— The plaintiff, Prank L. Bowman, receiver of the Fraternal Home, a fraternal beneficial association, incorpiorated, recovered judgment against William W. Anderson, Prank Clark, Margaret Tilley, administratrix of Hiram Tilley, deceased, and Elsie Sanderson, administratrix of Charles D. Sanderson, deceased, for $33,414.95. Defendants have appealed.
The Fraternal Home began business in 1899 with its principal office at Hamilton, Caldwell County. Anderson, Clark, Tilley and Sanderson constituted its first hoard of supreme directors. Anderson was president, Clark Vice-president, Tilley treasurer, and C. Norman Sears secretary. The by-laws provided:
“If the application is accepted by the Supreme Medical Director, a benefit certificate shall he issued, signed by the Supreme President and the Supreme Secretary, for such an amount as the Supreme Medical Director shall authorize, hut not to exceed $2000 from eighteen to and including forty-five years of age at nearest birthday; $1000 from forty-five to and including fifty years of age at nearest birthday, and $500 from fifty to and including fifty-five years of age at nearest birthday.
“Death Proofs.• — If a member is removed by death, the President and Secretary of his lodge shall investigate and promptly report to the Supreme Secretary the circumstances, date and cause of death. Upon receipt of such report the Supreme Secretary shall send to the Subordinate Lodge secretary the blank forms prescribed by the Board of Directors to be executed by the proper persons to make proofs of death and claimant’s legal right to benefit, satisfactory to the Board of Directors. All such proofs to be acted upon, by the Board of Directors must he executed in the form prescribed by said Board of Directors, and upon blanks furnished by the Supreme Secretary. After being properly executed, received, passed upon ■and allowed by the Board of Diregtors, the Supreme Secretary, as soon as the funds on hand will justify, shall draw an order on the Supreme Treasurer, attested by the Supreme President, payable to the order of the person or persons found legally entitled there*13 to, for the amount due upon benefit certificate of the deceased, and the Supreme Secretary shall see that the same is delivered to the person who is entitled thereto, and the same shall be paid by the Supreme Treasurer upon surrender to him of the benefit certificate of deceased member, properly receipted. ’ ’
On July 31, 1906, the membership of the Fraternal Home was 6610, and was greater than it had ever been previously, so far as the record shows. The cash receipts for June, 1906, were $6819.30 and for July $6693.08, each of those monthly receipts being greater than for any previous month. At that time it had on hand assets as follows:
Real estate mortgage loans ..........$10,250.00
■ Cash ............................... 7,824.78
$18,074.78
, So far as the evidence shows, the amount of the cash and bills receivable had never been greater than on July 31, 1906, except in April preceding when it was $19,468.77.
During the month of July, 1906, thirteen death losses, amounting to $12,750, were proved up in the regular way and filed in the Supreme office. No formal entry was made in the record of proceedings of the directors allowing the claims based on those proofs of loss. All of the proofs except three had the following indorsement ■ thereon:
“Submitted to the Board of Directors of the Fraternal Home............ 1906, and allowed in the sum of $. .........., C. N. Sears, Supreme Sec. ’ ’ Those blanks were properly filled.
The evidence shows that it was not the custom to make the record of proceedings of the directors show such allowance of the death losses, but that such allowances were ordinarily shown by such indorsement of the secretary on the proofs. So far as the evidence shows, the death losses for July, 1906,
On July 31, 1906, the board.of directors entered into a so-called contract of re-insurance with the Kansas City Life Insurance Company, an £<old-line” company. By that agreement all the assets of the Fraternal Home were transferred to the other company, which agreed to pay all liabilities of the Fraternal Home, specifically naming the thirteen death losses above mentioned.: It also agreed on certain terms, not necessary to be here stated, to insure those members of the Fraternal Home who should, in the manner there provided for, agree to accept such insurance on those terms. No provision of any kind was made for those members of the Fraternal Home who should fail to so accept. Both Anderson and Clark testified, in effect, that they were alarmed at the death losses in July and considered the Fraternal Home as insolvent. Anderson testified as follows:
"Q. Now, how long were you consulting over this proposed transfer, Mi\ Anderson, as president of the Fraternal Home? A. Well, sir, now, that is a question that is spread over most of the time of the Fraternal Home’s life. We come very near merging with two or three or four or five' or six other concerns, since we were in hard straits; we took over some little orders ourselves — merged with others — and we talked some with the Kansas City Life and some with other institutions, a year or two before we merged, and we were afraid we would get on the breakers, and some of the — not many — in fact, the only company was the Kansas City Life, that would take our old members that got too old to find insurance any other place, and those that were sick and in no condition to stand re-examination;, there wouldn’t nobody take them except the Kansas City Life, without re-examination.
"Q. You had had the matter up with the Kansas City Life for some -time prior to the 31st day*15 of July, 1906? A. Oh, we talked to them about it quite a while before, as we had with others.”
Clark testified as follows:
“Q. How long had this question of the merger of this company with the Kansas .City Life been contemplated or discussed before it was done? A. Oh, probably for a year, not with the Kansas City Life, in particular, but with other organizations.”
The evidence shows that no member of the Fraternal Home except such directors and Sears, their secretary, had any knowledge of the contemplated deal with the Kansas City Life Insurance Company until after it was closed. Lodge Number One, with two hundred and seventy-two beneficiary members, was located at Hamilton. All of the directors of the Supreme Lodge were residents of Hamilton and members of the local lodge at that place.
Immediately after July 31, 1906, all the assets of the Fraternal Home, including the office furniture, were turned over to the Kansas City Life1, and no further business of any kind was done by said board of directors of the Fraternal Home except as hereafter stated. The assessments called by the board.of directors in July and sent to the Fraternal Home by the subordinate lodges in August amounted to $6474.-70, which was by the directors turned over to the Kansas City Life Insurance Company under said agreement. After July 31, 1906, members of the Fraternal Home to the number of 3769 accepted the terms of the agreement made of that date and became policy holders in the Kansas City Life Insurance Company. The evidence does not show the respective amounts called for by their beneficiary certificates, nqr does it show the ag;es of such.persons or the comparative amounts of their monthly assessments.
On August 23, 24 and 25, 1906, á meeting of delegates from 134 subordinate lodges of the Frater
On March 18, 1907, about fifty of those persons who held benefit certificates in the Fraternal Home filed a petition in a suit against the Fraternal Home, the Kansas City Life Insurance Company, said former directors of the Fraternal Home, and the State Superintendent of Insurance, ashing for the appointment of a receiver for the Fraternal Homeland for a judgment against said former directors for the amount of property turned over by them to the Kansas City Life Insurance Company. On June 17, 1908, a demurrer to the petition was sustained, on the
The petition is in three counts. The first seeks to recover $18.074.78, being the sujn total of the cash and bills receivable turned over to the Kansas City Life Insurance Company, and also $300, the alleged value of the office furniture. - The second count seeks to recover $6500, the alleged amount of the' assessments collected in August, 1906, and turn-, ed over to the latter company. The third count sought to recover excessive salaries received by the directors of the Fraternal Home. This count is not in controversy here.
The answer admitted the making of the agreement with the Kansas City Life Insurance Company. It alleged that since January, 1906, the membership of the Fraternal Home and its cash assets had been declining and that it was insolvent; also alleged that said contract was made in good faith for the best interests of the members of the Fraternal Home. It alleged that plaintiffs had been guilty of laches. It admitted that the amount of cash and bills receivable mentioned in the first count of the petition had been delivered under that agreement to the Kansas City Life Insurance Company, also the office furniture of the value of about $100. It alleged that there were outstanding checks against the Fraternal Home amounting to $728.66 at the time of the transfer, and that those checks were paid by the Kansas City Life Insurance Corhpany. That about four thousand members of the Fraternal Home signed and sent to the
‘ ‘ That in death losses, claims, expenses and legitimate liabilities of the Fraternal Home, the said Kansas City Life Insurance Company has paid out and expended for said Home and for the benefit of its members, under said trust agreement, more than all the property, money and assets of any and all hinds received under said trust agreement was worth and amounted to, and for which defendants ask credit; that there are still unsettled and unadjusted claims of the Fraternal Home which are being pressed and threatened to be pressed in the courts against the Kansas City Life Insurance Company under and by virtue of said trust agreement, and but recently the said Kansas City Life' Insurance Company has been sued in the circuit court of Jackson County, Missouri, for the death loss of one John W. Cox, on a policy issued by said Fraternal Home, and judgment has been rendred thereon against the said Kansas City Company for over $3000 and costs, which judgment said insurance company will be forced to pay and which was rendered and prosecuted under and by virtue of said trust agreement.” The answer as to the second count of the petition contained among other things the following:.
“Further answering the second count of said petition the defendants say that immediately after the execution of the trust agreement and re-insurance contract between the Fraternal Home and the Kansas City Life Insurance Company hereinbefore referred to in this answer, some 4000 members of the Fraternal Home ratified said contract and paid their dues, premiums and assessments to the Kansas City Life*19 Insurance Company, and these defendants had nothing to do with said money and received no money from the members of the Fraternal Home after July 31, 1906, nor at any other time, and any and all money received by the Kansas City Life Insurance Company, if any, from members of the Fraternal Home, in August, 1905, was paid out by it for the benefit of the Fraternal Home.” •
There is no reply in the record, but the case was tried on the theory that there was a general denial to the answer.
By stipulation the cause was tried before the Hon. B. J. Casteel as referee. The defendants offered in evidence the proofs of death in the thirteen claims which were specifically mentioned in the contract with the Kansas City Life Insurance Company. Those proofs were on the forms furnished by the Fraternal Home. Each of them consisted of the original beneficiary certificate, or a copy thereof, the affidavits of the beneficiaries, a friend, the attending physician, the undertaker, the president and secretary of the local lodge, showing the death and burial, relationship and- other essential facts. To the introduction of those proofs the plaintiff objected as follows:
“The position of the plaintiff, in reference to the proofs of loss offered, is that the proofs themselves constitute no liability whatever of the Fraternal Home, or a claim against the Fraternal Home, and that it is not offered to show, in connection with the proofs of loss referred to, that the tribunal authorized to pass upon proofs of loss by the by-laws and constitution of the Fraternal Home, had ever passed upon or ratified the proofs of loss now offered, and that the sole power and authority to pass upon those proofs is provided in the by-laws, as the supreme board of directors of the Fraternal Home — these defendants— and inasmuch as it is not offered to follow up the proofs of loss themselves by the further proof that*20 they had been passed upon and allowed as claims, either before the 31st day of July, 1906, by the proper tribunal of the Fraternal Home, under its by-laws and constitution, plaintiff insists that said offer should be refused.” . -
The objection was overruled.
Defendants also offered in evidence proofs of death in the matter of the claim of Pearl Bookmiller under the certificate on the life of one Bookmiller. The proofs in that case are not set out in the abstract for the reason, as stated by-counsel, that they could not be found. The plaintiff made the same objections thereto as were made to the other proofs of death, and made no other objections. The objections were overruled. The evidence showed that all those death claims were paid by the Kansas City Life Insurance Company. There was no evidence to sustain the claim that the Kansas City Life Insurance Company paid any outstanding checks of the Fraternal Home.
Defendants claimed credit for $2000 paid on the Cox claim. That claim had been put in judgment against the Kansas City Life and that judgment was affirmed by the Kansas City Court of Appeals, in
The referee made his report in which he found that the Kansas City Life Insurance Company had received. under the contract cash and bills receivable amounting to $18,074.78, the office furniture valued at $100, that it had paid the thirteen death claims specifically mentioned in the contract, amounting to $12,-750; that 3769 of the members of the Fraternal Home had signed the acceptance slips and sent them to the
“Fifth. That after said transfer, the death of Pearl Bookmiller, who held a certificate in the Fraternal Home and who had died prior to the transfer, was reported to the Kansas City Life Insurance Company, and said company settled that claim by paying $925; the death had never been reported to, nor the claim allowed by, the Fraternal Home.”
Also the following:
“In my opinion the board of directors did allow the following claims, namely: J. M. Spradlin, $1000; Henry Walker, $900; George E. Marcum, $500; Annie W. Campbell, $500; Nathaniel J. Murphy, $1000; W. E. Bryan, $650; H. S. Hatterton, $100; Annie W. Stroup, $900; Lizzie Breshears, $900; Retta N. Sears, $1000; William F. Wren, $2000; John F. Varnell, $500; William J. Manes, $1000; making a total of $12,750, and authorized their payment by the Kansas City Life Insurance Company, and said payment was made by said life insurance company, and in view of all the facts; I recommend that the claim for those death losses he allowed, and that defendant be credited with that sum.
“Second. As to the credit asked for $728.66, claimed to he in outstanding checks against the Fraternal Home at the time of the transfer, the proof, in my opinion, is insufficient to allow, that claim, and I recommend that it be not allowed.
“Third. The Bookmiller claim was not reported until after the transfer, although the death occurred prior thereto. It was not reported to nor allowed by the board of directors. The amount paid by the Kansas City Life Insurance Company, in compromise of said claim, was $925, which I do not think should be allowed and I so recommend.
“Fourth. The J. W. Cox claim of $2000, who died some eight months after the transfer, and who*22 had signed a certificate of acceptance of reinsurance in the Kansas City Life Insurance Company, and whose widow afterwards recovered judgment and received from the Kansas City Life Insurance Company $3040 (See Cox v. Kansas City Life Insurance Co.,154 Mo. App. 464 ), should not he allowed, and I so recommend.
“Fifth. As to the other claims asked credit for, I am of the opinion that none of them, under the proof, should he allowed, and I so recommend.
“So that, after deducting from the assets transferred ($18,074.78), the death claims allowed and mentioned in the agreement, amounting to $12,750, there would remain $5324.78, and interest thereon at six per cent per annum, from July 30, 1906, to December 31, 1911 (five years and five months), amounting to $1730.55, making, in the aggregate, principal and interest $7055.33, for which sum I recommend that judgment he allowed in favor of plaintiff and against the defendants on the first count in the petition.
“The amount claimed in the second count of the petition, for the August collections, shown to he $6474.60, under the findings of fact, with interest thereon at six per cent per annum from August 1,1906, to December 31, 1911, amounting to $2070.54, making principal and interest $8540.98, for which sum I recommend that judgment he given for plaintiff and against the defendants.
“The testimony shows that there was an item of accrued and unpaid interest on notes transferred to the Kansas City Life Insurance Company amounting to $404.50, and office furniture and fixtures of the value of $100, but as plaintiff has not asked judgment for those sums, it will not he given.”
Neither the referee in his report nor the courtmade any finding on the question as to whether the contract between the Fraternal Home and the Kansas City Life
■ Exceptions to that report were duly filed by both sides. Those exceptions were sufficient to raise all questions here discussed. The circuit court overruled all of the exceptions of the defendants, and, on plaintiff’s exception, disallowed the credit for $12,750 paid by the Kansas City Life Insurance Company on the thirteen death claims specifically mentioned in the agreement.
The plaintiff was allowed to amend the first count of his petition so as to include the claim for $405.50, the amount of interest accrued on the real estate loans at the time they were transferred to the Kansas City Life Insurance Company.
The court on March 25, 1912, rendered judgment in favor of the plaintiff for the assets of the Fraternal Home delivered to the Kansas City Life Insurance Company, as follows:
On first count:
Real estate loans........................ $10,250.00
Interest then accrued thereon............. 405.50
Cash ................................... 7,824.78
Value of furniture....................... 100.00
■ $18,580.28
Interest on above items from Sept. 1, 1906,
to date of judgment................. 6,199.60
$24,779.88
On second count:
Assessments, paid in August.............. $6,474.70
Interest to date of judgment............. 2,160.35
$8,635.05
The by-laws provided that proofs of death and of the claimant’s rights should be made in the manner there called for, and also provided for an allowance of such claims by the board before the payment of them. We may concede without-deciding that the making of proofs of death and of the claimant’s right is necessary for a recovery on such a claim. But,
The necessary proofs were made in all the thirteen claims specifically mentioned in the contract. All but three of them were indorsed by the secretary as having been allowed by the board. The provision made in the contract for their payment was certainly a sufficient allowance by the directors. They were paid. That ought to be the end of the controversy as to those items.
The Bookmiller claim on which $925 was paid by the Kansas City Life Insurance Company is somewhat different. The death in that case occurred a few days prior to July 31st. The proofs were made after that date and presented, not to the Fraternal Home, but to the Kansas City Life Insurance Company. They could not be presented to the Fraternal Home for the reason that its offices were closed. Those proofs were put in evidence. The plaintiff made the objection thereto as set out in the statement. That objection did not go to the sufficiency of the proofs nor to their probative force as such proofs, but was confined to the proposition that the claim had not been allowed by the Fraternal Home, and that, in the absence of such allowance, such proofs constituted no liability of that fraternity. That objection was properly overruled. It results that the proofs as to that claim were in evidence without any valid objection being made thereto.
From the statement of appellants ’ counsel in their abstract it appears that since the hearing before the referee, those proofs have disappeared, and, for that reason, were not shown in the abstract. As the ob
1. Merely to prove that such proofs were made, in order to show compliance with the conditions of the contract of insurance.
2. To prove the existence of the facts therein stated, i. e., the death, etc.
There is no question but that for the‘first purpose they were competent and sufficient. For the second purpose they were incompetent as was held in Newmark v. Insurance Co.,
In the matter of the Bookmiller claim no valid objection was made to the proofs; neither the referee nor the court was asked in any way to limit the probative force of that evidence to the first mentioned purpose. The respondent raises the point here for the first time. lie says that there is no evidence justifying the allowance of this claim in favor of the defendants. It was held in the following cases that where incompetent evidence is admitted without objection it must be given its probative'force; Damon v. Carrol,
Those proofs as to the Bookmiller item consisted of ex parte affidavits. They were incompetent, it is true, hut they were such proofs as the directors were receiving as the basis of other such payments. They had probative force with the dire'ctors, and, in the absence of objection or distinction made as to the two purposes they were calculated to serve, the referee and the court had the right and it was their duty to consider them to the full extent of their probative force. Had the point been made at the hearing that those proofs were only competent for the first above named purpose, the defendants could doubtless have supplied the necessary evidence.
The point is made that the answer did not claim credit for the payment of this item. It did not specifically name it or any other such item, hut stated that the Kansas City Life Insurance Company had paid out on the liabilities of the Fraternal Home more than, the “assets received by it. If plaintiff desired a more specific statement he should have made the necessary motion.
The defendants should he allowed credit for the amount of that claim. It is otherwise as to the payment made on the Cox claim. In that case the certificate-holder had notified the Kansas City Life Insurance Company of his acceptance of the terms of the agreement and had offered to comply therewith. That claim was adjudged to he valid, not against the Fraternal Home, hut against the other company, which merely paid its own debt.
The appellants seek to avoid the effects of the rule that the property belongs to the body composed of the persevering members by saying that the Fraternal Home did no business after July 31, 1906. Of course, if the fraternity, as such, became defunct on that day, all those who were members on that day would be entitled to their pro rata share of the assets. Appellants are in no position to claim that the Fraternal Home died on July 31, 1906. On August 25th following, they became co-"
The judgment is reversed and the cause is remanded with directions to enter a judgment on the first count in which defendants shall be charged with the value of assets received by the Kansas City Life Insurance Company as follows:
Real estate loans........................ $10,250.00
Interest then accrued thereon............. 404.50
Cash :....................... 7,824.78
Furniture .............................. 100.00
$18,579.28
and credited with the following:
Amount of the thirteen claims specifically
named in the agreement............. $12,750.00
Bookmiller claim........................ 925.00
$13,675.00
Leaving a balance of................... $4,904.28
On which balance interest shall be allowed plaintiff at six per cent from July 31, 1906, to the time at which the payment shall be entered.
On the second count, judgment shall be entered for $6474.60, the amount of the August collections, together with interest calculated as in the first count.
— The foregoing opinion of Roy, C., is adopted as the opinion of the court.