Leech v. Order of Railroad Telegraphers

BLAND, P. J. (after stating- the facts). — It is stated in the agreed stipulation of facts, that there was due from Leech, the deceased member, on January 1, 1906, $4.50, to the Order of Railroad Telegraphers and that said sum was not paid at that time, or at any time thereafter, by said Leech or by any one for him. Section 2, article 15, of the constitution of the Order, provides that the dues of each member shall not be less than eight dollars per annum, payable semiannually. Section 2, article 21, provides that each member shall be assessed fifty cents semiannually, payable in advance, and that any member “failing or declining to pay his assessment shall stand suspended ánd shall be reported in all things the same as for the non-payment of dues.”' Section 26, article 22, of the General Statutes, provides: “A member refusing or neglecting to pay his dues sis months in advance in full is not in good standing sixty days after the first day of the semi-annual period for which the amount is due. “A member not in good standing is not entitled to vote in his division or on questions before the division, and the local board of adjustment shall not exercise itself in his behalf in case of grievance. “When a member becomes delinquent in his dues for a period of six months, his name shall be dropped from the roll of the division without further notice.” Section 20 of the same article reads as follows: • “The secretary shall immediately notify the grand secretary and treasurer of all suspensions and expulsions, giving dates and causes.” Article 5, Laws of the Mutual Benefit Department, reads as follows: “Every person applying for membership in the Order of Railroad Telegraphers shall present with his — 15 — petition for membership an application for membership in the Mutual Benefit Department, properly filled out, together with the fee therefor. At the time of his initiation, the application for membership in the Mutual Benefit Department shall he forwarded by him to the secretary and treasurer. If such application for insurance is rejected, such rejection shall in no way affect his membership in the Order. Forfeiture of membership in the Mutual Benefit Department shall cause the member so forfeiting to stand suspended from the order without further notice until reinstated in the Mutual Benefit Department. “Members of the order whose dues and assessments are not fully paid within sixty days from the beginning^ of the semiannual dues periods shall forfeit their membership in the Mutual Benefit Department without further notice. “Suspensions and reinstatements under this section will be made by the secretary and treasurer,, and will he reported by him to the division secretary. No member reported by the secretary and treasurer as suspended under this law shall be permitted to participate in any of the privileges of membership until he has been reported as reinstated by the secretary and treasurer.” To quote from defendant’s brief, “The question presented in this case for decision is: ■ Did Leech, deceased, cease to be a member of The Order of Railroad Telegraphers and of the Mutual Benefit Department of said order, and thus render his contract with the Mutual Benefit Department (upon which this action is based) null and void on or about March 1, 1906 (or at any time prior to his death, which occurred June 2, 1906), because of nonpayment of the dues, amounting to $4.50, to The Order of Railroad Telegraphers, which, by virtue of the law of the order, were due and payable on January 1, 1906? Defendant’s position is that failure in this respect — 16 — (■which failure is admitted by plaintiff), ipso facto, forfeited. Leech’s membership in The Order of Railroad Telegraphers, and in the Mutual Benefit Department of •said order, within sixty days after said dues were pay.able, namely, on or about March 1, 1906, by virtue of .article 5, of the laws of the Mutual Benefit Department, .and that the retention by the Mutual Benefit Department of the $2.40, the excess of assessments does not constitute a waiver of such forfeiture, nor estop the Mutual Benefit Department from setting up the defense <of forfeiture in this action!’ The constitution and laws of the order, by the terms -of the certificate of insurance, are made a part thereof, and therefore form a part of the contract of insurance. When this is so, it is well settled law, that orders of the character of the Order of Railroad Telegraphers may provide for forfeiture ipso' facto for the non-payment of dues and assessments of the member. [Lavin v. Grand Lodge A. O. U. W., 104 Mo. App. 1. c. 17, 78 S. W. 325, and cases cited.] Article five (quoted above) declares for forfeiture in the Mutual Benefit Department, if the member does not pay his dues and assessments in sixty days from the time they become due; it further provides that suspension and reinstatements will be made by the secretary and treasurer and will be reported by him to the division secretary. It is admitted that the secretary and treasurer never found that Leech was suspended, or reported him as suspended to the division secretary for non-payment of dues and assessments, or for any other cause. The latter clause of this article, treating of suspensions and reinstatements of members, should be construed in connection with section 26, article 22, of the laws of the order, which provides that a member refusing, or neglecting, to pay his dues six months in advance is not in good standing sixty days after the first day of the semiannual period and is not entitled to vote in his division. Read together, the — 17 — last clause of article 5, and section 26, article 2, mean that if a member forfeits his membership in the Mutual Benefit Department for non-payment of dues and assessments, and the forfeiture is reported by the secretary and treasurer to the 'division secretary, the member is not in good standing and is not entitled to vote in his division until his standing in the order is restored, and do not mean, as contended by plaintiff’s counsel, that the member’s certificate of insurance cannot be forfeited for non-payment of dues and assessments until the forfeiture is made or declared by the secretary and treasurer of the Mutual Benefit Department and reported by him to the secretary of the division of the order to which the member belongs; and we think article 5 is self-executing. Forfeitures are not favorites of the law and contracts providing for them should be strictly construed, and certificates of insurance in fraternal beneficiary associations are not exempt from the general rule. [McGannon v. Insurance Co., 171 Mo. 143, 71 S. W. 160; Columbia P. S. Co. v. Fidelity & C. Co., 104 Mo. App. 1. c. 167, 78 S. W. 320; Foglesong v. Modern Brotherhood of America, 121 Mo. App. 553, 97 S. W. 240; Renn v. Supreme Lodge K. of P., 83 Mo. App. 442.] Reading article 5, supra, the law requiring the payment of monthly assessments, and the law requiring the payment of semiannual dues into the certificate of insurance, on a strict, construction, two things must co-exist to work a forfeiture of the certificate, namely, nonpayment of one or more monthly assessments and a failure to pay semiannual dues within sixty days from the beginning of the semiannual dues period, — in Leech’s case sixty days from January first of each year. [Hyatt v. Legal Protective Assn., 106 Mo. App. 610; Masi v. Congraga San Donato Di Mutou Succorso, 40 N. Y. Supp. 667; Elliot v. Grand Lodge, 2 Kan. App. 430.] It is admitted that Leech was not delinquent in the — 18 — payment of bis monthly assessments, and for this reason we do not think his certificate was forfeited. We also think the order, through the secretary and treasurer of the Mutual Benefit Department, waived the forfeiture clause of article 5. Prom the-agreed statement of facts it appears that the sum of $1.20, of the $3.60 paid by Leech on February 12, 1906, was due on his assessments for the months of January and February, 1906, and that the balance was retained by the secretary and treasurer until tendered by the answer. The assessments were payable monthly in advance and $3.60 was credited to Leech as payment of six months assessments in advance. But if his certificate was forfeited on March 1, 1906, as contended by defendant’s counsel, the sum of $2.40 of the amount tendered should have been returned to him at that time. If there was no forfeiture, then Leech had overpaid his monthly assessments for six months by ninety cents and this amount was due him at the time of his death, unless it should be credited to him on his dues. As stated above, the non-payment of dues and assessments, under the laws of the order, operated to forfeit a benefit certificate and put the member in bad standing with the order, but to bring about the latter result, the delinquencies had to be reported to the secretary of the delinquent’s division. This was not done in Leech’s case; on the contrary the secretary and treasurer retained the money paid to him by Leech, which was not due on any assessment. Why did he retain it and why did he not report Leech’s delinquency to the secretary of his division? His action in retaining the money not due and his failure to report the non-payment of the semiannual assessment of $4.50 can be reconciled upon no other theory than that he did not intend to take advantage of the delinquency to forfeit Leech’s benefit certificate and put him in bad standing with the order; if this is so, then there was an intentional aban — 19 — donment by tbe secretary and treasurer of the right of forfeiture and of the right to put Leech in bad standing with the order; in other words, the secretary and treasurer waived the enforcement of the provisions of article 5, and of section 26, article 2, of the laws of the order and of its Mutual Benefit Department. [Reed v. Bankers Union, 121 Mo. App. 1. c. 426, 99 S. W. 55, and cases cited. See also Riley v. Insurance Co., 117 Mo. App. 1. c. 285, 92 S. W. 1147; Polk v. Western Assurance Co., 114 Mo. App. 1. e. 519, 90 S. W. 397; Edmond v. Modern Woodmen of America, 102 S. W. 601.] And it was too late, after Leech was dead and suit was brought upon the certificate, for defendant to back track by tendering the money he had retained. [Andrus v. Insurance Assn., 168 Mo. 151, 67 S. W. 582.] The secretary and treasurer of the Mutual Benefit Department did not object to receiving and retaining money not yet due on assessment, and if he desired to forfeit the certificate of insurance and place Leech in bad standing with the order, he should have acted during Leech’s lifetime by returning the money not due; and it is presumed, that if he thought or found the certificate was forfeited, he would have returned the $2.40 of the money in his hands on the date the certificate became forfeited, or immediately thereafter. By retaining the money, we think defendant is estopped from making the defense of forfeiture. [Thompson v. Insurance Co., 169 Mo. 12, 68 S. W. 889,] But it is contended by defendant that the secretary and treasurer of the Mutual Benefit Department had no authority to set aside or waive the enforcement of article 5. Article 6 provides: “The officers of this department shall consist of an insurance committee, a president and a secretary and treasurer. The insurance committee, which shall be the board of directors, shall be elected by the grand division of 'the order. The president of the order shall be, ex-officio, the president; the grand secretary and treasurer — 20 — of the order shall be, ex-officio, the secretary and treasurer.” Article 9 provides: “The secretary and treasurer shall keep a true record of all the business of the department, a register of the members, with the number and date of each certificate issued; receive and hold in trust all funds of the department, and for each approved claim he shall as soon as possible pay to the proper person or persons such amount as may be realized from an assessment levied for the purpose of paying the claim. Provided, the amount paid shall in no case exceed the amount for which the member was insured. He shall submit á correct report biennially, or oftener, if required by the insurance committee, of business transacted by him, number of members and the condition of the department, and exhibit proper vouchers and receipts for all expenditures. His books shall at all times be subject to the inspection of the insurance committee or any person appointed by them.” Under the latter article, the secretary and treasurer is the working officer of Mutual Benefit Department, its business manager and chief officer, and as neither the certificate nor laws of the order put any limitation on his power to waive strict compliance with the laws of the ord er, in respect to the payment of dues and assessments, we think a waiver is within the apparent scope of his authority. [Reed v. Bankers Union, supra.] The case does not fall within the doctrine of the cases of Ellerbe v. Faust, 119 Mo. 653, 25 S. W. 390, and Burbank v. Boston Police Relief Assn., 144 Mass. 434, cited by defendant. In the case of Ellerbe v. Faust, Faust had been a member of the masonic order and also a member of a mutual benefit society composed exclusively of members of the order. He lost his membership in the masonic order by reason of engaging in an occupation which forfeited his membership under — 21 — the laws of the order, and at the same time and for the same reason lost his membership in the benefit society. However, he continued for a time to pay assessments to the society, believing he owed them, which were received and kept by the officers of the society. It was held that the payment of the assessments by Faust, and their retention by the officer of the society, did not have the effect to restore him to membership in the society. Burbank v. Boston Police Relief Assn., supra, is a parallel case, in which it -was ruled that after a police officer ceased to be a member of the association, it was not es-topped by the acts of its officers to deny that he was a member. . Leech did not cease to be a member of the order, and the question is not whether he was restored to membership after expulsion or suspension, but whether his certificate of insurance was forfeited while he was a member of the order in good standing. For the reasons stated, we do not think the certificate sued on was forfeited, and affirm the judgment. All concur. Goode, and Nortoni, JJ., on first proposition discussed in opinion.