supreme Lodge, 22 Mo. App., 127, is cited with approval, in which it is said: “The subordinate lodges are no doubt the agents of the supreme lodge in dealings with the members for many purposes, and in those cases where the subordinate lodges act through, their ministerial officers, and where the latter act in conformity with the rules governing the lodges and the order, these officers may become pro hac vice the agents of the subordinate lodges. But it is not shown to us that these officers are anywhere endowed with the power to set aside the rules of the order, or that the subordinate lodges are endowed with such a faculty. On the other hand, it is perceived by the provisions of the laws of the order above quoted, that no grand lodge has power even to alter or amend the laws governing the subordinate lodges. The doctrine of waiver, whicli is often appealed to to prevent forfeitures in the case of policies of insurance, has no application to the forfeitures of memberships in these orders. The laws and rules governing the different branches of such an order, are in the nature of contracts among all the members, and, considering the wide-spread extent of these organizations, and the very great extent to which these schemes of benevolence have taken the place of life insurance, especially among the working classes, it is highly important as a principle of public policy that, in cases of this kind, their rules and regulations should be substantially upheld by the judicial .courts.” State v. Temperance Benevolent Ass’n, 42 Mo. App., 485; Karcher v. Supreme Lodge, 137 Mass., 368; Hall v. Supreme Lodge, 24 Fed. Rep., 450; Rood v. Railway Passenger & Freight Conductors’ Ass’n, 31 Fed. Rep., 62.

We think, under the facts proved, the court should have directed a verdict for the defendant. We therefore recommend that the judgment of the district court be reversed, and the cause remanded for further proceedings according to law.

Hastings and Kirkpatrick, 00., concur.

By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is reversed and the cause remanded for further proceedings according to law.

REVERSED AND REMANDED.

64 Nebr., 226.