Lewine ex rel. Wolford v. Supreme Lodge, Knights of Pythias of the World

NORTONI, J.,

(after stating the facts). — There being no allegation in the answer that one assessment on the membership was insufficient to render the maximum amount of $2,000 mentioned in the certificate, this feature of the contract is eliminated from consideration, and it therefore follows that Charles. Lewine, the insured member, having committed suicide, these plaintiffs, beneficiaries, are entitled to receive either the maximum amount of $2,000 mentioned in the certificate, or the lesser amount provided for in the subsequent by-law on the subject of suicide. This lesser amount is averred to be $853.15. The record therefore presents but one question calling for the opinion of the court, and that is, can the original contract of insurance and the indemnity therein provided be thus modified by the adoption and retrospective operation of a subsequent by-law on suicide, without the express assent of the insured member, or did he consent to such modification • by the language employed in his contract of membership and insurance? The learned counsel for appellant point us to the language of his application wherein he agreed that he would “be governed” and his contract should “be controlled” by all laws, etc., then in force or which might thereafter be enacted or submit to the penalties therein contained, and argue that this agreement on his part is parcel of the consideration upon which the certificate was issued to him, wherein, by his acceptance, he agreed to “a full compliance with all thelawsgoverningtherank then in force or that might thereafter be enacted,” and it is insisted that from this it is manifest Charles Lewine agreed in advance that his contract might be thus modified and altered. Our attention in this connection is especially invited to numerous decisions of the Supreme and Appellate Courts of Illinois where, in suits against this identical defendant, on the identical language here involved, the member was held to have agreed in advance to the future material modification of his insur *553 anee contract by such subsequent enactments. These cases are Sup. Lodge K. of P. v. Trebbe, 179 Ill. 348 ; Sup. Lodge K. of P. v. Kutscher, 179 Ill. 340 ; Sup. Lodge K. of P. v. Clarke, 88 Ill. App. 600 , and we are cited as well to the case of Morton v. Royal Tribe of Joseph, 93 Mo. App. 68 , wherein it seems that this court so held. Whatever the state of the adjudicated law on this subject may be elsewhere, the matter must be determined here by the proper application of sound principle and a firm adherence to the doctrine of this court. Now, if there be any proposition settled in the law with respect to benefit societies^ it is that they, and the respective rights of the parties constituting the same and dealing therewith, arise entirely out of contract, and are to be ascertained and measured by .the principles of contract law. In the first instance, the entire scheme and scope of their organization, as well as the contemplated future conduct and operation of the society, is conceived in and brought forth from contractual relations imposing certain valid obligations and reciprocal duties upon the association on the one part and the several members thereof on the other. The charter of such associations, or its equivalent, the statute under which they are organized, being the fountain head and source of their authority, is, as a matter of course, always considered parcel of the arrangement between the parties, and in those cases where the certificate and application refer to each other in some apt and appropriate manner, as in this case, refer to the constitution and by-laws, the reasonable provisions of such constitution and by-laws in force at the time, and such reasonable regulations subsequently provided in lawful maner, as are clearly contemplated by the parties, as manifested by express agreement, or by proper words employed evidencing such an intention,- are adjudged to be the contract between the parties. Generally speaking, the cases with unanimity, either so decide or proceed in affirmance of *554 this fundamental proposition. [Laker v. Fraternal Assn., 95 Mo. App. 553 , 75 S. W. 705 ; Richmond v. Sup. Lodge, 100 Mo. App. 8 -19, 71 S. W. 736 ; Grand Lodge v. Sater, 44 Mo. App. 445 ; Supreme Council v. Curd, 111 Ill. 284 ; State ex rel. v. Temperance Ben. Assn., 42 Mo. App. 455 ; Union Ben. Society v. Martin, 23 Ky. L. R. 2296; Bacon on Benefit Societies (3 Ed.), secs. 184-161-181; 3 Am. and Eng. Ency. Law (2 Ed.), 1081.] And while this is true, certificates issued by such fraternal associations providing for indemnity upon the death of the member, are essentially contracts for insurance, and as such, are subject to the same rules of law which govern and control the construction and interpretation of contracts generally. Such contracts create and establish obligations as others do, and are immune from future impairment, modification or change identically as other contracts are, without the assent of the parties in interest. [State v. Ben. Ass’n, 72 Mo, 146; Commonwealth v. Weatherby, 105 Mass. 149 ; Morton v. Sup. Council, 100 Mo. App. 76 , 73 S. W. 259 .] Now, it is abundantly settled, both upon principle and authority, and in truth all the authorities agree to the proposition, that inasmuch as the beneficiary is not a party to the contract and is therefore always subject to the power of the insured during his life to change or re-designate the object of his bounty, that such beneficiary therefore has no vested right in the fund prior to the happening of the contingency upon which the benefit is to accrue; or in other words, that the beneficiary has but an expectancy, subject to the right of the member insured to terminate it if he sees fit so to do, [Benefit Society v. Bunch, 109 Mo. 560 ; Sup. Council v. Kacer, 96 Mo. App. 93 , 69 S. W. 671 ; 1 Bacon on Benefit Societies (3 Ed.), sec. 237; Niblack on Benefit Societies (2 Ed.), 212-202.] This proposition is not true, however, with respect to the insured. Indeed, while the insured member has no vested right in the fund, such as would become assets of *555 Ms estate after his decease (Bacon on Benefit Societies [8 Ed.], 237), he has clearly a vested right in the contract with the association whereby he is given the power to designate who shall receive, and the amount that shall be received by those whom he designates as the recipients of his bounty, and this is considered as in the nature of a property right. [Hysinger v. Sup. Lodge, 42 Mo. App. 627 -635; Froelich v. Mut. Ben. Assn., 93 Mo. App. 383 ; Lysaght v. Stonemasons, etc., Assn., 55 Mo. App. 531 ; Wist v. Grand Lodge, 22 Or. 271 ; Hogan v. Pacific Endowment League, 99 Calif. 348; Morrison v. Wis. Odd Fellows, 59 Wis. 102 ; Niblack on Benefit Societies (2 Ed.), 213.] On this subject, Mr. Bacon, in his valuable work, says as follows:

“All of the authorities agree that the rights of the members of benefit societies in the sums agreed to be paid at death is simply the power to appoint the beneficiary and that the constitution, or charter, and the by-laws are the foundation and source of such power. The cases must not, however, be understood to hold that theAnember of a benefit society has not a property right in the contract of membership', under which he has power to designate a recipient of the benefit to be paid, because of such membership and under the contract. The right of the member in this contract is a valuable one, which the courts will at all times recognize and protect, although strictly speaking, such member has no property interest in the benefit paid, or subject of the power. The membership, which includes the right to pay the agreed consideration and to appoint a person to take the benefit, must be regarded as a species of property and is to be distinguished from the benefit, or sum to be paid, itself in which the member has no property. This principle has been clearly recognized in later cases.”

Having thus ascertained that the contract involved is one for insurance in which the member has vested rights, it then becomes important to ascertain whether *556 or not this contract could he substantially altered or its obligation abridged by the future law on suicide. Now, it is well settled and it is the doctrine of this court that such contracts, in so far as the insurance feature is concerned, cannot be altered or modified in substance without the express assent of the member. This has been repeatedly held in express terms and other cases have proceeded in affirmance of the proposition. [Hysinger v. Sup. Lodge, 42 Mo. App. 627 ; Grand Lodge v. Sater, 44 Mo. App. 445 ; Sackberger v. Grand Lodge, 73 Mo. App. 38 -42; Smith v. Sup. Lodge, 83 Mo. App. 512 ; Morton v. Sup. Council, 100 Mo. App. 76 , 73 S. W. 259 ; Campbell v. Amer. Ben. Club, 100 Mo. App. 249 , 73 S. W. 342 ; Sisson v. Sup. Court of Honor, 104 Mo. App. 54 , 78 S. W. 297 ; Pearson v. Indemnity Co., 114 Mo. App. 283 , 89 S. W. 588 .] It must be conceded, however, that- this was a matter within the power of the parties to determine by contract, and no one would question for a moment the right of the parties when entering’ into the contract here involved, to have stipulated in plain and express terms to the effect that the association reserved to itself power to provide by subsequent laws, a reduction of the insurance in event of suicide, and had such express stipulation been inserted in the contract at the time, it would operate to have substantially modified the contract with the express assent of the member, and would therefore stand and be enforced as a valid provision of the contract of insurance. But no such express stipulation was incorporated. The argument advanced is that even though such was not provided in express words, the language employed on that question was of such a character as to signify that the member contracted in advance to abide by the result of such subsequent law. It is true Lewine agreed that, first, “I will be governed” and second, “this contract shall be controlled by all laws” in force or hereafter enacted. There is no doubt that a fair interpretaton of this agree *557 ment reveals that it was two-fold. That the agreement should be two-fold is natural indeed, for the members of these societies stand in a dual relation to the society; one relation is that of a member, the same as any other member, whether insured or not, regard being had to the social features of the organizations; and the second is that of an insured person having a valuable contract therewith whereby an indemnity is guaranteed to his designated beneficiaries. This then being the situation of the parties, it is clear that the agreement, “I will be governed,” bore reference to such laws as were then in force, or future laws as might be provided tending to regulate his conduct as a member, and the internal affairs of its lodge system, all of which were essentially within the contemplation of the parties; while the second agreement to the effect that “this contract shall be controlled” by present and future laws, bore reference only to such present and future laws as were in aid and in furtherance of the essentia] elements of indemnity vouchsafed in his contract for insurance, for it is reaonable indeed that both the member and the society should contemplate and intend, when looking into the future, that the society should reserve some rights with respect to bringing about such reasonable changes in aid of the provisions of the contract as experience might dictate were necessary, and it does not seem reasonable that the agreement bore reference, to such subsequent laws which instead of aiding the beneficial purposes of the organization, would modify or entirely abrogate such purpose by destroying the insurance for which the member had contracted and paid. As said before, the matter being one within the power of the parties to fix by contract, the case then, as presented, must be determined by a fair and reasonable construction or interpretation of the language employed, influenced by the principle so aptly expressed in the phrase that “forfeitures are not favored in the law.” Now, it must be understood in all *558 of these cases, that the principal and moving inducement for membership and payment of the dues in this and other like societies, is the insurance vouchsafed in the contract. Thus the contract in this respect, in its nature being fraught with vested rights of the insured member, this court has always treated it with a degree of sanctity usually accorded the more sacred rights of property. In affirmance of this principle, it has held that the contract on the part of the member to “comply” with future laws, did not authorize the subsequent modification of the contract by a suicide law, and Judge Goode pointed out therein that the true meaning of the word “'comply” in that respect was to require the member to so regulate his conduct as to conform to such bylaws, as were provided for the regulation of his duties as a member. [Morton v. Supreme Lodge, 100 Mo. App. 76 , 73 S. W. 176 .] And so it has held that the contract to conform to and abide by, or submit to the penalties, of future by-laws, did not authorize the subsequent modification of the contract of insurance by an after-enacted law reducing the amount to be paid in event of suicide; that such was an unreasonable exercise of the power reserved under the language quoted, and that to hold such subsequent law valid would be an unreasonable interpretation of the language employed in the contract. [Smith v. Sup. Lodge, 83 Mo. App. 512 ; see, also, Brown v. Sup. Lodge, 83 Mo. App. 633 -641.] In truth, in every instance where the matter has been squarely presented to this court, this doctrine has been affirmed, and it has been adjudicated that the agreement of the member to “comply with,” “abide by,” “conform to,” etc., and words of like import, signify only a willingness on the part of the member to comply with, abide by, etc., such future laws of the order as are provided for the regulation of the internal government of the society and the conduct of the members generally, and that from the employment of such language, there is no implication *559 that the member contemplated or intended to authorize the association to reduce or abridge the insurance vouchsafed in the contract. [See, also, on this question, Campbell v. Amer. Ben. Club, 100 Mo. App. 249 , 73 S. W. 342 ; Sisson v. Sup. Court of Honor, 104 Mo. App. 54 , 78 S. W. 297 ; Pearson v. Indemnity Co., 114 Mo. App. 283 , 89 S. W. 588 ; Hysinger v. Sup. Lodge, 42 Mo. App. 629 ; Grand Lodge v. Sater, 44 Mo. App. 445 ; Sackberger v. Grand Lodge, 73 Mo. App. 38 .] The fundamental notion pervading the cases supra is that, in view of the important subject-matter involved, the insurance provided for in the contract, it is both an unreasonable exercise of the power reserved and an unreasonable interpretation of the contract, to place on the language therein employed a construction holding that the member had in contemplation and intended thereby to authorize the association to strike down and abrogate the substantial provisions of indemnity therein contained by subsequent law of the character mentioned. Besides Smith v. Sup. Lodge, 83 Mo. App. 512 , and other cases of this court above cited, see also the following authorities from other jurisdictions, all of which assert and sustain the same doctrine with convincing logic: Knights Templar, etc., Life Indemnity Co. v. Jarman, 104 Fed. 638 ; Newhall v. Sup. Council (Mass.), 63 N. E. 1 ; Wist v. Grand Lodge, 22 Ore. 271 ; Gaut v. Sup. Council (Tenn.), 64 S. W. 1070 ; Sup. Council v. Getz, 112 Fed. 119 ; Hale v. Eq. Aid Union, 168 Pa. St. 377; Parish v. N. Y. Produce Exchange, 169 N. Y. 34 ; Pokrefky v. Assn., 121 Mich. 456 ; Langan v. Amer. Legion, 70 N. Y. Supp. 663 ; Weiler v. Eq. Aid Union, 36 N. Y. Supp. 734 ; Bornstein v. Dist. Grand Lodge, 84 Pac. (Cal. App.) 271; Starling v. Sup. Council, 66 N. W. 340 ; Evans v. Southern Tier, 182 N. Y. 453 ; Beach v. Sup. Tent, 177 N. Y. 100 ; O’Neill v. Legion of Honor, 70 N. J. L. 410; Wuerfler v. Trustees, etc., 116 Wis. 19 ; Strauss v. Mut. Reserve Assn. 128 N. C. 465 ; s. c., 126 N. C. 977 ; *560 Bragaw v. Sup. Lodge, 38 S. E. 905 ; Ins. Co. v. Connor, 17 Pa. St. 137; Becker v. Farmers Mut. Assn., 48 Mich. 610 ; Taylor v. Modern Woodmen, 5 L. R. A. (n. s.) 283.

In support of this conclusion it is well to' notice the question from principle, therefore let us examine the matter precisely as it is presented. In so doing, we first determine precisely what the society seeks in these cases, and that is, the society seeks a forfeiture of the member’s rights and repudiation of part of all of the insurance contract on the ground that the member has failed to abide by or comply with or conform to a future law by which it maintains he has agreed in advance to he bound; or in other words, he has violated a subsequent law which it is alleged he has agreed in advance shall determine his rights, and the case viewed from this standpoint, renders it manifest that the judgment of the court must be influenced and controlled by that principle which governs and controls adjudications in common-law tribunals always when vested rights are sought to be forfeited. Now, there is a principle which is always pertinent where forfeitures are sought, and it is the rule that forfeitures are not favored in the .law, and in order to work a forfeiture, it must clearly appear, first, that such was the result the party against whose rights the forfeiture is sought to be invoked, had in contemplation and intended when entering into the contract (3 Am. and Eng. Ency. Law [2 Ed.], 1086; Elliott v. Grand Lodge, 2 Kan. App. 430 ; Medical, etc., Soc. v. Weatherby, 75 Ala. 248 ; Schrick v. Gegenseitiger, etc., Fond, 44 Wis. 369 ; Ballon v. Gill, 50 Wis. 614 ; Miner v. Mich. Ben. Assn., 63 Mich. 338 ; Wiggin v. K. of P., 31 Fed. 122 ); and, second, when a forfeiture is sought on a doubtful provision, the language must be construed strictly against the insurer and in favor of the insured; or, in other words, in such doubtful cases, the doubt shall be resolved in aid of the contract and so as to avoid. *561 a forfeiture (Rena v. Sup. Lodge, 83 Mo. App. 442 ; Northey v. Bankers Life Assn., 110 Cal. 547 ). Now, applying the familiar principles stated to the interpretation of the language employed in the contract before us, we must hold, first, that it is not clear and pointed to the effect that the insurance feature of the contract might be either abridged or annihilated by the subsequent law mentioned, and no one will, or could for a. moment dispute this proposition of fact. This being true, the language then is of that second class mentioned; that is, not clear to the effect that Lewine contemplated and intended such a result. Not being clear to the effect stated, it is doubtful, and as such, must receive a construction that will obviate the forfeiture, if such construction be reasonable and. in accord with the benevolent features of the contract; or, in other words, the doubt should be resolved in aid and in support of the contract against the insurer and in favor of the insured. So interpreted, it is quite beyond peradventure the agreement that “this contract shall be controlled” by subsequent laws, can have no greater significance than that Lewine contemplated and intended his contract should be controlled by such future laws as were enacted for the purpose of aiding and effectuating the insurance feature which was in keeping with its benevolent purposes. Any other construction, in the light of the principle stated, would be indeed both unreasonable and unjust, and lead to absurd results, each and all of which interpretations are condemned by the cardinal canons of construction. There is a class of cases, however, quite contrary to the doctrine here asserted. They declare subsequent laws valid and binding if reasonable even though they alter, modify, and in some cases, totally destroy or abrogate the indemnity feature of the contract, notwithstanding such laws have been enacted under the most general agreements con *562 tained in the application or certificate or a power reserved in the by-laws in force at the date the contract was entered into; for instance, contracts to comply with future laws, or to' conform to future laws, or to abide by future laAvs, etc., are frequently adjudicated upon the broad proposition that the assured had agreed thereto in advance to authorize the material and substantial modifica•’tion, and in some instances, the total abrogation of all rights of the insured by subsequent law on suicide, and in some other instances. Among this class of cases, are tAvo at least Ave have in mind (Stohr v. San. F. Musical Fund Soc., 82 Cal. 557 , and Pain v. Society of St. Jean [Mass.], 52 N. E. 502 ), which have penetrated the wilderness and extended the doctrine to the unreasonable, if not the ridiculous extent, of holding that even after the member is stricken and had been actually drawing-sick benefits for Aveeks, his right to such benefits could be modified and materially reduced under the most general agreement in his contract of membership' to be governed by future laws. In the class of cases under consideration, the only limitation noticed by the courts is that the subsequent Iuav itself shall be reasonable. The following cases announce the doctrine thus referred to: Gilmore v. K. of C., 58 Atl. (Conn.), 223; State ex rel., etc., v. Camden Lodge A. O. U. W. (N. Y.), 64 Atl. 93 ; Hughes v. Wis. Odd Fellows (Wis.), 73 N. W. 1015 ; Eversberg v. Maccabees (Tex. Civ. App.), 77 S. W. 246 ; Chambers v. Sup. Lodge K. of M., 200 Pa. St. 244; Sup. Tent v. Hammers, 81 Ill. 560 ; Sup. Tent K. of P. v. La-Malta, 95 Tenn. 157 ; Dornes v. Sup. Lodge, 75 Miss. 466 ; Daughtry v. K. of P., 48 La. 1203 ; Sup. Tent v. Stensland, 105 Ill. App. 267 ; Schmidt v. Sup. Tent, 97 Wis. 528 ; Doidge v. Dominion Council, 4 Ont. L. R. 423; Hall v. Western Travelers Assn., 96 N. W. (Neb.) 170; Miller v. Nat. Council, 76 Pac. (Kan.) 830; Ross v. Modern Brotherhood, 120 Iowa 692 ; Pain v. Society of St. Jean (Mass.), 52 N. E. 502 ; Evans v. Southern *563 Tier, 76 App. Div. N. Y. 151; Loefler v. Modern Woodmen, 100 Wis. 79 ; Sup. Com. v. Ainsworth, 71 Ala. 436 ; Fullenwider v. Royal League, 180 Ill. 621 ; Lange v. Royal Highlanders, 106 N. W. (Neb.) 224; Sup. Lodge v. Trebbe, 179 Ill. 348 ; Sup. Lodge v. Kutscher, 179 Ill. 340 ; Sup. Lodge v. Clark, 88 Ill. App. 600 ; Sheppard v. Bankers Union (Neb.), 108 N. W. 188 ; Union Ben. Society v. Martin, 23 Ky. L. R. 2276; Messer v. Grand Lodge, 180 Mass. 321 ; Stohr v. San. F., etc., Soc., 82 Cal. 557 . Learned counsel for defendant have cited us to those cases and argue for their doctrine in a manner to invite the assent of this court thereto. We have given each and all of them careful and attentive consideration with a resulting positive conviction to the effect that they are unsound in principle, and we are inclined rather to dispute than follow their authority. While we favor freedom of contract in the very largest measure, and adhere with firmness to the rule that the parties may, upon entering into contracts of insurance, provide by competent and pointed stipulation, for the partial or even total destruction of the insurance provided, on a named contingency to be the subject of subsequent laws, we decline to subscribe to the doctrine that a mere general agreement, which is susceptible to divers constructions, is sufficient to signify that the member contemplated and intended thereby to agree in advance that either a portion or the entire beneficial interest in the fund sought to be provided for loved ones, should be stricken doAvn and annihilated by subsequently enacted law. Now, in our opinion, the manifest unsoundness of the doctrine announced by the cases last cited, consists in the total failure to observe and apply the important and controlling principle which should always guide and direct a court Avhen dealing with forfeitures, and in proceeding to forfeit the right of the insured by enforcing the subsequent by-laws enacted under the most general provisions to that effect contained in the appli *564 cation or certificate. Certainly when interpreting doubtful language in those cases where a forfeiture is invoked, the courts should adhere with firmness to that principle of adjudication, the purpose of which is to contribute to the security of vested rights, and construe doubtful words in aid of the insurance contract and thus aid and effectuate the purposes of benevolence declared in the charter, rather than in aid of the overthrow and total annihilation of both the fundamental conception of the fraternity and the indemnity features sought and paid for.

The subsequent law in this case, by its provisions, applies to members heretofore or hereafter admitted to the order. This retrospective language cannot aid the case for the defendant, for to give the law such retro>spective operation in this case and thus modify the essential indemnity feature of the contract, under the language of the agreement found in the application and certificate, would be unreasonable indeed. What has been said applies of course only to the retrospective operation of such laws, for we know of no good reason why such a lav/ should not have a valid and binding prospective operation on such contracts as are made after its enactment of which it, of course, becomes parcel.

In conclusion, we beg to suggest, does it appear reasonable that Charles Levine, when agreeing that his contract should be controlled by subsequent laws, then had in mind, contemplated and intended that the society might, under this agreement, exercise the right to- repudiate either a part or all of the insurance contract in event he committed suicide, thus destroying what he and every other prudent man, exercising his ordinary senses would deem to be secure thereby? We think not. We feel doubly assured of the soundness of the doctrine of this court when we note the opinion of such learned and eminent jurists to the same effect as the lamented *565 Judge Thayer, in tbe Jarman case, 104 Fed. 638 , and Judge, now Mr. Justice Holmes of the Supreme Court of tbe United States in tbe Newhall case (Mass.), 63 N. E. 1 , and Chief Justice Parker in Parish v. N. Y. Produce Exchange, 169 N. Y. 34 , and Webber v. Sup. Tent of Maccabees, 172 N. Y. 490 .

Now it seems that in tbe case of Morton y. Royal Tribe of Joseph, 93 Mo. App. 78 , tbe real matter pressed upon tbe court for decision was whether or not tbe order was a fraternal beneficial association and as sucb, exempt from tbe general insurance laws of tbe State. Tbe validity of tbe suicide law involved seems not to have been brought forward with much vigor at tbe argument and was therefore not dwelt upon in tbe opinion. So much of that case as bears a construction contrary to tbe views herein expressed, should be disapproved.

Finding no reversible error in the judgment of tbe circuit court, it will be affirmed. It is so ordered.

Bland, P. J., and Goode, J., concur.