Fraternal Union of America v. Zeigler , 145 Ala. 287 ( 1905 )

DOWDELL, J.

The important and material question in this case is raised by the defendant’s demurrers to the plaintiff’s replications to the defendant’s special pleas. The determination of this question invokes the construction of the contract sued on, which is a benefit certificate of life insurance issued by the defendant association to one Washington C. Zeigler, and in which certificate the plaintiff was named as the beneficiary to whom the insurance should be paid on the death of tne insured. The benefit certificate in this case provided, among other things which entered into and formed a part of the contract for insurance, that the insured should be subject, not only to the.existing laws of the association, but also such as might be thereafter ador»ted. That it was competent for the parties to enter into such a contract cannot, as a proposition of law, be questioned; and any rule or law adopted by the association, subsequent to the contract, and which is within its chartered powers and does not violate the law of the state as to impairing the obligation of contracts, will be as binding between the parties as if such law had been in existence at the time of the making of the contract.- Supreme Commandery v. Ainsworth, 71 Ala. 436, 46 Am. Rep. 332. See, also, authorities cited in brief of counsel for appellant.

The benefit certificate issued by the defendant association and the foundation of this suit contained a provision that the policy should be forfeited if the insured came to death by his own hands. This, of course, is to be interpreted as meaning death by suicide. At the time of the issuance of'said benefit certificate the constitution of the defendant association contained a provision that all certificates issued by the Supreme Lodge shall be incontestable after two years from their respective dates, with certain exceptions; suicide not being one of them. Subsequent to and more than two years after the date of the issuance of the ixmefit certificate in this case, the association adopted a by-law whereby it was provided that, in case of death by suicide by any member of the association, only one-thircl of the amount of the insurance on the life of such member would be paid by the association. The theory of the plaintiff is that such subsequent law, so adopted by the association, had no binding force or effect on the insured in this case, for the reason that to give it force would be to take away a vested right; and it is argued that such vested right resulted from the incontestable clause existing in the constitution at the date of the issuance of the benefit certificate.

The logical and reasonable deduction from this argument would lead to the conclusion that the insured had the right, after the lapse of two years from the date of the issuance of the certificate, to elect the mode and manner of his death, and, by suicide, to terminate the life expectancy, which was .in the contemplation of the parties and entered into and formed the basis of the contract of insurance. Moreover, the argument, when analyzed and carried to its legitimate conclusions, would leave no field of operation for the provision in the contract relative to the adoption by the association of subsequent rules and laws for the government of its members. It cannot be doubted that the law, which was here adopted by the association and set up by the defendant in its pleas, was not only a reasonable one, but also beneficial to all its members, including the insured in this case. Conceding, for the sake of argument, that the incontestable clause contained in the constitution was applicable to cases of suicide, still the provision contained in the benefit certificate in reference to the adoption of subsequent laws by the association is more specific, and, if a conflict between the two exists, the latter should prevail, and for the reason, if no better could be given, by such construction a field of operation would be given to both provisions.

We are of the opinion that the adoption of the subsequent law by the defendant association did not impair the obligation of the contract as entered into by the parties at the time it was made; and, from what Ave have said above, our conclusion is that the court erred in overruling the defendant’s demurrers to the plaintiff’s replications.

Reversed and remanded.

Harm,son and Anderson, JJ., concur. Tyson and Denson, JJ., concur in the conclusion reached, Avithout being committed to all that is said in the opinion.