Cobble v. Royal Neighbors of America , 291 Mo. 125 ( 1921 )

This cause comes to this court from the Springfield Court of Appeals on the dissent of BRADLEY, J., wherein he sets forth, contrary to the majority opinion of the court, that By-law No. 33, hereinafter set out, is invalid, (1) because an unwholesome law and not founded on right and reason, and (2) because it runs counter to the common and statutory laws of the State and (3) it is out of line with the greater weight of authority in this country.

Elisha W. Cobble made application for membership in defendant's fraternal insurance company on the 27th day of December, 1909, and was admitted thereto on the 29th day of December, 1909, and a benefit certificate was issued to him in the sum of $1000, payable at his death, with plaintiff, his wife, beneficiary therein.

It is conceded that said Cobble was a resident of Springfield, Missouri, living with his wife and children; that he was a sober man of exemplary habits, and a carpenter by trade. On June 7, 1910, he left home to perform some work and has not been heard from since, although every avenue where information of his whereabouts might have been obtained was resorted to by plaintiff without success. Defendant was notified of his disappearance, but remained quiescent. All of the dues and assessments accruing on said benefit certificate were paid by plaintiff and accepted by defendant until more than seven years had elapsed since his disappearance. Plaintiff then gave notice of insured's death to defendant and demanded payment of said certificate, which was refused, and the present suit was instituted to recover the $1000 named therein, with interest thereon, from the date of insured's death.

Plaintiff was unsuccessful in the court below and, after motions for a new trial and to arrest the judgment had been filed and overruled by the court, said cause was duly appealed to the Springfield Court of Appeals.

In the application for said benefit certificate, it was agreed as follows:

"I agree to conform in all respects to the law, rules and usages of the society, now in force or which may hereafter be enacted and adopted by same; and this application and the by-laws of the society shall form the sole basis of admission to membership therein, and of the benefit certificate to be issued by the said Royal Neighbors of America.

"I fully understand the objects, organization, mode of government defining the qualifications for and the restrictions upon its membership.

"I further understand and agree that the laws of this society now in force or hereafter enacted enter into and become a part of every contract of indemnity by and between the members of the society, and govern all rights thereunder.

"I further expressly waive for myself, my beneficiary or beneficiaries, the provisions of any law, and the statutes of any state, now in force or that may hereafter be enacted, that would, in the absence of this agreement, modify or conflict with my contract with this society or cause it to be construed in any way contrary to its express language."

It was further stipulated that defendant was a fraternal insurance company incorporated under the laws of the State of Illinois, and that it has complied with the laws of this State and is authorized to do business as such in this State; that the authenticity of its by-laws was conceded and admissible in testimony, subject to objection for incompetency, irrelevancy or immateriality; that the expectancy of life of said Cobble had not expired prior to the institution of the present action, and had not since expired; that the payment of all dues and assessment had been made and received by defendant, as above stated, and that no point would be made on account of formal proof of death not having been filed with defendant as required by its by-laws.

It is contended by defendant that the following by-law effectually prevents plaintiff from instituting suit against defendant to recover on said benefit certificate, and postpones the jurisdiction of the court to entertain such suit until the expectancy of life of insured has expired.

Said by-law reads as follows:

"Sec. 33. No lapse of time or disappearance on the part of any member heretofore or hereafter admitted into the society, without proof of the actual death of such member while in good standing in the society, shall entitle his or her beneficiary or beneficiaries to recover the amount of his or her benefit certificate except as hereinafter provided. The disappearance or long continued absence of any member unheard of shall not be regarded as evidence of death or give any right to recover on any benefit certificate until the full term of the member's expectancy of life has expired within the life of the benefit certificate in question, and this law shall be in full force and effect, and any statutes of any state or country to the contrary notwithstanding."

The facts will be further noted when deemed necessary.

I. As will be seen the crux of the whole matter is wrapped in the question of the validity or non-validity of the above by-law. It is conceded by both sides, as we understand it, that said by-law operates and was intended to so operate, in theIssue. case in hand and all like cases, to postpone the payment of the benefit certificate and to prohibit the right to sue thereon, until insured's expectancy of life had been reached, and not then unless that event happened within the life of the benefit certificate.

II. Our statute, Section 6340, Revised Statutes 1909, provides that:

"If any person who shall have resided in this State go from and do not return to this State for seven successive years, he shall be presumed to be dead in any case wherein his death shall come in question, unless proof be made that he was alive within that time."

The common-law rule is stated as follows:

"Where a person has not been heard of for seven years by those who were living, would naturally hear from him, he will be presumed to be dead, unless the circumstances are such as to account for his silence without assuming his death."

The record before us appears to be silent as to whether or not insured "went from this State without returning to this State for a period of seven successive years."

Under this condition of the record it is plain that plaintiff cannot rely on said statute to establish the presumption of death of the insured. Said statute, however, is one thing, and the common law is another. The common law was not repealed by the statute. [Cobble v. Royal Neighbors of America, 219 S.W. (Mo. App.) 120; St. Louis Union Trust Co. v. Buck, 220 S.W. (Mo. App.) l.c. 718; Chapman v. Kullman, 191 Mo. l.c. 246; 22 Am. Eng. Ency. Law, par. 1245; Biegler v. Supreme Council,57 Mo. App. 419; Duff v. Duff, 156 Mo. App. 247; Flood v. Growney,126 Mo. 262, l.c. 264; Shown v. McMackin, 42 Am. Rep. (Tenn.) 681; Marden v. City of Boston, 155 Mass. 359.]

We quote from the majority opinion in the Cobble Case, supra:

"This restricted statutory rule, however, does not exclude the common-law rule on the same subject, so that the plaintiff may, and indeed must, bottom her case on the common-law rule rather than the statute."

The other authorities cited, we think, fully sustain the rule just quoted.

III. That said by-law runs counter to the rule of evidence established by both the common-law and the statute, we think, there is no doubt. See Purdy v. Banker's Life Assn., 101 Mo. App. 91, where it was held that "the by-laws of a corporation, duly enacted, and containing no provision contraryto the charter or the laws of the land, are binding on its members, and presumed to be known to them." It will be noted that the binding character of the by-law, as well as the presumption that the members have knowledge of it, depend upon the validity of the by-law itself. If the law is invalid the members thereof are neither bound by or chargeable with knowledge of it.

We think this proposition is fully sustained by the following authorities: Hannon v. Grand Lodge, 163 Pac. (Kan.) l.c. 171; Olson v. Modern Woodmen of America, 164 N.W. (Iowa) 346; Samberg v. Knights of Maccabees, 123 N.W. (Mich.) 25 McLaughlin v. Sovereign Camp Woodmen of the World, 194 N.W. (Neb.) 112; Supreme Ruling of Fraternal Mystic Circle v. Hoskins, 171 S.W. (Tex.) 812, l.c. 813-14; Eaton v. International Travelers Assn., 136 S.W. (Tex.) 817; Supreme Lodge Knights of Pythias v. Wilson, 204 S.W. (Tex.) 891, l.c. 894; National Union v. Sawyer, 42 App. Cases (D.C.) l.c. 480; Sovereign Camp Woodmen of the World v. Robinson, 187 S.W. (Tex.) 215; Gilmore v. Knights of Columbus, 107 Am. St. (Conn.) 17; Olson v. Court of Honor, 117 Am. St. (Minn.) 676; Lange v. Royal Highlanders, 121 Am. St. (Neb.) 786; Cooley's Const. Lim. (7 Ed.) 524; Sec. 3441, R.S. 1909; Sec. 2870, R.S. 1909.

In the case of National Union v. Sawyer, supra, at page 480, it is said:

"A general authority to make by-laws or amendments (such as defendant had in the instant case) does not authorize the passage of one that contravenes the law of the land. The statute declares the general policy of the law and any by-law or regulation contravening the statute is necessarily without effect."

In Hannon v. Grand Lodge, supra, at page 171, it is held:

"The rule as to the circumstances under which unexplained absence shall be deemed to raise a presumption of death is so well settled in this State as to have acquired substantially the force of a statute. It has been declared and applied by the courts and acquiesed in by the Legislature. Where the rule has been confirmed by statute by-laws similar to that here involved have been held inoperative as to a certificate already inexistence."

IV. Said by-law is unreasonable in the instant and all similar cases. Here insured was 39 years of age when he took out the benefit certificate, and plaintiff, his wife and beneficiary, was a year or more older than he, hence her expectancy in life was less than his. If the insured lived the full termUnreasonable. of his expectancy and his beneficiary lived the full term of her expectancy, she would be dead before his death and, hence, if said by-law is upheld as valid, plaintiff would be compelled to pay dues on said certificate as long as she lived, and before insured reached his expectancy in life, when she could maintain an action to recover on said certificate, she would be dead, and thus absolutely deprived of the very provisions for her relief which was intended by the insured in the first instance in taking out said benefit certificate and making her the beneficiary therein. We do not think the citation of authorities is necessary to sustain this proposition.

V. Said by-law, as conceded by both sides, undertakes to change the time, by postponement, when suit may be brought by the beneficiary on said benefit certificate from sevenPostponing years after the disappearance of insured until hisSuit. expectancy in life has been reached which, in the instant case, would be many years thereafter. Aside from this a mere reading of said by-law discloses on its face that this was its sole purpose.

Nor is there any question as to insured's relation with defendant being a contractual one.

Formerly limitation as to the time within which an action could be brought could be waived. But that has not been allowable since the adoption of the laws hereinafter set out first appeared in Laws of 1887, page 89. This act was contained in Revised Statutes 1889, section, 2394; again in Revised Statutes 1909, section 2780, and Revised Statutes 1919, section 2166. It appears though all of these statutes without amendment from said session acts, supra, to date. They read as follows:

"All parts of any contract or agreement made or entered into which either directly or indirectly limit or tend to limit the time in which any suit or action may be instituted, shall benull and void." [Karnes v. Ins. Co., 144 Mo. 413; Richardson v. Railroad, 149 Mo. 311; Roberts v. Modern Woodmen,133 Mo. App. 207.]

We do not think the term "limit or tend to limit" the time within which suit may be brought contained in said statutes applies exclusively to shortening such time. We think, it must inevitably apply to a postponement of the right to sue where, as here, the attempted postponement carries it years beyond the Statute of Limitations.

These statutes have apparently been overlooked by all concerned, but it is apparent that they were in force at the time said by-law was written changing the time within which suit might be instituted, and that it was written with full knowledge of their existence by defendant.

VI. It is contended by defendant that said by-law became a part of the contract of insurance the same as if it had been written therein. That has never been true of an invalid law of any kind in so far as it related to contracts. As shown aboveInvalid the by-law in question is absolutely void and, hence,By-Law: could not be, and is not, a part of the contract. AndPart of that attempted waiver by insured for himselfContract. and his beneficiary contained in his application for said benefit certificate was of no force or vitality; it was merely nil.

VII. The authorities from our sister states are not in harmony as to the validity or non-validity of said by-law and similar by-laws, but we think those which are better considered hold that said by-law runs counter to the rule of evidence (which is neither more nor less than a rule of public policy) establishing an absence of seven years of insured, unheard from, as the time when suit may be brought, which is the better rule. This we think is the more humane rule and more in keeping with the right and justice of the situation, and we think that those authorities ought to be followed in this case, for the reason that the beneficiary may not, in the end, be deprived of the very benefit intended for care and support after the death of the insured which was the prime object had in view when the benefit certificate was taken out. We do not think that the right of the beneficiary to recover in this case should be lost sight of in the confusion of said by-law which, if upheld, in this case would allow the beneficiary to die before the insured reached his expectancy.

Furthermore, so far as our research has gone, we know of no state, except this State, having a statute like the one referred to above.

The conclusion we have reached renders it unnecessary to prolong this opinion by the discussion of other matters contained in the record. We hold that said by-law runs counter to the common law and said statute; that it is unreasonable, in the instant case, and that it is squarely against the statute above set out, and, therefore, void. We think the cause ought to be reversed and remanded with directions to the lower court to set aside its judgment and enter judgment for plaintiff in accordance with the prayer of her petition.

It is so ordered. Railey, C., dissents for reasons stated in majority opinion of Springfield Court of Appeals; White, C., dissents and thinks opinion of Sturgis, J., should be adopted.