Opinion
No. 27109.
May 14, 1928. Suggestion of Error Overruled October 1, 1928.
INSURANCE. Insurer's recorder, telling insured in default it would be satisfactory to pay assessment following week, did not waive other requirements for reinstatement.
Where local recorder of lodge which had issued policy of life insurance told insured, who had then been in default for more than ten days, that it would be satisfactory for insured to pay assessment on following week, he did not waive other requirements for reinstatement, especially where there was no general custom of defendant to acquiesce in such agreements by its local recorder, and, where insured died before paying assessment, and beneficiary tendered amount of assessments during following week, beneficiary could not recover on policy.
APPEAL from circuit court of Clarke county; HON. J.D. FATHEREE, Judge.
Terral Adams, for appellant.
It is a settled principle of law that failure of a member of a mutual benefit society to pay his dues or assessment promptly under the laws of the society will automatically remove his good standing and prevent recovery on his certificate in case of death, and this, notwithstanding the clerk or recorder of the local camp or council may have accepted overdue assessments of other members from time to time if the local clerk or recorder had no authority to waive the laws of the order.
Article 20, section 3, of the constitution of the Praetorians provides: "It shall be the duty of every member to see that his dues are paid in time to his worthy recorder. Members failing to pay dues in accordance herewith shall lapse immediately without notice and all rights, privileges and benefits shall cease at once." Section 2 of article 20 provides: "That all dues shall be payable for each month on or before the first day thereof and must be paid not later than the 20th day thereof." Section 3 of the same article also provides: "That notice of lapse may be thereafter sent out by the secretary but shall be in the nature of a remainder only and not a requisite before or after suspension takes effect."
Article 26, section 2, of the constitution of the Praetorians provides: "That any member whose dues shall not be paid as herein provided shall immediately lapse. To effect reinstatement within thirty days a member, while in good standing, may deposit with his recorder his unpaid dues and when the supreme senate has received and accepted such dues the reinstatement shall be effective, but not otherwise." The application of insured on page 129, which is made a part of the contract of insurance provides for the punctual payment of all dues and the insured declares that he will conform to and obey the Constitution, rules, laws and usages of this order.
The contention of appellee is that the notice of lapse dated May 28, 1926, estopped the Praetorians from setting up as a defense the nonpayment of dues prior to the month of May, 1926. It is our contention that it does not. This, however, is not decisive of the case. If the insured at the time of his death on June 12, 1926, had not paid his dues for May, 1926, on or before the 20th day of May, as provided by the constitution of the Praetorians, then his beneficiary has no right of recovery against the Praetorians unless the provisions of the constitution has been waived. The testimony of Recorder Norris is to the effect that the insured had a conversation with him on Sunday before the death of the insured in which the insured made his proposition to pay his dues for May, 1926, the next week and that he told him all right.
There is no testimony anywhere that Norris had any special authority to waive constitutional provisions of the order and extend the time of the payment of the dues of this member who had lapsed his membership in the order and had been so notified that his membership was lapsed by the notice if lapse dated May 28, 1926, already referred to, and there is no proof anywhere in the record that Norris or the insured or anyone else gave the Praetorians notice that he had had any such agreement with the insured. The insured therefore had direct, positive notice from the head office of the Praetorians that his membership had lapsed and what were the requirements for reinstatement, which requirements no one ever attempted to comply with until after the death of insured. A member of a fraternal benefit order is presumed to know the provisions of the constitution and by-laws of the order and those provisions are a part of his contract with the order. J.O.U.A.M. v. Thompson, 45 L.R.A. (N.S.) 1148; Odd Fellow Benefit Association v. Smith, 101 Miss. 340. See Co-operative Life Association v. McKonico, 53 Miss. 233; Odd Fellows Benefit Association v. Smith, 101 Miss. 332; Sovereign Camp W.O.W. v. Hynde, 134 Miss. 705; W.O.W. v. Newsom, 14 A.L.R. 903.
The certificate of insurance, the application and the constitution and by-laws of the order constitute an express contract which is clear and not ambiguous and requires no extrinsic testimony to explain its terms. It is well established that a custom or usage which is repugnant to the terms of an express contract is not permitted to operate against it and evidence of it is inadmissible, for while usage may be admissible to explain what is doubtful, it is never admissible to contradict what is plain. 12 Cyc. 1091-1093. The Praetorians is a fraternal benefit society as defined by section 5173 of Hemingway's Code 1917, and it had and has a permit to do business in the state of Mississippi under section 5188, Hemingway's Code 1917. Section 5192, of Hemingway's Code, 1917, reads as follows: "Waiver of the provisions of the laws. — 20. The constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws and constitution of the society, and the same shall be binding on the society and each and every member thereof and on all beneficiary members." Laws 1916, ch. 206, in effect April 4, 1916.
A waiver must be manifested in some inequivocal manner and there must be an intention to waive in order to establish an effective waiver. Equitable Life Ins. Society v. McElroy, 83 Fed. 631, 123 Cal. 360; First National Bank v. Mackrell, 69 Am. St. Rep. 64. There can be no recovery on a certificate where a member died during suspension for nonpayment of dues. Grayson v. Grand Temple, 171 S.W. 489.
Insurance statutes and decisions covering commercial (old line) insurance are not applicable to fraternal as they are controlled by different statutes. Laws 1916, ch. 206; Sovereign Camp v. Carrington, 90 S.W. 921; Sovereign Camp v. Downer, 241 S.W. 228; Sovereign Camp v. Nigh, 223 S.W. 291; Thetford v. Modern Woodmen of America, 273 S.W. 666. The home office of the Praetorians, being in the state of Texas the statutes and decisions of Texas should control the construction and interpretation of the policy and constitution and by-laws of the order. Under the Revised Statutes of Texas, 1925, article 4846, is provided: "That a fraternal insurance society has authority to limit the power of its agent and officer to waive any condition of the insurance certificate, constitution or by-laws of the society." Royal Arcanum v. Green, 237 U.S. 541; Woodman v. Todd, 283 S.W. 659; Modern Woodman v. Mixon, 41 A.L.R. 1384; Johnson v. Mutual Life, 63 L.R.A. 833; Mutual Life v. Hilton Green, 241 U.S. 613.
There is another reason why the alleged agreement between the local recorder, Norris, and the insured for the extension of the time for the payment of his May and June, 1926, dues is invalid and void. This alleged agreement was entered into on Sunday before the insured was buried the next Sunday. This is the testimony of the witness Norris introduced by appellee, plaintiff below, given on direct examination and we submit can be taken advantage of although our court has held that the illegality of a contract made on Sunday is an affirmative defense, yet having been brought out by the plaintiff herself needs no notice under the general issue or the special plea to enable the defendant to take advantage of it. It is well settled that any contract entered into on the first day of the week, commonly called Sunday, is void and both parties being in pari delicto it is binding on neither party. Black v. McMurray, 56 Miss. 217; Strouse v. Lanctot, 27 So. 606.
Morse Bryan, for appellees.
From the original brief of appellant it will be seen that the defense of this case rests primarily upon certain provisions of the constitution and by-laws of the order requiring the payment of dues by members on or before the 20th day of the month in which they are payable.
In Fraternal Aid Union v. Whitehead, 125 Miss. 153, 87 So. 453, similar provisions were there examined. In that case, the organization relied upon provisions of the constitution and by-laws of the appellant relative to the denial of the right of any local or subordinate lodge or any officers or member thereof, or any organizer, deputy or agent, to waive any of the provisions thereof. As a matter of fact, article 37 of the appellant order here is much more drastic and is much broader than the provision of the Constitution of the Fraternal Aid Union.
In the Whitehead case it was also held that the manager of the Fraternal Society being vested with control over the particular matters passed upon by him, was the agent of the organization and acted for it. The court further stated that as its agent, knowledge coming to him "must be the knowledge of the appellant."
Subsequent to the decision in the Whitehead case a motion was filed by the Fraternal Aid Union to transfer its suggestion of error to the court en banc on the ground that the effect of the previous decision was to destroy the section of Hemingway's Code above referred to as unconstitutional. This court in 125 Miss. 661, 88 So. 274, in passing upon the motion expressly stated that the above statute was not held void but that: "The trouble is that section 106 of the constitution and by-laws of the appellant does not conform to what is authorized by section 20 of chapter 206, Laws 1916. The section of the constitution of appellant is much broader than what is authorized by the statute of the state above quoted."
There was no legislative intent manifested in the Act of 1916 to destroy the general law relative to waiver and estoppel. Those equitable principles requiring fair dealing are independent of statute and of contract. Fraternal organizations more especially should be held to these principles. They should not be permitted to claim any greater immunity than is allowed individuals. They can, of course, operate through no other sources than those of its constituted officers. See 5 Cooley, Briefs on the Law of Insurance, 4384; Praetorians v. Childs (Ala.), 108 So. 23; Sovereign Camp W.O.W. v. Hynde, 134 Miss. 705, 99 So. 259.
In the case at bar, that the superior officers of the Praetorians knew of the fact that dues of local members were accepted by the recorder after the 20th days of months in which they became due is apparent from the record as it appears from the testimony of Norris, the recorder. As a matter of fact, he so stated in response to a question by the court. This, we respectfully submit, brings the case under the rule expressed in the Hynde case, supra, and was properly submitted to the jury for its consideration.
One other contention of counsel for appellant in their brief is that the statement made by the recorder to the insured took place on Sunday and, therefore, would be given no effect by the court. This is manifestly absurd on its face. Parties can, by their conduct and statements made on Sundays, estop themselves as effectively as if made on a secular day. The contract sued on was not a Sunday contract. See Sovereign Camp W.O.W. v. Mrs. Nola Newsom, 142 Ark. 132, 219 S.W. 759; 14 A.L.R. 903.
The Newsom case came on for rehearing before the court and its attention was called for the first time to the Arkansas statute which is similar to our own. In passing on the motion for rehearing the court took occasion to distinguish between waiver and estoppel, holding that while the statute might be a limitation upon the authority of a subordinate body or subordinate officers or members to waive any of the provisions of the law and constitution of the society, yet its language could not be extended to cover cases of estoppel where the organization, by a settled course of conduct on the part of its agent, acting within the scope of his authority, has done some act that would preclude it from repudiating the effect thereof. Halliday v. Equitable Assurance Society (N.D.), 209 N.W. 965, 47 L.R.A. 446; Kennedy v. Supreme Tent Knights of Maccabees (Wash.), 170 Pa. 371; Trotter v. Grand Lodge of Iowa Legion of Honor, 132 Ia. 513, 109 N.W. 1099, 7 L.R.A. (N.S.) 569.
We rest content, however, upon the doctrines of our own supreme court as enunciated in the Whitehead and Hynde cases, and we submit that they are squarely in point and applicable to the facts of this case.
Watkins, Watkins Eager, reply brief for appellants.
We wish to first reply to that portion of the brief wherein it is stated that the testimony of Mr. Norris, the local recorder, showed that the provisions of the by-laws and constitution of the appellant order as to a forfeiture on account of nonpayment of dues, resulting in, a suspension of the member, had been waived in this particular case. It strikes us that the testimony of Mr. Norris, instead of showing a custom to accept and remit dues out of time, on the other hand conclusively shows that no such custom existed and, furthermore, that the language and conduct of Mr. Norris in this particular case can in no sense be said to constitute a waiver or cause an estoppel. There is a vast distinction between one who has the power to commit a waiver or estop its principal from merely listening to an interested party make a voluntary statement and such a one entering into a positive agreement with a party whereby definite arrangements are made in respect to the subject-matter.
Counsel asked the recorder if he then replied to the deceased "that it would be all right," but we find that the recorder answered him, not that he told him that such action on the part of deceased would be all right, but he merely replied "all right."
We submit that the statement of the deceased was a mere voluntary statement with respect to some contemplated future action on his part. The conversation was not to the effect that he stood reinstated upon making the statement, nor was the conversation even to the effect that he would be reinstated if the statement was carried out as made by deceased, but, we submit that the most liberal construction in any event that can be placed upon this conversation is that if and when the dues of the deceased were paid then he would be reinstated. We cannot conceive how it can be said from this record under any circumstances that the deceased could become reinstated and be in good standing until the dues were actually paid. Assuming, for the sake of argument alone, that if the deceased had lived through the next week and had paid his dues for the two months for which he was in arrears it could be said that upon the payment of these dues and their acceptance by the recorder he was reinstated in good standing, we do not even believe this to be the law because he can only be reinstated as provided by the terms of his contract, which includes not only the beneficiary's certificate but the constitution and by-laws as well.
We are going to point out the difference between the Whitehead case, 125 Miss. 153, 87 So. 453, and the Hynde case, 134 Miss. 705, 99 So. 259, which seem to be the only cases upon which appellee relies with any degree of confidence. Neither case is applicable to the facts and the law in the case at bar as we can see it.
The Whitehead case, supra, insofar as it affects the point referred to by appellee's counsel, merely holds that an attempt by a beneficiary association to provide that none of its officers or members or representatives or deputies or agents, except, the supreme president "by dispensation," shall have the power to waive any of the provisions of the constitution is void for the reason that it amounts to a declaration that the organization cannot commit a waiver or become estopped because it can only act through its officers or agents. We have no complaint to make with this decision of the court and, as pointed out by Mr. Justice ETHRIDGE in the opinion, it announces no new principle of law in this case because this court had already arrived at the same conclusion in the case of London Guarantee, etc., v. Railroad Co., 97 Miss. 165, 52 So. 787, referred to in the opinion. Furthermore, the opinion makes it perfectly evident that a provision such as appears in the constitution and by-laws of the appellant order is perfectly reasonable and valid.
In respect to the Hynde case, 134 Miss. 705, 99 So. 259, we are perfectly willing to stand upon this case and we cite it as a decision upholding the contention of the appellant order in the case at bar. We earnestly request the court to refer to the entire opinion in the Hynde case.
In K. of P. v. Jones, 100 Miss. 484, 56 So. 458, this court held that a member of a beneficiary organization had never been legally suspended as provided by the by-laws although he was in arrears in the payment of his dues and that consequently he was entitled to reinstatement at any time because he had never been legally suspended whether he was in good or bad health upon paying his delinquent dues.
Even admitting for the sake of argument that the member here could have become reinstated and in good standing by merely paying his dues, yet he cannot become reinstated and in good standing upon a mere statement that at some future date he will pay his past-due installments.
It is elementary that the member is charged with knowledge of the constitution and by-laws where they form a part of his contract. Odd Fellows Benevolent Association v. Smith, 101 Miss. 322, 58 So. 100.
Mere silence in the face of the unambiguous requirements of the constitution and by-laws is not sufficient to constitute a waiver nor estop the company from asserting the defense of forfeiture. Provident Life Acc. Ins. Co. v. Hollums (Ala.), 104 So. 522. See 32 C.J. 1348.
In the case of Praetorians v. Childs, 214 Ala. 403, 108 So. 23, referred to on page 16 of appellee's brief, a different question was presented because there was involved the question as to certain circumstances tending to show that the state manager was empowered to act for the company. Here, Mr. Hester, so the local recorder, Mr. Norris, testified, gave him (Mr. Norris) positive instructions to collect dues between the 10th and 20th of the month and at no time to collect them after the 20th. We do not think the facts in the two cases are at all similar. See Sovereign Camp W.O.W. v. Prince, 141 Miss. 392, 106 So. 521.
The appellant is a fraternal order conducted on the lodge system, and issues policies of insurance on the lives of its members. Willie Griffin was a member of the appellant's Meridian Lodge, and received from the appellant a policy of insurance on his life. Griffin died, and, the appellant having declined to pay the amount of his policy to his wife, the beneficiary therein, she sued the appellant therefor, and, from a judgment in her favor, the appellant has brought the case to this court.
The appellant's contention is that the court below should have directed a verdict in its favor, for the reason that the policy was not in force at the time of Griffin's death, because of his failure to pay several of the monthly assessments due thereon.
The evidence, in substance, is that Griffin failed to pay his assessments for March, April, and May, 1926. On May 28, 1926, the appellant's general president and secretary advised Griffin by letter that he had failed to pay his dues for May, and could be reinstated by the payment of his dues for May and June. Immediately after Griffin's death, which occurred on June 12, 1926, the appellee tendered to the appellant, and it declined to accept, the amount of Griffin's assessments for May and June. The recorder of the local lodge testified that his instructions were to collect assessments for each month between the 10th and 20th days thereof, but that he sometimes collected assessments after the 20th of the month without objection from the home office. His official receipt book was introduced in evidence, the stubs of which showed five instances in which he had collected assessments after the 20th of the month. These collections ranged from the 21st to the 28th of the month in which they should have been made.
Griffin was accidentally killed on Friday. On the Sunday before he met the local recorder at church, and told him that he intended to pay his assessments "next week," to which the recorder replied, "All right."
Section 20 of the constitution of the order to which its policies are subject, provides that:
"All dues shall be payable for each month on or before the first day thereof, and must be paid not later than the 20th. . . . Members failing to pay dues on time in accordance herewith shall lapse immediately without notice, and all rights, privileges, and benefits shall cease at once, except as to any paid-up and extended values to which they may be entitled as hereinafter provided."
Section 2, article 26, provides that:
"Any member whose dues shall not be paid as herein provided shall immediately lapse."
The article then provides how lapsed members may be reinstated, and section 7 provides that:
"The order shall not be liable, in any manner, upon the certificate of a member when lapsed or suspended."
Section 1, article 27, forbids the altering of its contracts with its members in any way by certain of its officers, including the officers of its local lodges.
The appellee's contentions are: (1) That the appellant is estopped from claiming that Griffin was in arrears other than for the month of May, because of its letter of May 28th to him advising him that he had failed to pay his May dues, and could be reinstated by the payment of his dues for May and June; (2) that the recorder of the local lodge agreed that Griffin might pay his dues "next week," and that Griffin died before the week ended and therefore was not in default; (3) that the local recorder was accustomed to accept dues without objection from the appellant after the 20th day of the month, and therefore Griffin had a reasonable time after the 20th of May in which to pay his dues for that month, which reasonable time had not elapsed when he died; and (4) that Griffin's dues for May and June were tendered to the appellant immediately after Griffin's death, and before the expiration of the time in which he had to pay the same by reason of his agreement with the local recorder, and the recorder's custom of collecting dues after the 20th of the month.
We will leave out of view the provision of the appellants' constitution prohibiting the officers of its local lodges from dealing with members of the appellant's order other than as provided in its constitution and by-laws, and also the failure of Griffin to pay his assessments for March and April.
When Griffin told the local recorder that he would pay his dues "next week," he was then in default, and had been for more than ten days, on his May dues, so that his delinquency was not caused by any act of the recorder; and the statement of the recorder to him that to pay his dues "next week" would be "all right" cannot be held to have been intended by him, or to have been understood by Griffin, to be a waiver of the appellant's other requirements for reinstatement. Moreover, the local recorder was not authorized to make such an agreement by the appellant's constitution or by-laws, or by the policy issued by it to Griffin, and no general custom of the appellant to acquiesce in such agreements by its local recorder, on which Griffin had the right to, and did rely, was proven.
It is true that, "where the insurer, by custom and course of dealing with the insured in receiving, without objection, premiums or assessments past due, has led him to believe that he is entitled to a reasonable time for the payment of premiums or assessments after they mature, the insurer cannot claim a forfeiture for failure to pay premiums or assessments on the day they become due; and this is true whether the tender of past due premiums is made before or after the death of the insured." 5 Cooley's Briefs on Insurance (2 Ed.), p. 4383. The ground on which this rule rests is that the insured has been misled by such custom, or specific dealings with him, into delaying payment of his premiums or assessments to a day later than that fixed therefor. 5 Cooley's Briefs on Insurance (2 Ed.), p. 4389. This rule cannot be here invoked, for the reason that the appellee failed to prove either such a custom on the part of the appellant or specific dealings of such character by it with Griffin, on which Griffin relied in delaying the payment of his May assessment.
The appellant's request for a directed verdict should have been granted.
Reversed, and judgment here for the appellant.
Reversed.