Sovereign Camp, W. O. W. v. Garner , 127 Miss. 900 ( 1921 )

Cook, J.,

delivered the opinion of the court.

Appellee instituted this suit against the Sovereign Camp of the Woodmen of the World to recover on a certificate of fraternal insurance issued for her benefit on the life of her son, William A. Garner, now deceased, and from a judgment for appellee this appeal was prosecuted.

To the declaration filed in this cause, appellant filed its plea of the general issue, and also filed a special plea averring that the beneficiary certificate had been forfeited and became null and void long prior to the death of the insured by reason of the fact that he had changed his occupation from an unhazardous to a hazardous employment in violation of section 43 of the constitution and by-laws of the society. Issue was joined on this plea, and there was a judgment for appellee, from which an appeal was prosecuted to this court, and this judgment was reversed. The issues as made at tbe time of the first trial will be found fully set forth in the opinion on the former appeal, which is reported in 125 Miss. 8, 87 So. 458. Upon the remand of the cause appellee filed an additional replication and notice of special matter in defense and avoidance of the matter pleaded by appellant, Avhich in substance averred that full and complete proofs of death and loss, showing the change of occupation of the insured and the length of time he was engaged in a prohibited occupation, had been received by the defendant society on or about the 1st day of February, 1919; that suit on the contract of insurance was filed on the 4th day of June, 1919; that the Sovereign Clerk of the Sovereign Camp had full notice of the occupa-. .tion of the deceased from and after the 1st of February, 1919; that the defendant society was chargeable with knowledge of all these facts when it filed its special plea setting up the violation of section 43 of its constitution and by-laws; that as many as eight or more monthly payments of dues and assessments were paid to the defendant society through the clerk of the local' camp after the insured’s change of occupation; that after the receipt of proofs of death and loss, with full knowledge of the change of occupation of deceased, the defendant society denied liability and refused to pay to the beneficiary the amount of the contract and policy sued on; that it failed and refused to return to the beneficiary or the personal representative of deceased, the premiums, dues, and assessments levied on account of said policy; that in filing its several pleas it made no offer to return these dues and assessments, but has retained the premiums, dues, and assessments which were paid to it after the date of the alleged forfeiture for the purpose of keeping in force the insurance contract sued on; that the deceased gave the clerk of his local camp notice of his change of occupation before said change was made and within thirty days after the change of his occupation; that the clerk of defendant’s local camp, and the party in charge of defendant’s business and affairs at the local camp of which deceased was a member, had full notice from the time deceased changed his occupation; that by reason of the acts and knowledge of the clerk of the local camp, who forwarded the premiums and dues to the defendant, who acted for the defendant society in collecting and transmitting dues, giving receipts therefor, the condition of section 43 of the constitution and by-laws was ivaived by the defendant; that by reason of the fact that the defendant society has failed and refused to return any of the premiums paid as aforesaid, hut, on the contrary, has retained the same for its own use long after the death of the insured, and after knowledge of all the facts in reference to the change of occupation, without any offer whatsoever of returning the same, the provisions of the constitution and by-laws Avith reference to a change of occupation Avere waived, and the defendant is now estopped to deny liability on the contract of insurance.

At the conclusion of the testimony the jury was peremptorily instructed to find for the plaintiff for the amount of the policy sued on, and from the judgment entered in pursuance thereof, defendant appealed.

The deposition' of John T. Yates, Sovereign Clerk and ex officio secretary of the defendant society, was offered offered in evidence, and he testified that it Avas part of his duties to receive notices of change of risk, change of occupation, or other similar notices from the members of the various local camps, that prior to the death of the insured he did not receive any notice of the insured having changed his occupation to one that was classed as hazardous, and that no officer of the society had such knowledge or information prior to the death of the insured. He further testified that the proofs of death of the insured showed that he Avas engaged in a hazardous occupation at the time of his death, and that his first information of such change of occupation was received when these proofs of death were received by him, as Sovereign Clerk, some time during the latter part of January, 1919, or the first part of February, 1919, and to his deposition he attached as a part thereof the proofs of death received by him. These proofs show that deceased was employed as an assistant engineer in a power house or electric generating plant at the date of his death, and that he had been so employed for a period of six months prior to his death.

The testimony shows without conflict that, with the full knowledge and consent of the members of the local camp, the son of the clerk of the local camp performed all the duties of clerk, that he had full knowledge of insured’s change of employment, and that insured was guilty of no fraudulent concealment of his change of employment.

The suit on this policy was filed on the 4th day of June, 1919, while defendant’s pleas were filed on the 2d day of July, 1919. These pleas averred that the insured entered a hazardous employment in June, 1918, and that by reason thereof his beneficiary certificate became void within thirty days thereafter, but no offer was made to return the regular dues and assessments collected during the six-months period intervening between the date of the alleged forfeiture and the death of the insured. It is conclusively shown that the premiums collected. during this period were never repaid or tendered, and it is admitted that from about the 1st day of February, 1919, the officers of the society had full knowledge of all the facts. Can the defendant society then claim that the policy was void, and avoid the charge of having waived the forfeiture, and at the same time retain the monthly premiums paid to it since the date of the alleged forfeiture for the purpose of maintaining the policy in force?

In Thompson v. Modern Brotherhood of America, 189 Mo. App. 15, 176 S. W. 506, it is said:

“Again, waiver, or estoppel to deny waiver, may arise in other ways than through knowledge on the part of the society prior to the maturing of the policy by the death of the insured. To entitle the society to claim a forfeiture and to avoid the charge of having waived the same, it must place itself in a position to insist upon such forfeiture by paying back all the premiums received by it after the forfeiture arose. It cannot retain premiums paid and received on the theory that the insurance was in force, and at the samé time claim that it was not in force.”

In Gray v. National Ben. Ass’n, 111 Ind. 531, 11 N. E. 477, the society defended upon the ground that its rules and by-laws forbade the issuance of a certificate of insurance to any person under the age of eighteen years, and that decedent had falsely misrepresented his age in his application, and warranted that he was over the age of eighteen years, and that this false representation was not discovered until proofs of death were furnished. In passing upon the question the court there said:

“If it ivere true, as stated in its answer, that appellee never knew that [deceased] was under of the age of eighteen years until appellant furnished it Avith proofs of his death, yet, as the record shoAVs that such proofs of death Avere so furnished more than eighteen months before this suit Avas finally determined in the court below, and as it does not appear that appellee had ever offered to rescind or cancel the certificate or contract sued on, or to refund the money it had received thereon, it must be held, we think, that such certificate or contract had been so ratified and confirmed by appellee as to estop it from asserting the defense to this suit attempted to be stated in . . . its ansAver.”

In Schreiber v. German-American Hail Ins. Co., 43 Minn. 368, 45 N. W. 709, the court said:

“As it does not appear that this defendant had notice of the breach alleged Avhen it enforced payment of the premium notes, that did not constitute a waiver. But the action to enforce the notes could proceed only on the theory that the policy Avas valid. It was a solemn assertion of its validity. And, having by that means compelled the insured to perforin the contract on his part, it certainly seems unjust that it should retain what it thus compelled the insured to pay, and be permitted to escape the obligations of the contract on its part. After it learned that it might elect to avoid the policy, honesty required that, before so electing, it should restore the money, payment of which was thus exacted. The retention of that money was —in morals, certainly — inconsistent with an intention to avoid the policy.”

In Joyce on Insurance, vol. 2, par. 1404, the author says :

“If the policy is avoided by a misrepresentation of the assured made without fraud, the premium is returnable, especially wliere the company have positive knowledge of that Avhich it insists effected the forfeiture, for in such case it would be inequitable for the company to retain the premiums, and at the same time claim that it is not bound thereby.”

The great weight of authority now seems to recognize the rule that, wherever the contract is void for actual fraud on the- part of the assured, there need be no return of premiums paid; but the evidence in this record completely negatives any charge of misrepresentation or fraudulent concealment of facts. It is admitted that about the 1st of February, 1919, the defendant society acquired full knowledge of all the facts upon which it bases the assertion of forfeiture. This suit was not filed until several months thereafter, and the defendant, while asserting that the policy became void in June, 1918, failed to return or offer to return the consideration paid by the assured to keep the policy in force. If the insurance was not in force after June, 1918, the decedent owed no premiums after that date, and the defendant cannot retain the premiums paid after that date, and thus avail itself of the benefits of the contract and at the same time escape the liability imposed thereby. For several months prior to the filing of defendant’s pleas, and for more than two years prior to the final trial of this cause in the court below, the defendant had full knowledge of all the facts in reference to the insured’s change of employment, and since it has never refunded or offered to refund the premiums collected after the date of the alleged forfeiture, we think the provision of the constitution and by-laws in reference to a change of employment has been waived, and that defendant is now estopped to assert a forfeiture of the policy. The learned circuit judge so held, and the judgment of the court below is affirmed.

Affirmed.