Modern Woodmen of America v. Colman

Ames, C.

This cause is resubmitted after the allowance of a motion for a rehearing. A statement of the facts will be found in the former decision, published in 64 Neb. 162. The employment in which the deceased was engaged at the time of his death was not prohibited by his contract of insurance, but it was stipulated that if he should engage *661therein he should forfeit his beneficiary interest unless he should file with the head clerk of the order a written waiver of any liability by it for loss by death as the direct result of such occupation. He did not file such a document, but the clerk of the local camp, through an assistant, continued to collect the monthly assessments or dues, and to remit them to the head clerk, with full knowledge of the circumstances, for a period of three months, and until the death of the insured. Correctly speaking, the question is not whether the association by this conduct of its agent waived a forfeiture, but whether it waived the waiver required of the insured. In support of its contention that it did not do so the plaintiff in error, upon the reargument, relies principally upon three decisions. The first of these is the opinion of the United States court of appeals for this circuit, filed after reargument, in Modern Woodmen of America v. Tevis, 117 Fed. 369, on August 28, 1902. From the statement of facts contained in that opinion it does not appear to be in point in this controversy. As we gather from that statement, the contract provided for a suspension of the obligations of the company when and so long as the insured should be and remain delinquent of an assessment which had fallen due on the first day of the month of August, on the 10th day of which he died. He had also defaulted for one day in the payment of an assesment which came due on the first day of the preceding June, and the contract provided that in. such case he should not be reinstated without furnishing a written warranty that he was in good health. He did not furnish the .warranty, but the local clerk accepted and remitted his June assessment, and it was contended that in consequence thereof the warranty was waived, and the insured reinstated. The court decided against this contention, but how the question became material is not explained and we are unable to understand: If a reinstatement had been effected in June, still the deceased would have been at the time of his death under suspension for delinquency of the August assessment. It could not have *662been successfully urged that a formal reinstatement after one forfeiture or suspension, or a waiver of it, would operate as a waiver of a suspension subsequently incurred; and besides, a reinstatement after suspension would have amounted substantially to a new contract of insurance based upon the warranty of good health. The contract of insurance was already abrogated and it could not have been renewed by any act of the insured alone. The warranty, if it had been 'made, would not have restored the obligation of the contract if it had been intentionally untruthful — a matter into which the officers of the company would have had a right to inquire. But in the case at bar Colman could have continued his contract in force by an act of his own volition, and without the concurrence of the other party thereto. The Tevis case, as it is described in the opinion cited, does not appear to us to be in any respect analogous to that now under discussion. But if it is so, it is in conflict with principles which have for many years been enforced by this court, and it therefore ought not to be regarded as an authority here.

The decision next relied upon is that of this court in Field v. National Council of K. & L. of S., 64 Neb. 226. In that case the deceased had at the time of her death been delinquent for more than a year of six monthly assessments and of quarterly dues, and had been stricken from the roll of membership, of all of which facts she had full knowledge, but had made no attempt at reinstatement, either by discharging her delinquencies or otherwise. The sole claim in support of the plea of waiver was that through her husband she had made an oral agreement with the secretary of the local body that she should have an extension of time in which to make her payments, without affecting her standing or membership. It can not be said that the case resembles this in any particular.

The decision next relied upon is by this court in Royal Highlanders v. Scovill, 66 Neb. 213. In that case the contract provided that in case of delinquency the beneficiary certificate should be forfeited and should not be reinstated *663without full payment, nor unless the holder should he at the time in good health. The deceased was critically ill of a disease of which she shortly afterward died. She was in default of an assessment, which her husband paid to the clerk of the local body, who received it in ignorance of the illness. It was held that the payment was not made in good faith, but fraudulently, and was therefore ineffectual. The case does not appear to resemble the one at bar.

Finally it is earnestly insisted that inasmuch as the plaintiff in error is a mutual benevolent association, it should not be held to the same strict rales as respects forfeitures and the waiver of them as are applicable bet ween regular insurance companies and their policy holders. This consideration Avould appeal to us with greater force if these principles of mutuality and benevolence more frequently survived the holders of certificates, and Avere uniformly regarded by the associations as being applicable to, and as including, the persons named as beneficiaries. A charitable organization which collects its funds Avith avidity, but is astute in finding excuses for not bestoAving them upon the designated objects of its bounty, is not entitled to any exclusive or especial consideration a.t the hands of the court. The enormous volume of litigation with which associations of this kind have flooded the country and the extremely technical character of their defenses, in many cases, to actions upon their beneficiary certificates are a sufficient commentary upon an appeal for tender consideration by the judiciary. We agree, rather, with the opinion in Supreme Lodge Knights of Honor v. Davis, 26 Colo. 252, that “a benevolent association which issues benefit certificates to its members payable from a fund maintained by assessments upon the certificate holders, is, in effect, a mutual life insurance company, and is governed by the general rules of laAv applicable to such companies.”

The certificate held by Colman Avas not void, but voidable. It was optional with him to continue it in force by-filing a written waiver, and it was optional with the as*664sociation so to continue it vjdthout such Avaiver. He was not delinquent of dues or assessments, or otherwise liable to suspension. The association acted through its agents, and being a corporation, it could not act by other means. It demanded, received and retained his assessments Avith full knowledge of all the circumstances until after his death. It can not be supposed that it intended to take and keep his money without consideration. The knowledge of its agent, authorized to make the collection, was the knoAvledge of the company of all the circumstances under which the payments Avere made. This is not "the same as saying that the agent Avaived the forfeiture. It was waived by the association by taking and retaining' the money of the insured with notice of all the facts Avithin the knowledge of its agent. It is the duty of an agent to communicate to his principal all the facts concerning the service in which he is engaged that come to his knowledge in the course of his employment, and this duty, in a subsequent action between his principal and a third- person, he is, Avith exceptions not necessary to be here noted, conclusively presumed to have performed. This is the foundation of the doctrine, necessary to the public safety, that notice to an agent is notice to his principal. Mechem, Agency, pars. 719, 720; Bradley, J., in The Distilled Spirits, 11 Wall. (U. S.) 367.

Such is the rule Avith respect to other like agencies, and we can see no reason why it is not applicable in this case. To hold othenvise would, we think, be to put certificate holders to a great disadvantage, and to do them a grave injustice. If the plaintiff in error was a regular insurance company, there can be no doubt that under the repeated decisions of this court it would be held bound. Modern Woodmen of America v. Lane, 62 Neb. 89; Home Fire Ins. Co. v. Kuhlman, 58 Neb. 488; Nebraska & Iowa Ins. Co. v. Christiensen, 29 Neb. 572; Phœnix Ins. Co. v. Lansing, 15 Neb. 494; Phenix Ins. Co. v. Covey, 41 Neb. 724; Home Fire Ins. Co. v. Hammang, 44 Neb. 566; Mee v. Bankers Life Ass’n of Minnesota, 69 Minn. 210.

Opinions Prepared by Commissioners. Where opinions are prepared by commissioners, they must be permitted, necessarily, to state their reasons in their own way, without binding the court to all that is said arguendo, even though it concurs in the conclusions of law and express findings of fact. Williams v. Miles, ante, p. 479.

The foregoing by no means exhausts the list of authorities enforcing these principles by this and other courts, and we can see no reason why an exception should be made in favor of beneficiary associations.

It is recommended that the former decision of this court be adhered to and the judgment of the district court affirmed.

Duffie,- C., concurs.

By the Court: For the reasons stated in the foregoing opinion, it is ordered that the former decision of this court be adhered to and the judgment of the district court

Affirmed.