Case ID: iowa_198/html/0233-01.html
Source: Caselaw Access Project
Author: {"author": "Evans, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Mary J. Lawler, Administratrix, Appellee, v. Roman Catholic Mutual Protective Society, Appellant.
    ORIGINAL NOTICE: Service — Local Lodge. An action against an 1 incorporated fraternal beneficiary society on its policy of insurance may be brought by service on the officers of the local branch or lodge through which the poliey was issued, and through which the society- makes its collections of premiums.
    JUDGMENT: Default — Refusal to Set Aside. Knowledge on the part 2 of the defendant that plaintiff was unquestionably intending to bring action on his claim at the term of court in question may go a long way in justifying the trial court in refusing to set aside the default.
    
      Appeal from Webster District Court. — E. M. McCall, Judge.
    March 11, 1924.
    Rehearing Denied June 28, 1924.
    Action to recover upon a certificate of insurance. There was a judgment against the defendant by default. Fifteen days later, and during the same term of court, the defendant appeared, and filed an application to set aside the judgment and to grant a new trial. Such application, after a full hearing on the merits, was denied by the district court, and the defendant has appealed from such order. —
    Affirmed.
    
      Sawyer <b Norman and Johnson & Martin, for appellant.
    
      Mealy, Thomas & Mealy and Mitchell <& Files, for appellee.
   Evans, J.

— I. The application for a new trial was predicated substantially upon two grounds:

1. That the purported service of original notice of the suit was void, and therefore conferred no jurisdiction upon the district court.'

2. That the defendant was prevented by casualty and mis'fortune from obtaining knowledge that a suit against it had been commenced.

Taking up these grounds in their order, it appears that David Lawler, to whom a certificate of insurance had been issued by the defendant in 188Í, died in April, 1922. The suit was brought upon such certificate. The defendant is a fraternal beneficiary society, and purports to be duly incorporated. Service of original notice-was made upon it by serving Conway, president of the local branch of the defendant society, such local branch being known as No. 25, St. John’s, Fort Dodge, Iowa. The defendant’s principal place of business is at Fort Madison, Iowa, and its general secretary is Kern. The question at this point is whether the plaintiff had statutory warrant for serving an original notice upon Conway, as a legal representative for that purpose. -The statute, if any, upon which the plaintiff does and must rely is Section 3532 of the Code of 1897, which provides:

“Sec. 3532. When a corporation, company or individual has, for the transaction of any business, an office or agency in any county other than that in which the principal resides, service may be made on any agent or clerk employed in such office or agency, in all actions growing out of or connected with the business of that office or agency.”

Did the local branch, through its officials, constitute a local office or agent of the defendant company, within the meaning of the foregoing section ? In view of the existing judgment, the burden was upon the defendant, as an applicant, io show that it did not. The articles of incorporation are not in evidence. We are, therefore, without specific or direct evidence as to just what the relation is between the general office and the local branch, or just what the function of the local branch is. There is evidence, however, from which such relation and function may be to some extent implied. The certificate sued on is as follows:

“Constitution Amended Nov. 5 and 6,-1879.
“Organized at Iowa City, May 21, 1879.
“Incorporated November 20, 1879.
“Roman Catholic Mutual Protective Society of America.
“Certificate of Membership.
“This Certifies, That David Lawler Bom August 29th, 1836, is a member of the Roman Catholic Mutual Protective Society of Iowa, having been received in due form by Local Branch, No. 25 St. John’s at Fort Dodge, Iowa, and is entitled to all the benefits of membership so long as he conforms with the rules and regulations prescribed by the Charter, Constitution and By-Laws of this Society.
“The Society pays at his death Two Thousand Dollars, when the Society numbers two thousand members, but until that time it shall be one dollar for each and every member; but the society shall not be in any case liable for more than One Dollar for each member in good standing.
“Date Jan. 30, 1881.
“N. F. Scallum, President.
“M. J. Farley, Gen’l See’y.
“J. H. Ryan,
“President Local Branch.
“C. Laufersweiler,
“Secretary Local Branch.”
A witness for the defendant testified as follows:
“This society is a fraternal beneficiary society, and organized under the chapter of the Iowa statutes providing for the organization of fraternal beneficiary societies. It has separate lodges or branches, with a ritualistic form of government, as required by statute. The members are issued a certificate of membership in the society, which corresponds with the policy in an old-line insurance company. Instead of having lodges in the various towns, they are called branches. These branches are made up of members of the society, consisting of groups located in a particular town and surrounding vicinity, and the local group elect all of their officers who deal between this group or branch and the general society. The home office of the organization is at Fort Madison, Iowa. ’ ’

It will be noted from the certificate quoted, that the membership of Lawler came through the local branch; that he was received as a member by the local branch; that the certificate became effective by the signatures of the president and the general secretary of the society- and of the president and the secretary of the local branch. It further appears that all assessments of members are collected and remitted by the local branch through its secretary. It is true that the membership is small; and that the branch, as such, has no regular meetings, and meets only upon call, and has had no meeting for ten years; and that the activities of its officials are few. The fact is .that it maintains its organization as such; that it keeps books; that it maintains correspondence with the society; and that the society deals with it as a part of its own organization. The fair implication of the record before us is that the local branch is a part of the defendant’s plan of organization, and that it is intended as the local agency through Which it comes in contact with its- individual members, and through which it acquires its members, and through which it collects all dues from its members. Section 3529, Code Supplement, 1913, and Code Sections 3530 to 3532 provide methods of serving notice upon corporate bodies. Of these, Section 3532 is the broadest and most general in its scope. The general policy of the statute is that an incorporated society must become tangible to a suit in the county where it transacts business, and may become so through the same agency through which it transacted the business. To require a plaintiff in such a ease to carry or send his original notice hundreds of miles distant for the purpose of service is quite repugnant to the clear general policy of the statute. If the present Section 3532 fails fairly to cover the present case, such failure is the result of legislative inadvertence or oversight.

The defendant society has transacted business in Webster County for more than forty years, in the acquisition of members and in the delivery of certificates and in the collection of dues; and it has done it all, be it much or little, through the local branch. Concededly, it is suable in that county. Its local branch had two officials, a president and a secretary. Such officials (not the present incumbents) were signatories to the certificate sued on. We think it was permissible to the plaintiff to serve her original n.otiee upon either of them. She did serve it upon the president, who delivered the same forthwith to the secretary of the local branch. It was a good service, and conferred jurisdiction upon the court.

II. Did the trial court abuse its discretion in refusing a new trial! The ground of appeal to this discretion was that the company proper, at its headquarters, received no notice of the suit until after judgment was entered. For some reason not well explained in the record, ^ iocaq officials did not send the'original notice to the home office, nor did they advise such office of its service. The explanation of the secretary is that he was expecting to hear from the general secretary. He evidently inferred that the general secretary would receive the same notice that he had. This mistaken inference on the part of the secretary had in it a quality of p- 'afortune, so far as the society was concerned, in that it operated to withhold from it a communication to which it was entitled from its own agency. If this w^ere all, it would make a strong call upon the discretion of the court to grant a prompt application for a new trial. But, on the other hand, it appears that, for some time prior to suit, negotiations were carried on by correspondence between plaintiff’s attorneys and the general headquarters. The general officers at headquarters rejected the claim definitely, and denied liability thereon. They were advised definitely in this correspondence that the plaintiff would bring an action in Webster County in its August term of court. This information was imparted th^ee weeks before the original notice was served; whereas the original notice was served three weeks before the first day of the August term. The officers of the society must be presumed to have known that the society was subject to service upon its local branch in Webster County. It would have been a simple precaution against possible misunderstanding on the part of the local officials for the general secretary to advise the local officials of their duty in the event of a suit. This failure on the part of the general secretary was not' a high degree of negligence, but it was something less than diligence. If there had been any connivance or collusion or any sinister conduct on the part of plaintiff or her attorneys to bring about such a situation, a different question would be .presented. There was nothing of that kind. It is claimed in argument that the local secretary was misled by a casual conversation with one of plaintiff’s counsel. We have carefully scrutinized the evidence in that regard, and find nothing worthy of more extended notice. The counsel in question was justified in supposing that the original notice had-been sent to its destination. The conversation complained of could have no significance except upon the supposition that such counsel knew that the local secretary had not advised the general secretary of the service of notice.

It goes without saying that the trial court has a considerable discretion in the matter of setting aside a judgment by default. We have frequently said that we draw the line more closely upon such discretion when the application is refused than when it is granted. We should have been quite as well satisfied with the record in this case if the application had been granted. The power of discretion, however, is vested in the district court, and we are not justified in encroaching upon it, such as it is. In view of the advance notice given to the defendants of the purpose of plaintiff to bring a suit in the August term, we cannot unduly minimize the effect of such circumstance upon the discretion of the court, nor say that such discretion was abused. We are constrained, therefore, to affirm the order of "the trial court.— Affirmed.

Arthur, C. J., Preston and Faville, JJ., concur.