Barlow v. Grand Lodge Ancient Order of United Workmen

Evans, J. „ 1. Insurance : mutual benefit breach of eon-tract: measure Of damages. On the question of breach of contract, the case involves precisely the same questions as are considered in the case of Tusant v. Grand Lodge Ancient Order of United Workmen of Iowa, April 4, 1918 (163 N. W. 690). The same acts and the same defendant order are involved in both suits. The plaintiff was a member of the order, and is entitled to the same relief and upon the same grounds as was awarded to the plaintiffs in the Tusant case. The trial court erred, therefore, in finding no breach of contract by the defendant. The only. question left for our consideration is whether the plaintiff is entitled to the measure of damages for which he contends. It is agreed that the plaintiff was a member of the defendant order for upwards of 30 years, and that during such membership he paid assessments and dues amounting to $998. The plaintiff asks to recover this sum, .with interest thereon, as the measure of his damages. lsTo evidence was offered in proof of damages upon any other basis. The question presented, therefore, is whether a member of a purely fraternal beneficiary society may, after many years, upon breach of the contract by the defendant, so rescind his membership and recover all payments made for assessments and dues. The defendant order is purely a mutual assessment company, levying assessments upon its members for the payment of death losses after they occur. All assessments are paid by the members for the distinct purpose of paying death losses already accrued. All of plaintiff’s assessments were paid for such purpose, and were applied in strict accordance with such purpose. The defendant was a mere trustee of the fund, and the beneficiaries of the death losses were, in each instance, the beneficial owners thereof. The plaintiff has had benefits of substantial value in his 30 years of insurance. It would be impossible to place the [1151] parlies substantially in stain quo. In view especially of the fact that the defendant was a mere trustee, acting without profit, and that its officials in all cases applied the plaintiff’s assessments to the. distinct purpose for which they were paid, we think that the amount of the assessments thus paid cannot be made the measure of plaintiff’s damage for a subsequent breach. The plaintiff has brought his suit in equity. The measure .claimed by him is clearly inequitable. Lavalle v. Societe, 17 R. I. 680 (24 Atl. 467, 16 L. R. A. 392) ; Ebert v. Mutual Reserve Fund Life Assn., (Minn.) 83 N. W. 506. Plaintiff relies upon Van Werden v. Equitable Life Assur. Soc. 99 Iowa 621, and Fort v. Iowa Legion of Honor, 146 Iowa 183. In the Van Werden case the measure of damage contended for was allowed. The defendant in that case, however, was an old line company, and was not a mere assessment company. The breach of contract occurred with reference to plaintiff’s first payment. Upon breach by the defendant, the plaintiff rescinded, and was permitted to recover all such first payment, although it included the premium of three years. The breach and the rescission occurred after two years. The .benefit received by the plaintiff, therefore, was not of great value. In the Fort case, the question presented herein was not passed on by us. The rule was applied in the trial court. No exception to such ruling was presented to us. The opinion expressly calls attention to that fact. We are not, therefore, committed to the application of such a rule to a purely mutual assessment company. The question as made in the Van Werden case was very close, and was involved in a conflict of authority. To apply the rule to a mutual assessment company would present a still greater difficulty, and we find no authority which has gone to that extent. Our holding in the Tusant case may inure to the benefit of plaintiff and may operate to give him equitable re [1152] lief by protecting bis membership and enabling him to resume his former relations to the order. That question we cannot now prejudge. This is doubtless the most equitable relief that could be devised for him, even though it might be conceded that he would be entitled to some measure of damage, even though, under this evidence, only nominal. His counsel have fully apprehended the difficulty of obtaining substantial relief in the form of damages unless they can recover the amounts paid. They have, therefore, confined their claim strictly to that measure. The plaintiff’s real objective is the reserve fund. If this were subjected to plaintiff’s call for damages, the redress thus obtained would not be taken from the wrongdoer. The defendant order holds this fund as trustee only. The„ beneficial owners thereof are members, whose relations thereto are like that of plaintiff, and who also have suffered similar wrong. Their equities are equal with that of plaintiff, and a court of equity cannot ignore them. It is not a case where equity is to be created at the tape in a race of creditors. 2. Appeal and S°orror^rermissaLS fllb’ Although we find that the trial court ewed in its finding that there was no breach °f the contract, aud erred, therefore, in the ground of its dismissal, nevertheless the dismissal itself was without error, because no proper measure of damage was proved. The finding of fact on the question of breach made in the decree below will be modified in the respect indicated, and the dismissal will be affirmed on the ground here indicated, without prejudice to future proceedings looking to other remedy. — Modified and Affirmed. All the Justices concur.