Action by the widow of Louis N. Marshall to recover from defendant a sum claimed to be due upon a certificate issued by defendant to said Marshall in his lifetime, in which his wife, Emily, was named as beneficiary. The defense set up is, that, at the time of his death, Marshall was not a member of the defendant, in good standing, and was not entitled to participate in its beneficiary fund, out of which the sum claimed was by the terms of the certificate made payable. Defendant had judgment, from which and from the order denying her motion for a new trial plaintiff appeals. The contention of appellant relates to the law as applicable to the facts, rather than as to what the facts really are.
The court found that defendant is a corporation organized under the laws of this state for fraternal, social, and beneficiary purposes, and has subordinate lodges subject to its control. Among its objects is the following, namely: to issue to each full-rate workman-degree member of each subordinate lodge of defendant, a certificate entitling the beneficiary named therein to the sum of two thousand dollars, and to provide payment thereof upon the death of said member in good standing. Harmony Lodge No. 9, of San Francisco, is a subordinate lodge of defendant, in which Marshall became a member in 1893; he subsequently became a workman-degree member, and there was issued to him a beneficiary certificate, agreeably to his application. In 1894, Marshall *Page 689 became delinquent in the payment of certain assessments, and was suspended from membership in defendant organization. He subsequently applied for reinstatement, and upon compliance with the laws in such cases, relating to re-examination by the medical examiner, etc., was reinstated, and his beneficiary certificate was renewed. Having lost the original certificate, on his application the certificate now in question was issued to him, February 22, 1896, payable to his wife. On March 1, 1896, defendant duly levied certain assessments, under the provisions of its constitution, upon all members under its jurisdiction, which became due and payable March 28, 1896. Having failed to pay his assessment, Marshall became and was suspended from the right to participate in defendant's beneficiary fund, by virtue of section 429 of defendant's constitution and laws. Marshall died, October 13, 1896, and proof of death was made to Harmony Lodge and to defendant, and plaintiff demanded payment from defendant of two thousand dollars, which was refused. The court also found that about August 15, 1896, Marshall then being more than three months in default for such nonpayment, "the officers of Harmony Lodge did, by a majority vote of its members, attempt to reinstate him, the said Marshall, in the beneficiary fund of defendant"; that at the time of such attempt to reinstate, the laws of defendant covering such reinstatement under such circumstances provided as follows: "Any member in arrears in beneficiary assessment for a term exceeding three months and less than six months, shall make application in writing, and must again be examined by the medical examiner of the lodge, whose reports shall be in the manner and form as prescribed by the grand lodge, and shall recommend the applicant for membership, and he shall pay all assessments for which he would have been liable had he remained in good standing. Such medical examiner's report shall be forwarded to the grand medical examiner, and when returned bearing the approval of said medical examiner, he may then be reinstated to membership and his beneficiary certificate be renewed; provided, that by a vote the majority of the lodge consent thereto. And no further application shall be received for the space of three months. He shall pay the medical examiner his fee. If the application for renewal be approved, the medical examiner's report, together with the notice of renewal of his beneficiary certificate, *Page 690 shall be forwarded to the grand recorder. If rejected, the amount deposited for renewal shall be returned to the applicant."
It was found that these provisions were not complied with, and that as soon as defendant was notified of the attempted reinstatement of Marshall in its beneficiary fund, it, in writing, promptly notified Harmony Lodge and its officers, and also the said Marshall, that it refused to reinstate him until he should have complied with the laws, and particularly the law above given; that subsequent to Marshall's suspension he paid to Harmony Lodge twenty-four dollars for dues and assessments, "but defendant has continuously and stead-fastly refused to accept said money, or any part thereof, and upon being notified of the payment by said Marshall to said Harmony Lodge of said sum of money, defendant promptly instructed said Harmony Lodge to return said money to said Marshall." The certificate contained the following provision: "This certificate is issued subject to and is to be construed and controlled by the laws of the order."
1. Appellant contends that as Marshall was never suspended from the lodge, the failure to pay assessments would not, of itself, work suspension from the beneficiary fund. The law of the defendant corporation, under which the certificate issued, was as follows: —
"t. Suspension of members for non-payment. The beneficiary certificate of each member who has not paid such assessment or assessments to the financier of his lodge, the only authorized officer to receive and receipt for all assessments and dues, on or before the 28th of said month, shall by the fact of such non-payment to said financier stand suspended, and no action upon the part of the lodge, or any officer thereof, shall be required as essential to such suspension."
In McDonald v. Supreme Council etc. Chosen Friends, 78 Cal. 49, cited by appellant, a somewhat similar question arose as we have here, and it was held that failure to pay a delinquent assessment did not, ipso facto, work suspension, but the decision was placed upon the ground that the laws of the society required some adjudication by the council, in order to declare a member suspended. And it was said in the opinion, "It cannot be doubted that if there was a complete suspension within the meaning of the laws governing the association, a compliance with said conditions was necessary, for such is the plain provision of the laws." The laws *Page 691 governing the defendant corporation make no provision for any adjudication or declaration of suspension by any council, but plainly state that upon non-payment the member shall "stand suspended, and no action upon the part of the lodge, or any officer thereof, shall be required as essential to such suspension." In becoming a member, Marshall agreed in writing to "make punctual payment of all assessments, . . . and to conform in all respects to the laws . . . of the order"; and in applying for the beneficiary certificate he signed a further agreement, stating "that compliance on my part with all laws, regulations, and requirements which are or may be enacted by said order is the express condition upon which I am entitled to participate in the beneficiary fund," etc. We do not think appellant's contention can be maintained, that these provisions relating to the beneficiary fund subjected the association to the operation of the general insurance laws of the state, or constituted the society an insurance company, as contemplated in such general laws. Section 451 of the Civil Code expressly declares that associations such as this one are "not to be insurance companies in the sense and meaning of the insurance laws of this state, and are exempt from the provisions of all existing insurance laws of this state."
We think, under the laws of defendant, the non-payment of assessments had the effect to suspend the member at least from participation in the beneficiary fund.
2. There was no waiver. Millard v. Supreme Council L. of H.81 Cal. 340, cited by appellant, is not in point. In that case all assessments had been paid, and the money placed in the treasury of the benefit fund, before the death of the member, and this was held to be a waiver of any forfeiture, and it was said that "whether or not the deceased, in a strict legal sense, was in good standing at the time mentioned was immaterial."
The evidence in the present case was, that in August, 1896, some three months after Marshall became delinquent, he paid all arrears to the financier of Harmony Lodge, who gave a receipt therefor, and reported the payment to the lodge, the members of which, by unanimous vote, voted to reinstate Marshall. The law as to examination by the medical examiner was wholly disregarded. The payment was reported, as required by the law of the society, to the grand lodge, which promptly refused to receive the money or to *Page 692 acknowledge any reinstatement of Marshall's certificate, upon the ground that he had not complied with defendant's laws with reference to reinstatement in its beneficiary fund, and particularly had not submitted himself to re-examination. Defendant informed the lodge, in writing, that said attempted reinstatement was illegal, and directed the lodge to return to Marshall any assessments which he may have paid upon such reinstatement, and to so notify Marshall. This action of defendant was communicated to Marshall, but he did not have himself re-examined for reinstatement. In the course of the correspondence which ensued between Marshall and the financier of the Lodge, the latter, on September 17, 1896, wrote Marshall, who was then in the country, and sick: "Inclosed is a letter sent to our recorder by the grand recorder in reply to his report for September 1st. You will see that before I accepted any money from you, you should have been re-examined. The law says that after three months a re-examination is necessary on reinstatement . . . Now, the only way out of the difficulty is for you to go to the examining physician of the lodge there, and tell him that it is for reinstatement in your lodge here; get it, and send it to me as soon as possible, and we will elect him as examiner for the occasion; in that way you will be all right." We do not see how there could be a waiver, where the members and the lodge proceeded in direct violation of the laws of the defendant, and where defendant promptly disavowed their acts. Nor can it be said that the lodge, or its financier, was anything more than a special agent of defendant, with defined powers which were known to the members. The law of defendant on the subject reads as follows: "The officers of subordinate lodges shall be, and they are, the agents of the members of the lodge to which they belong, in the transaction of all the official business required of them by this constitution, and are not the agents of the grand lodge."
But, as the agent of defendant, the financier of the lodge could not exceed his authority, and the requirement of re-examination before reinstatement was known to all members and the agent. Marshall knew the laws, for he was once reinstated after a medical examination. The action of the financier and the lodge was in direct violation of the defendant's laws and neither the agent nor the lodge had the power to waive these laws, for they became essential elements of the contract with Marshall.(Bograefe v. Knights of Honor, *Page 693 22 Mo. App. 127; Harvey v. Grand Lodge, 50 Mo. App. 472; Bacon on Benefit Societies, sec. 148.) There is reason in the law of defendant. The assessments to meet death claims are levied throughout the state, and all subordinate lodges must contribute. All the lodges are pecuniarily interested in having the laws enforced. An individual lodge might be willing to waive a law in order to secure a benefit to one of its own members when other lodges would object. Appellant cites numerous cases of a somewhat similar character, where the association was held to have waived the requirements of its laws. But they appear to be cases where the grand body has by its conduct or by acts ratified the acts of the subordinate lodge, or has in some way waived the particular by-law or provision of its constitution in question. There are cases where the delinquent assessments had been paid, and before the time for reporting payments arrived, the member died; others, where the grand body had received the money and retained it until after the death of the member; others, where the grand body had received the money and retained it after notice of some misrepresentation made in the application for membership; others, where payment of a particular assessment was received and accepted subsequent to a previous assessment that had not been paid. But in all of them there was either waiver by some action or some failure to act on the part of the grand lodge, or there was some action by the local lodge which the grand lodge ratified upon learning of it. In no cases where the grand body promptly disavowed the illegal act of the subordinate body while the insured member was still living, and had an opportunity to comply with the laws of the society, and failed to do so, can we find that the courts have applied the rule as to waiver. Indeed, on principle, we do not see how it could be done without endangering the success of the entire scheme of insurance in which all members are interested. The requirement of re-examination is a reasonable one, and we think is an essential element of the contract, made so by the laws, which cannot be disregarded by any individual lodge, or by the insured member under suspension.
There is no element of estoppel involved in the case. Marshall was in no way misled or induced by defendant to change his position to his injury. He, as well as the lodge to which he belonged, knew when he paid the assessments it could not reinstate him without their being accompanied *Page 694 by the certificate and report of the medical examiner and the approval of defendant. His only hope was that the defendant would accept payment and waive the re-examination. He waited from March 29th, when he became suspended, until August 15th, before making payment, which was promptly refused when reported to defendant, and was at once notified, and he did not die until two months later. But he failed meanwhile to comply with the laws of the society. The fact that the local lodge retained the money until Marshall died does not affect the case. Marshall was in the country, and an offer was made to return the money to Mrs. Marshall, who refused to receive it. Besides, the financier was in correspondence with Marshall up to a time near the latter's death, endeavoring to have the laws complied with, which will account for the money being in the financier's hands when Marshall died.
It is advised that the judgment and order be affirmed.
Haynes, C., and Gray, C., concurred.
For the reasons given in the foregoing opinion the judgment and order are affirmed.
McFarland, J., Temple, J., Henshaw, J.
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