127 Tenn. 521 | Tenn. | 1912
delivered the opinion of the Court.
Mrs. Cunningham brought this suit in the circuit court of Davidson county to recover of the defendant the face value of a benefit certificate issued by it to her husband. There were a verdict and judgment for plaintiff in the court below, and upon appeal to the court' of civil appeals, the action of the circuit court was in , all things affirmed. A petition for writs of certiorari to the judgment of the court of civil appeals was filed in this court, which has been allowed, and the case has been argued at the bar.
Plaintiff in error is a fraternal benefit society incorporated under the law's of the Dominion of Canada. Its ehief executive officer is known as the supreme chief
Cunningham made application for membership into the order at the repeated solicitation of Boger, on February 19,1908. On that day he was physically examined by a physician selected by the order for that purpose in conformity with the requirements of the order, and was the next day accepted as a proper risk. On the night of the 19th, Cunningham discovered that his feet and legs were swollen, and consulted a physician, who informed him that he had acute nephritis, or Bright’s disease, and advised him to take his bed; but the assured was not suffering, and did not regard his condition as serious, and on the next day returned to work as usual. On that day the physician who had examined Cunningham for the order gave to Boger a repoTt of his examination which failed to show any evidence of the disease. Boger, having authority to do so, initiated Cunningham into the order and accepted him as a risk for insurance. Cunningham took his bed on the night of the 20th, and
The benefit certificate did not actually issue until March 6, 1908, and was not delivered to Cunningham until several days thereafter. Boger became aware and knew that he was suffering from Bright’s disease before the benefit certificate was delivered. Other members of the subordinate lodge to which Cunningham belonged were also aware of his condition and visited him during his sickness. Boger visited him at least twice, and discussed with him the question as to whether he was entitled to sick benefits from the order. With full knowledge of the real facts, Boger delivered the benefit certificate and collected the dues or assessments under the rules and regulations of the order until Cunningham’s death. One of the provisions of the constitution and by-laws of the plaintiff in error is as follows:
“An applicant for membership, who may be ill or suffering from an injury of any kind at the time he presents himself for initiation, shall not be initiated, even though he has been duly examined and recommended by the court physician, or other duly authorized examining physician, or his medical examination has been accepted by the medical board, until after he has fully recovered from such illness or injury, and until he has again been examined by the court physician, and such medical examination has been accepted by the medical board.”
The plaintiff in error defended below upon the ground, among others, that the assured was initiated into the order in violation pf the foregoing provision of the by -laws,
It is said for the plaintiff in error that, because it is a mutual benc°t society, the rules of waiver and estoppel as applieu to stock insurance companies do not apply to it, for the reason that its officers and agents cannot waive conditions which go to the substance of the contract between the society and the members. This distinction is.sought to be supported upon the idea that each member of the organization must be conclusively presumed to have knowledge of the limits set upon the authority of the agents and officers of the society to which lie belongs; and that, the burdens and benefits' of such an organization being mutual as between the membership, it would be unjust and inequitable to permit an officer or agent of the order to waive a condition of forfeiture. The contention of counsel upon this point is best stated in the language of Mr. Niblack in his work on Benefit Societies, from which the following is taken:
“Mutual benefit societies and stock companies are essentially different in their plans of carrying on the business of life insurance. Societies have many by-laws, which are a part of the contract of insurance, and which are binding on all the members, whether officers or not. Thev are conducted on .the principle of mutuality, and*528 shóuldgive ..insurance to each member oh the same ■ terms, ■ eon d it ions, and restrictions. It •'would be destructive of this equality in the contract of insurance' to' give ■to anhoftcer -the power ¡to waive the provisions of á bylaw which relates to the substance of the contráct. As ■ a general rule, an officer of a mutual benefit society has no authority to waive a strict compliance with the bylaws .on the. part of a member. The society has power to establish by-laws, and it. is the imperative duty .of the members;to comply with them. . . This rule, ’however, does not extend, to those by-laws which relate to the clerical transactions of its business, or to the mode of establishing its liability. By-laws in regard to proof óf'death! óf h ihember, for instance, may be waived. But it is well settled that the officers of such a society have no authority to waive those of its by-laws which relate to the substance of the contract between it and a member, determine the relations of members to each other, or in any manner fix the. rights and liabilities of the parties.”
The authorities, cited in support of the text are Burbank v. Association, 144 Mass., 434, 11 N. E., 691; Swett v. Society, 78 Me., 541, 7 Atl., 394 Mulrey v. Insurance Company, 4 Allen (Mass.), 116, 81 Am. Dec., 689; Lyon v. Society, 153 Mass., 83, 26 N. E., 236, and two cases from the intermediate courts of Illinois and Missouri. Mr. Bacon takes the same, distinction. . In his work on Benefit Societies of Life .Insurance, at section 434, he cites in support of the. text the-case from Maine, ■supra, one‘dfithe cases fromi'• Massachusetts,'Sifpra', and an additional.case from ;that State,.-together .with.a cas*
It appears from the evidence that this deed covers the southwestern thirty-foot front of the land described in the second deed, the unrecorded deed which was made by Brown to the defendant Home Ice & Coal Company,
Shortly before the present suit was brought the defendant erected a bam upon a portion of this thirty feet, and thereupon the present action was brought by Campbell, claiming title under his deed from Crumley, and alleging that he had no knowledge of the prior unrecorded deed to the defendant, and that he was a bona fide purchaser. The defendant answered, admitting that its deed of May 21 had never been recorded, but averring that the complainant’s deed was champertous, because at the time of its execution the defendant was in open and adverse possession of the. lot in controversy. The other defense was that the complainant was claiming through a quitclaim deed from Brown to Crumley, and inasmuch as Brown had conveyed the lot ■in controversy to the .defendant, by the unrecorded deed referred to, there was nothing left in him which the:quitclaim deed could convey.
-The case-was'heard before Hon."S..'C. Williams, dd'eei ál chancelló^, itáúcr&ecteed in favor-ofb'óntblainánt,
It may be conceded that the contract of insurance between the society and its members is laid out upon such lines as to preserve the quality of mutuality underlying the scheme of organization and operation. If the rules and regulations of the society should be strictly observed, the principle of mutuality would be preserved. But if the officers and agents, acting within the real or apparent scope of their authority, pass by a rule or regulation intended to preserve mutuality, and induce a member to act upon the assumption that the regulation is waived,, and, so acting, change his condition for the worse, .the principle, of .mutuality is,, waived, together with the regulation itself. This is obviously so,.bemuse
What .appears to be a great weight of modern authority is iii accord with this holding. Modern Woodmen v. Breckenridge, 75 Kan., 373, 89 Pac., 661, 10 L. R. A. (N. S.), 136, 12 Ann. Cas., 636; Whigham v. Independent Foresters, 44 Or., 543, 75 Pac., 1069; Ball v. Granite State Mutual Aid Ass’n, 64 N. H., 291, 9 Atl., 103; Modern Woodmen of America v. Lane, 62 Neb., 89, 86 N. W., 945; Thornburg v. Farmers’ Life Ass’n, 122 Iowa, 260, 98 N. W., 105; Modern Woodmen v. Colman, 68 Neb., 660, 94 N. W., 814, 96 N. W., 154; Pringle V. Modern Woodmen, 76 Neb., 384, 107 N. W., 756, 113 N. W., 231; Kentucky Growers’ Insurance Co. v. Logan et al. (Ky.), 149 S. W., 922.
The. principle was stated in McCarthy v. Catholic Knights, 102 enn., 345, 52 S. W., 142; Masonic Life Ass’n v. Robinson, 149 Ky., 80, 142 S. W., 882, 41 L. R. A. (N. S.), 505; Walker v. Independent Order of Foresters, 162 Ill. App., 30; Foresters of America v. Hollis, 70 Kan., 71, 78 Pac., 160, Ann. Cas., 535; Trotter v. Grand Lodge, 132 Iowa, 513, 109 N. W., 1099, 7 L. R. A. (N. S.), 569, 11 Ann. Cas., 533.
Having determinen that the officers and agents of the association may waive the provision for forfeiture, it is perfectly, clear upon our authorities that Roger was sucli an agent of the society and that he acted for it. Murphy v. Southern Life Insurance Co., supra. In the case of Trotter v. Grand Lodge, supra, the supreme court of Iowa said;
*533 “The authorities are substantially unanimous that in schemed of co-operative life insurance, in which the authority to issue benefit certificates, prescribe terms of membership, and levy assessments is vested in a grand or supreme lodge, or council, or other central governing body, which central body exercises jurisdiction over' local lodges or societies, through which the membership is recruited, and by the officers of which assessments are collected and remitted, the local organization and its officers, to whom the duty of making such collections is committed, are to be considered the agents of the governing body. Bragaw v. Supreme Lodge, etc., 128 N. C., 354, 38 S. E., 905, 54 L. R. A., 602; Fraternal Aid Ass'n v. Powers, 67 Kan., 420, 73 Pac., 65; Whiteside v. Supreme Conclave, etc. (C. C.), 82 Fed., 275; Schunck v. Gegenseitiger Wittwen, etc., Fond, 44 Wis., 369; Bacon’s Ben. Soc. (3d Ed.), 148; Brown v. Supreme Ct., etc., 176 N. Y., 132, 68 N. E., 145.”
The remaining question is whether the conduct of Boger as disclosed by the record amounts to a waiver of the forfeiture or an estoppel of the society to set it up. We think clearly that it does. It is beyond doubt that he knew the condition of Cunningham before the policy was delivered. This being true, it is immaterial whether he knew of his condition at the time of the application or not. The evidence indicates that Cunningham himself did not realize his condition at the time of the application, and it is certain that the examination made by the society’s physician did not disclose any evidence of nephritis. There is no criticism upon the ability of this
The judgment of. the court of civil appeals is affirmed, with costs.