259 Pa. 452 | Pa. | 1918
Opinion by
In this action of assumpsit Katherine Lafferty sought to recover from the Supreme Council Catholic Mutual Benefit Association the sum of $2,000, with interest, being the amount of a certificate issued January 6, 1896, to John M. Lafferty, and payable upon his death to his wife, the plaintiff. In her statement of claim she averred that Lafferty left his home in the City of Pittsburgh on February 15, 1907, and has not been seen or heard of since, though extensive search and diligent inquiry has been made for him, and, therefore, the presumption of his death arose on February 15, 1914, at which time he was a member in good standing of .tbe association.
Defendant admitted that, on February 15, 1914, Lafferty was in good standing, as a member of the association, but averred that he was subsequently suspended from membership, and later expelled, in accordance with certain provisions of the constitution and by-laws of the association. It further averred that proof of the actual death of Lafferty had never been filed with the association, and that the certificate in question had been issued in express terms subject to the laws, rules and regulations of the association, which contained, inter alia, a provision as follows: “No time of absence or disappearance of a member, without proof of actual death, shall entitle his beneficiary, family or next of kin, to receive any part or portion of said fund, except that when a member has disappeared, and has not been heard from for twenty years, and when, if living, it appears from our records that he would be severity years of age” certain payments are to be made on specified conditions.
. On the trial defendant’s counsel offered in evidence Lafferty’s application for membership, the medical cer
• The first assignment of error raises the important question in this case, as it complains of the action of the trial judge in excluding the application and the constitution on the ground that defendant is substantially an insurance company, and not a beneficial association. The Act of 1881 applies only to insurance policies, and does not affect certificates of membership in beneficial associations. Two of our late cases, in which the line of distinction has been drawn, are Ogle v. Barron, 247 Pa. 19, and Marcus v. Heralds of Liberty, 241 Pa. 429. In the former case the Royal Arcanum was held to be doing business as a beneficial association and not as an insurance company, and in the latter case it was held that the Heralds of Liberty, while issuing a certificate purporting to be that of a beneficial association, actually carried on an insurance business, and that its contracts were subject to the Act of 1881. In giving the reasons foi' holding that the Royal Arcanum was a beneficial association .as distinguished from a life insurance company, we:said, in Ogle v. Barron, 247 Pa. 19, 22, “The.charter Of the garnishee shows that it is incorporated ffor the purpose of fraternal union, aid to its members and their
The act of incorporation, which constitutes the charter of defendant, the Catholic Mutual Benefit Association, provides: “Section 5. The object of this corporation shall be. to improve the moral, mental and social condition of its members, and to educate them in integrity, sobriety and frugality, to endeavor to make them contented with their position in life, and to aid and assist members or their families, in case of death.”
The declared objects of the two associations are practically the same, except that defendant undertakes only to aid members or their families in case of death, and not to establish a fund for the relief of sick and distressed members. In Ogle v. Barron, we further said (p. 22) : “It was shown that the garnishee operates through subordinate councils, and that defendant’s husband was a member of such a subordinate council. Before becom-. ing a member, he was required.to undergo investigation as to his qualifications for membership. He was also required to make certain pledges which related to his future conduct as a member of the council. These requirements are not consistent with the contention that the garnishee conducted the business of an insurance company, or that it did not maintain itself as a fraternal beneficiary association.”
These statements are equally applicable to the present defendant. It operates through subordinate branches^ another name for councils. Before becoming a member of a branch (by-laws, sec. 175) an applicant must pos
When an application has been made, it is required (Sec. 179) to be read at a regular meeting of the branch, entered on the record and referred to the board of trustees for invéstigation. They must inquire and report at the next regular meeting of the branches as to the character and fitness of the applicant to become a member. If their report be favorable the applicant is balloted for by secret ballot, and if approved is admitted. If the report of the trustees be unfavorable he is declared rejected, without debate. More than two black balls out of the first ten votes cast and more than one black ball out of any subsequent fen, are sufficient to prevent the election of the applicant. If the applicant is elected (Sec. 181) he must present himself for initiation at a regular meeting of the branch within one month of his election, and is not entitled to any benefit unless he has been duly initiated. Immediately upon his initiation, (Sec. 4) the financial secretary of the branch is required to forward the new member’s application, with a report of his initiation to the grand secretary of the association, who must enter his name upon the roll of the branch in his office. Members (Secs. 218, 220, 235) may be sus
All these requirements are consistent with the claim of defendant to be a beneficiary association, but they are not in keeping with the manner in which an insurance company is managed or controlled. This is particularly true with respect to the avowed purpose of the association to improve the moral, mental and social condition of its members, and to educate them in integrity, sobriety and frugality, and its endeavor to make them contented with their position in life. There was no evidence to show that the affairs of the association were conducted otherwise than in the manner prescribed by the constitution and by-laws, and the testimony of the officers, at the trial, indicated that the provisions of the constitution and by-laws were observed in practice by the supreme council and the subordinate branches. This was quite in contrast with the methods and the management disclosed in Marcus v. Heralds of Liberty, 241 Pa. 429, where it was determined that the defendant was doing business as an insurance company. Mr. Justice Elkin there found (p. 435) : “After a careful reading of all the evidence presented by this record we discover that but little attention is paid to the social, fraternal and benevolent features of the order; but., on the other hand, the plan of organization, the method of soliciting business, the emphasizing of the advantage of being insured, the minimizing and in large areas the elimination
In the case at bar the facts do not justify any such conclusion. In the opinion in Marcus v. Heralds of Liberty, 241 Pa. 429, much stress was also laid on the fact that the officials of the order were paid large salaries, and that premiums were paid for bringing in new business. In the present case, it appears from the evidence that four officers of the defendant association receive modest salaries, from $500 to $3,000 a year, and that certain bonuses and expenses are paid for organizing new branches. The association pays no commission for bringing in new members.
After careful consideration of all the evidence we are clear that the facts of the present case bring it within the principle of the decision in Ogle v. Barron, supra, and that the defendant is a beneficial association. In discussing a similar question in Fischer v. American Legion of Honor, 168 Pa. 279, Mr. Justice Fell said (p. 285) : “There is a material and fundamental distinction between philanthropic or beneficial associations, which issue benefit certificates to their members, and life insurance companies, which was pointed out in Commonwealth v. Equitable Beneficial Association, 137 Pa. 412, and has since been recognized in Dickinson v. A. O. U. W., 159 Pa. 258, and in Lithgow v. Supreme Tent, Etc., 165 Pa. 292. It appears from the charter and by-laws that the association defendant was organized for social, moral and intellectual purposes and for the relief of sick and distressed members. Insurance is not its only nor its primary object. It limits the persons and classes.Of persons who may be named as beneficiaries to The family, orphans or dependents’ and provides- that in the event of the failure of all such persons or classes of persons the sum due shall revert to the order. The amount
In the fifth assignment of error, complaint is made of the admission in evidence, against objection, of a circular issued by J. W. Sullivan, grand secretary. The only evidence in regard to the circular was that of Sullivan himself, who testified that it was an advertisement of his own, and not of the corporation, and that he did pot have the authority of the supreme council to issue it. The circular may be admissible as tending to modify
To recapitulate, the evidence shows that the defendant is organized as a social institution, with the provision for insurance not as a means of profit, but in the exercise of a benevolent and fraternal purpose. It shows that the association is governed through a branch system with a form of initiation. It further shows that an applicant can be admitted to membership only after investigation and report by the board of trustees of the branch, and a favorable ballot by the members present at a regular meeting, and that the designation of beneficiaries is limited to relatives or dependents of the member, or to a charitable institution of which he may be an inmate. These and other characteristics shown are distinctly those of a beneficial association, and do not comport with the object, purpose, or methods of operation of an insurance company.
The first and second assignments of error are sustained, and the judgment is reversed, with a venire facias de novo.