House v. Modern Woodmen

Evans, J. It appears from the petition that the deceased, Nathaniel G. House, became a member of the defendant association in May, 1905, and that a benefit certificate w,as issued to him, the effect of which was to insure his life to the extent of $1,000, subject to certain specified conditions. By the terms of the benefit certificate the defendant company reserved the right to amend "section 14 of the by-laws” and to make such amendments -applicable to the certificate in question. Section 14 contained a list of hazardous occupations, and the certificate issued to the deceased exempted the society from-liability for death "by accident directly traceable to employment in such hazardous occupation or from any disease directly traceable thereto.” [609] It appears from the answer that in July, 1905, the defendant society did amend section 14 so as to include therein, as a hazardous occupation, that of an electric “lineman,” and so as to exempt the society from liability for death by accident traceable to such employment. The deceased was not at that time an electric lineman, nor was he such for many years thereafter. He entered such occupation on November 20, 1911. This was the day of his death, and such death was “by accident directly traceable to such employment. ” By the demurrer the plaintiff challenged the right of the defendant society to make the amendment applicable to the prior certificate issued to the deceased. The substance of the contention in support of the demurrer was and is that to apply the amendment to the prior certificate would be to impair the obligation of the contract and to interfere with the vested right of the certificate holder, and that such amendment was for such reason unreasonable. The point thus raised was squarely passed upon by this court in Norton v. Catholic Order of Foresters, 138 Iowa, 464. The amendment involved in the cited ease added to the prohibited list the occupation of switchman in railroad yards, and rendered all persons engaged in such occupation ineligible to membership. It was held in that case that the amendment was reasonable, and therefore valid; the right of amendment having been reserved in the certificate issued. In the case before us the eligibility of the certificate holder was not affected by the amendment. Notwithstanding such amendment, his life was still insured, except as against accident directly traceable to the prohibited employment; If, therefore, the amendment involved in the Norton case was reasonable, as applied to the previous certificate holder, still more reasonable is the amendment involved in the case at bar. It must be said, therefore, that the Norton ease is decisive of the case before us. Only its overruling could save a cause of action to the plaintiff upon the certificate sued on. Previous to the Norton case was Ross v. Brotherhood of America, 120 Iowa, [610] 692, where an amendment to the defendant’s by-laws was sustained as reasonable and as applicable to a benefit certificate issued prior to the amendment; the defendant Brotherhood having reserved the right of amendment as in the present case. Both of these cases were expressly followed in Ury v. Modern Woodmen, 149 Iowa, 706. These cases were apparently overlooked in the court below, and have not been referred to in appellee’s brief filed here. Appellee cites for our consideration a number of our own cases (Hobbs v. Iowa M. B. Association, 82 Iowa, 107, and similar cases), wherein there was no reservation of the right to amend constitution and by-laws, and wherein we held that the rights and liabilities of the certificate holder were determined by the terms of the certificate and of the constitution and by-laws as they were at the time of its issuance. Manifestly these authorities can have no application to a case wherein the right of amendment was expressly reserved in the contract of insurance. Appellee places some reliance upon the case of Fort v. Legion of Honor, 146 Iowa, 183, and Elliott v. Home Mutual Hail Association, 140 Iowa, 431. These cases furnish no support to appellee’s contention. This statement ought to be qualified, perhaps, to this extent: That there are authorities from other jurisdictions which support the appellee’s contention. In the course of the various discussions in the Fort and Elliott cases, several of these authorities from other states are cited and quoted, but without reference to the particular question now before us. In the Fort case various amendments- were involved which had the effect to materially reduce the amount of the insurance of the insured, and such amendments were held to be unreasonable and beyond the power of the defendant company. In the Elliott case the validity of the amendment was sustained, and the insured was held to have forfeited his insurance by his failure to comply with such amendment. As between the decisions in different states, the question before us is involved in irreconcilable conflict. One line of [611] decisions denies the right of such an amendment as against previous insurance; the other recognizes the right of the defendant society to reserve the right of reasonable amendment. There is something to be plausibly said in favor of either view. In support of the rule heretofore approved by us in the cited cases, it is to be said that it makes for equality of conditions as between the entire membership of the insuring association. This reason has special force as applied to mutual and fraternal associations, wherein the same membership comprises the insurer and the insured, and wherein cost and benefit run concurrently. As far as appears in^the present case, House, as the insured, had the full benefit of the amendment in question, and thereby had exemption from any assessment and liability for the death of any other member, resulting from the prohibited employment. It is not inequitable that the benefits arising to the beneficiary under his certificate should respond to the same limitations and should be determined under the operation of the same rule that applied to the assessments against the certificate holder as a member of the insuring association. In the case before us, it is to be noted that, when the amendment in question was adopted, the deceased was not engaged in the prohibited occupation. No question, therefore, of sudden or arbitrary forfeiture without notice is involved. If, at the time of the adoption of such amendment, the deceased had been then engaged in the employment then added to the prohibited list, a somewhat different question would be presented. This distinction was noted in the Norton case, and opinion was reserved thereon. Following our previous cases as above cited, the judgment of the trial court must be reversed. — Reversed and Remanded. Ladd, C. J., and Deemer, Gaynor, Preston, and With-row, JJ., concur.