Sovereign Camp, W. O. W. v. McCrory

MORRIS, Special Chief Justice.

This is a suit originally instituted by Martha Jane McCrory against the Sovereign Camp of the Woodmen of the World, now by charter amendment Woodmen of the World Life Insurance Society, as named beneficiary on a benefit certifi*571cate issued by it to John A. McCrory on September 16, 1897, to recover the face amount of the benefit certificate, being the amount of $2,000, together with the statutory penalty and attorney’s fee, a copy of the benefit certificate being attached to the petition. An amended pleading was filed by the heirs of John A. McCrory, deceased, in which recovery was sought for the face value of the certificate, and in the alternative, to recover the premiums paid with accrued interest, and by trial amendment it was pleaded that the certificate was void.

The beneficiary certificate, which is the subject of this litigation, bears a large engraved heading, the first words of which are, “Beneficiary Certificate”. To the left of this large caption are the words, “No. 20537, Texas, Age 36”. To the right, just under this caption, are the words, “Amount $2,000, Rate $1.00. Payments to cease after 25 years”. Just below these words, and in the center of the page, likewise in. very large letters, are the words, “Sovereign Camp, Woodmen of the World”.

The certificate then reads: “This certificate issued by the Sovereign Camp, Woodmen of the World, by its authority, Witnesseth: That Sovereign John A. Mc-Crory, a member of the Phoenix Camp 32, located in Orange, State of Texas, is, while in good standing as a member of this fraternity, entitled to participate in its beneficiary fund to the amount of $2,000 payable at his death to his wife, Martha Jane McCrory, by the Sovereign Camp, and there shall also be paid the sum of $100.00 for the placing of a monument at his grave. This certificate is issued and accepted subject to the conditions on the back hereof, and those named in the constitution and laws of this fraternity, and shall be forfeited if said sovereign does not comply with said conditions, constitution and laws and such by-laws as are now in force or may hereafter be enacted by the Sovereign Camp or the camp of which he is a member at the date of his decease.”

Among other things, there is printed on the back of the certificate the following:

“Conditions referred to and made a part of this certificate :
“(1) This certificate is issued in consideration of the representations and agreements made by the person named herein in his application to become a member, and in consideration of the payment made when introduced in prescribed form, also his agreements to pay all assessments and dues that may be levied during the time he shall remain a member of the Woodmen of the World.
“(2) In case of his death while a member in good standing of the Order, his beneficiary or beneficiaries shall receive the full amount named in his certificate, unless the proceeds of one assessment upon all members in good standing during the month following the approval of the claim shall be less than said amount, in which case his beneficiary or beneficiaries shall only receive the proceeds of one assessment in full settlement of all demands.
“(3) If the admission fees, dues or beneficiary fund assessments levied against the person named in this certificate shall not be paid to the clerk of his camp as required by the constitution and laws of the Order, this certificate shall be null and void and continue so until payment is made in accordance therewith”.

In the application made by John A. Mc-Crory for membership and participation in the beneficiary fund, referred to in the benefit certificate, there appears this provision: “It is agreed that all the provisions of the constitution and laws of the Order now existing or hereafter adopted shall form a part of the certificate. issued hereunder, whether printed on or referred to in such certificate or not”.

The Woodmen of the World pleaded among other things that the Society’s bylaws purporting to authorize the insertion of the “payments to cease” clause in the certificate was ultra vires the Society and void, and was in fact repealed by the Sovereign Camp of the Society, its supreme legislative or governing body, in 1899, and that the insured, if he wished to have his certificate remain in force, was required to pay all dues and assessments levied against him by the Society throughout his life, and further invoking Article 4, Section 1, of the United States Constitution, pleaded the judgment of the Supreme Court of Nebraska, the State of the Society’s domicile, rendered in the case of Trapp v. Sovereign Camp, W. O. W., 102 Neb. 562, 168 N.W. 191, wherein it was held that the Society’s by-laws purporting to authorize the insertion of the “payments to cease” clause in the benefit certificates issued by it was adopted without charter power or authority, and therefore was ultra vires the Society and void. It was further pleaded that the presence of *572the “payments to cease” clause in a certificate issued by the Society in nowise affected the holder’s obligation to pay all dues, premiums, and assessments levied against him so long as he remained a member of the Society. The Woodmen of the World also pleaded the applicable provisions of its constitution and by-laws, which now provide for the payment of assessments by each member during his lifetime.

The trial was had to the court without a jury, resulting in judgment for the heirs of John A. McCrory for the amount of premiums paid on -the certificate, together with interest, from which judgment this appeal is prosecuted.

It will thus be seen that this whole controversy centers around the clause at the head of the certificate, “Payments to cease after 25 years”. John A. McCrory paid his assessments and dues required of him by the Society for the full period of 25 years. The last receipt book evidencing the payment of his premiums contained a notation, “Paid in full to the date of policy”. It is not made to appear by whom or by what authority such notation was made in Mr. McCrory’s receipt book. The last payment of assessments was made by John A. McCrory in September, 1922, which payment completed the 25-year period during whicH his certificate was in effect. No assessments 'or premiums were paid on the certificate after September, 1922. John A. McCrory died June 12, 1939.

The constitution and by-laws of the Society in effect in 1897 purported to authorize the issuance of life membership certificates. to certain members, which would be fully paid up in 25 years. This provision was repealed, however, by the legislative body of the Society in 1899, and since then the Society’s constitution and laws have provided that all members must pay dues and assessments during their lifetime to remain in good standing and to keep their benefit certificates valid. Further, it was held by the Supreme Court of Nebraska, the State of the Society’s domicile, in the case of Trapp v. Sovereign Camp, W. O. W., 102 Neb. 562, 168 N.W. 191, that the Society was without charter power to issue life membership certificates, and that the “payments to cease” clause was ultra vires the Society and void. This holding is binding on us. Wirtz v. Sovereign Camp, W. O. W., 114 Tex. 471, 268 S.W. 438.

However, the fact that the “payments to cease” clause was void did not,, in our opinion, under the facts of this case, avoid the certificate. After the repeal of the provision of the constitution and laws authorizing this character of certificate, an amendment to the constitution and laws-was adopted providing that all members should pay monthly assessments and dues-so long as they were members in good standing, to keep their benefit certificates in force. Under such amendment, so long as McCrory paid his dues and assessments,, he had the protection afforded by his certificate; when he ceased to pay, his certificate lapsed.

The constitution, laws and by-laws of the Sovereign Camp of the Woodmen of the World, as amended and adopted at the fourteenth biannual session at New York, N. Y., in July, 1921, in effect September 1, 1921, in effect when McCrory ceased paying assessments, provided, in Section 63, as follows:

“(a) Each member- of this Society shall pay to the clerk of his camp one annual assessment or one monthly installment of assessment as required by these laws or by the provisions of his certificate, which shall be credited to and known as the sovereign camp fund, and he shall also pay such camp dues as may be required by the By-laws of his camp. He shall pay any additional sovereign camp fund or camp dues or either, which may be legally called.
“(b) If he fails to make any such payments on or before the last day of the month, he shall stand suspended, and during such suspension his beneficiary certificate shall be void.”

The record clearly shows that the Sovereign Camp Woodmen of the World is- a non-profit, fraternal benefit society consisting of its members who belong to local organizations known as camps; that it is governed by representatives who assemble biannually on the odd years, the representatives to the sovereign camp being elected from the local societies or camps. At each biannual meeting of these representatives to the sovereign camp, matters pertaining to the general welfare of the Society, including amendments to the constitutions, laws, and by-laws are considered and acted upon. The rate of assessments and premiums are subject to reasonable change, as well as the form and substance of the certificates issued by the Society, such changes being considered *573and made by the supreme legislative body of the Society, consisting of delegates from the local societies at such biannual meetings. Each member is or has a right to be represented at such supreme legislative meetings.

The assessments or premiums paid by the members constitute the fund out of which payments are made on the beneficiary certificates. The officers of the Society are only collecting agents for the members of the Society in receiving and disbursing such funds. As appears from the certificate under consideration, in case of his death while a member in good standing of the Society, his beneficiary shall receive the full amount named in the certificate, unless the proceeds of one assessment upon all members in good standing during the month following the approval of the claim shall be less than said amount, in which case his beneficiary shall receive only the proceeds of one assessment. A member of the Society, therefore, stands in a dual relationship to each other member of the Society; he is both the insurer and the insured. By making payment of his assessments he affords a measure of insurance for each of his brothers in the Society, and in return all of the other members afford him a like protection by the payment of their premiums. Through this mutual arrangement all members of the Society are insured, and through their legislative representatives the members control the policies as well as all of the business and affairs of the Society. Being a member of the organization, and being represented in all of its deliberations, each member is bound by all the provisions of the constitution of the Society, by-laws, rules and regulations thereof, and all amendments thereto enacted by such representatives.

There is another and probably more cogent reason for holding that Mc-Crory was bound by the amendments to the Society’s constitution and by-laws. He made a written application for membership in the Society, which he signed, and which, according to its terms, became a part of the contract of insurance. By that application and the certificate issued pursuant thereto, he entered into a contract binding himself to abide by the constitution, laws and by-laws of the Society then in effect or which may thereafter be adopted. It follows, therefore, that when the provision of the Society’s constitution and bylaws providing for the issuance of certificates bearing the “payments to cease” clause was amended and repealed, and a provision was enacted binding each member to pay premiums or assessments during his lifetime, such amendment to the constitution and by-laws was binding on Mc-Crory, and when he ceased paying his premiums or assessments his certificate became void. Stark et ux. v. Sovereign Camp, W. O. W., 189 Ky. 719, 225 S.W. 1063.

The further point is made that the receipt book held by John A. McCrory contained a notation after the month of September, 1922, being the last monthly assessment paid by him, “Paid in full to the date of policy”. It is not clear just what this notation means, but if we give it the effect contended for by appellees, that it meant the policy was paid in full for 25 years, that notation does not add anything to the obligation of the Society. It is admitted that the payments were made for a full period of 25 years. Under the constitution, laws and by-laws of the Society, no one had authority to bind the Society by any receipt in full, and unless the payments of premiums or assessments were made monthly while a member was in good standing, his membership was forfeited and his benefit certificate lapsed. The record does not disclose who made this notation or by what authority it was made, and under such circumstances, such notation could not have the effect of enlarging the liability of the Society.

It follows from what has been said that the case should be, and the same is, reversed and rendered.