Ordelheide v. Modern Brotherhood of America

CAULFIELD, J. This is an action brought by an administrator to recover the amount, with interest, of what plaintiff calls a life insurance policy and defendant calls a benefit certificate issued by a fraternal benefit society, for one thousand dollars. The plaintiff had judgment and defendant has appealed. The policy or certificate was issued to plaintiff’s intestate, Walter L. Leek, and was payable to his “legal representatives, related to the member as . . .” Defendant admits all matters essential to a recovery by the plaintiff and relies solely for its defense upon the fact that the insured committed suicide, there being a stipulation in the application made by the insured, as well as in. the by-laws of the defendant at the time the certificate was issued, that in that event the certificate would be void. It is conceded that the deceased came to his death by suicide, but there is no showing that he contemplated suicide at the time he made Ms application. In the absence of such showing, section 6945 of the Revised Statutes 1909, makes the defense of suicide [683] unavailable to the defendant, unless, as it contends, it is, as to the certificate here sued upon, entitled to claim the exemption accorded to a fraternal beneficiary association by section 7109, which provides, among other things, that “payments of death benefits shall be to the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon, the member. Such association shall be governed by this article, and shall be exempt from the provisions of the insurance laws of this state.” The defendant is an Iowa corporation, doing business in this state by certificate from the secretary of state, as provided by our statute. By the laws of Iowa, under which defendant was organized, defendant is authorized to issue benefit certificates to the “husband, wife, relative, legal representative, heir or legatee of such member.” The insured in his application for the certificate sued upon, designated, as the beneficiary, his “legal representatives.” The certificate states that its amount “shall be paid to legal representatives, related to the member as . . .” It will thus be noted that not only is the defendant authorized by the laws of Iowa to issue benefit certificates to a class not authorized by our law, i. e. legal representatives, but in this ease it exercised- that power within the confines of this state by making the certificate here sued upon payable to the “legal representatives” of the insured. The only question is whether, having issued a certificate not authorized by our statute, it can still claim the exemption which our statute grants as a special privilege to those doing the kind of business prescribed. We have concluded that it cannot. There are different classes of insurers under our statutes. Some have the privilege of doing a more general business than others and are therefore more heavily burdened by having read into every policy they issue section 6945 of the Revised Statutes of 1909, which forbids the defense of suicide except upon the showing [684] prescribed. Others, fraternal beneficiary associations, are allowed to do only a restricted insurance business, being limited to issuing policies or certificates to “the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon the member.” Because of this and other limitations, they are specially privileged, by being exempted from the general insurance laws. If their operations are not so limited, then they are not so privileged. It is only “such associations” — i. e. those of the character and observing the limitations described in section 7109 — that enjoy the privilege of being exempted. An association may be a fraternal society, with lodge system, ritual, etc., but if it is issuing policies of a character not authorized by the statute, it is not entitled to the special privileges given by the statute. [State ex rel. v. Vandiver, 213 Mo. 187, l. c. 197, et seq., 111 S. W. 911.] “It is not the nature of the society, but the terms of the contract in suit which determines whether its exemption from the general statute shall apply in that case;” and if it executes a contract which the statute does not authorize it to execute, it is, as to such contract, not entitled to the exemption. [Wilson v. Amer. Benevolent Assn., 125 Mo. App. 597, 103 S. W. 109.] Thus, in Toomey v. Supreme Lodge, 147 Mo. 129, 48 S. W. 936, as construed by our Supreme Court in State ex rel. vs. Vandiver, supra, l. c. 199, “it was hqjd that the defense of suicide was unavailing because, although the defendant was a fraternal beneficiary society, yet the policy sued on was an old-line policy of life insurance and therefore subject to the general statute, and the defendant was liable as an old-line company would be;” and in Aloe v. Fidelity M. Life Assn., 164 Mo. 675, 55 S. W. 993, as likewise construed, “it was held that although the defendant was chartered to do business only on the assessment plan, yet the policy it had issued in that case was not on that plan but on old-line policy, and therefore. [685] the defendant was held liable as an old-line company.” And the Kansas City Court of Appeals has held three times (twice in cases involving this very defendant) that a benefit certificate made payable to the “legal representatives” of the insured is without the exemption allowed to fraternal beneficiary associations under section 7109. [Herzberg v. Modern Brotherhood of America, 110 Mo. App. 328, 85 S. W. 986; Wilson v. American Benevolent Assn., 125 Mo. App. 597, 103 S. W. 109; Kroge v. Modern Brotherhood of America, 126 Mo. App. 693, 105 S. W. 685.] These cases are directly in point on the question here involved, and we approve the conclusions reached in them. In doing so, we see no necessity and have no inclination for departing from our conclusion in the case of Armstrong v. Modem Brotherhood of America, 132 Mo. App. 171, 112 S. W. 24. In that case the beneficiary named was within the classes permitted by our statute and the contract before us was fully authorized by the statute. There was no attempt there, as there is here, to issue a contract which is not exempted from the suicide provision of the insurance' laws. In that case, the contract was of the privileged class. In this one it is not. We held there that the limited authorized class was privileged by being exempt. We hold here that the unauthorized class is not privileged. Nor can the fact that the defendant has received the statutory certificate of authority to do business as a fraternal beneficiary association affect the matter. [Herzberg v. Brotherhood, supra.] We are not impressed by the suggestion that the designation “legal representatives” must be construed to mean, not the executor or administrator of the insured, but some one of the classes authorized by our statute. The words “legal representatives” must be construed to mean “executors _ or administrators,” in the absence of anything showing a different intent. [New York Life Ins. Co. v. Kansas City Bank, 121 [686] Mo. App. 479, 97 S. W. 195; Walker v. Peters, 139 Mo. App. 681, 124 S. W. 35.] Here, there is a total absence of anything showing such different intent. There is not even a suggestion that the insured had any family, heirs, blood relatives, affianced wife, or dependents. There is nothing disclosed concerning him, except that he was a young man twenty-two years of age. The only expression disclosed of his desire in the premises is contained in the application to the effect that the beneficiary should be his “legal representatives.” The omission to strike out from the certificate the words “related to the insured as . . .” can hardly be considered an expression of an intention that the “legal representatives” should be related to the insured in some one of the authorized classes. It is plain that these word's and blank were part of the printed form and were left unerased through mere inadvertance. This is altogether too meagre a circumstance, if any at all, to justify an interpretation avoiding a contract which should be liberally interpreted in favor of the insured. The judgment is affirmed. Nortoni, J., concurs. Reynolds, P. J., dissents, and as he deems the decision rendered herein contrary to the decision of the Supreme Court in Westerman v. Supreme Lodge Knights of Pythias, 196 Mo. 670, 94 S. W. 470; State ex rel. v. Vandiver, 213 Mo. 187, 111 S. W. 911; Loos’ Guard. v. John Hancock Mut. Life Ins. Co., 41 Mo. 538, and Ewing v. Shannahan, 113 Mo. 188, 20 S. W. 1065, the case will be certified to the Supreme Court, in obedience to the constitutional mandate, for final determination.