#### MICHIE BRADY v. FUNERAL BENEFIT ASSOCIATION OF THE STATE CAMP PATRIOTIC ORDER SONS OF AMERICA OF NORTH CAROLINA, Incorporated, and WASHINGTON CAMP NO. 58, PATRIOTIC ORDER SONS OF AMERICA.

(Filed 28 June, 1933.)

1. Insurance T c — Rights under policy in mutual benefit association held forfeited by insured’s failure to pay dues.

The members of a local camp of an order were insured by its affiliated mutual benefit association, the members of the camp paying dues to the camp and the camp paying assessments to the association. The by-laws of the association provided that no benefits should be paid for the death of a member who was more than thirteen weeks in arrears in his dues. Insured was thirty-five weeks in arrears in his dues to the camp at the date of his death, but the camp had paid to the association all premiums for all its members, including the insured: *Held,*under the association’s by-laws the beneficiary named in the policy was not entitled to recover on the policy, other by-laws of the association relating to the payment of benefits by the local camps not being repugnant to the by-laws providing for forfeiture of benefits for nonpayment of dues.

2. Estoppel O a—

Waiver is an intentional relinquishment of a known right, and knowledge of the right and intent to waive must be made plainly to appear.

3. Insurance T c — Association’s retention of premiums from local order held not to constitute waiver of insured’s failure to pay dues.

The members of a local camp of an order were insured by its affiliated mutual benefit association, the members of the camp paying dues to the camp and the camp paying assessments to the association. The local camp paid assessments to the association on all its members and the association accepted payment without knowledge that insured, one of the members of the local camp, was grossly in arrears in his dues. *Held,*the assessment of insured as a member was paid by the local camp and not by insured, and the association’s acceptance of payment without knowledge of insured’s bad standing did not constitute a waiver, nor does its retention of the assessment after knowledge constitute a waiver, the question of refunding being a matter of adjustment between the. camp and the association, and the camp not being an agent for insured in paying the assessment, the camp being forbidden to do so by the by-laws of the association.

Clarkson, J., dissenting

Appeal by defendants from *Gowper, Special Judge,*at March Term, 1933, of Cabarrus.

Eeversed.

*Hugh G. Mitchell and Hartsell & Hartsell for appellants.*

*Armfield, Sherrin & Barnhardt for appellee.*

*6Adams, J.

Washington Camp No. 58 is a fraternal organization located at Kannapolis and the Funeral Benefit Association is licensed by the State of North Carolina to insure the members of Washington Camp. The association insured the life of C. B. Brady, a member of the camp, in the sum of five hundred dollars. The insured died on 5 September, 1931, and the plaintiff was named as the beneficiary of the insurance. She furnished proof of loss and upon their refusal to make payment brought suit against the defendants.

At the time of his death the insured was in arrears for more than thirty-five weeks in the payment of his dues to the local camp. According to the “laws, rules, and by-laws” the camp agreed to make no claim on the association for funeral benefits upon the death of any of its members (b) when the deceased member was not in good standing in the camp at the time of his death and entitled to benefits from the camp according to the laws of the National and State Camps and the constitution and by-laws of the Washington Camp, or (g) if the deceased member was in arrears for dues to his camp for more than thirteen Aveeks at the time of his death. Article 3, sec. 3.

It Avas likewise prOAÚded that no camp should receive funeral benefits from the association in the folloAving cases: . . . (c) If the member by reason of whose death the claim is made was not in good standing in his camp and in the order as proAÚded by the laAA's of his camp and the laAA's of the State and National Camp, or (f) for the death of a member in arrears for dues to liis camp for ov-er thirteen Aveeks at the time of his death. Article 12, secs. 1, 2.

While the foregoing articles embody the pertinent agreement betAvoen the camp and the association Avith respect to the exclusion of funeral benefits, the plaintiff relies upon Article 3, sec. 2, which provides in substance that eA^ery camp must have a local laAV requiring payment to the beneficiary of the deceased member of the full amount *received*from the association, irrespective of the time of his membership or financial standing, less the cost of probate and charges due the camp; but this proAÚsion Avas obAdously intended to prevent the diversion or dissipation of the funeral benefit and to assure its payment to the beneficiary.

The financial secretary of the camp testified as follows: “I didn’t do anything with reference to paying his dues to the Funeral Benefit Association up to the time he died. We get a card from the State secretary, eA^ery member that is on the roll at the first of each month, and we are supposed to j>ay that on the 20th of each month. I never dropped him from the roll until after he Avas dead. I neArer notified the State secretary that he had been dropped until after he died. I paid the Funeral Benefit Assessments against our camp of all members that Avere on the roll each month, including- Mr. Brady, up to his death. I dropped him as soon as I found out he was dead.”

*7From tbis- testimony tbe plaintiff draws tbe conclusion tbat tbe association received the funeral assessments and is consequently liable for payment of tbe insurance. Tbis is a misconception. Tbe assessments were not paid by tbe deceased whose dues were grossly in arrears; tbe association did not know tbe deceased was in “bad standing” witb tbe camp; and if, after receiving tbis information it bad paid tbe insurance it would bave violated tbe express terms of its agreement with tbe camp.

Tbe trial court submitted two issues: tbe first, whether tbe association bad waived tbe provisions contained in its laws and introduced in evidence; tbe second, tbe amount alleged to be due the plaintiff.

Tbe court instructed tbe jury to answer tbe first issue in tbe affirmative if they found tbe facts to be as testified and as the evidence tended to show, being of opinion tbat tbe defendant, having received the $3.00 from tbe local order, having learned tbat it was paid for the benefit of tbe deceased, having held it from tbat time, and not having returned it, bad waived tbe provisions offered in evidence. Tbe trial resulted in a verdict and judgment for tbe plaintiff, from which the defendants appealed.

Tbe defendants did not except to tbe instruction on tbe ground tbat a directed verdict is never permissible, for if all tbe evidence is practically one way in regard to the essential facts it is not error to instruct the jury, if tbe facts are found to be as stated in tbe testimony, to answer the issue as indicated in the charge. *Gaither v. Ferebee,*60 N. C., 303; *Wetherington v. Williams,*134 N. C., 276; *Grain Co. v. Feed Co.,*179 N. C., 654; *Trust Co. v. Ins. Co.,*201 N. C., 552. Tbe question is whether tbe evidence establishes a waiver as a matter of law.

Waiver is tbe intentional relinquishment of a known right. It is usually a question of intent; hence knowledge of tbe right and an intent to waive it must be made plainly to appear. *Mfg. Co. v. Building Co., 177*N. C., *103.*“There can be no waiver unless so intended by one party and so understood by tbe other, or unless one party has so acted as to mislead the other.” 2 Herman on Estoppel, sec. 825.

When tbe financial secretary of tbe camp paid the funeral benefit assessment tbe association did not know tbat tbe deceased had forfeited bis right to tbe insurance. Tbe court, therefore, applied tbe doctrine of waiver only to tbe retention of tbe assessment by tbe association witb knowledge of tbe “bad standing” of tbe insured.

In our opinion there is error in tbe instruction. Tbe insured paid no assessment after 1 January, 1931. Tbe amount subsequently paid was advanced by tbe camp. Tbe camp cannot be deemed to bave been the agent of tbe insured for tbis purpose, because it had no legal right to act as such agent in direct violation of its contract with the association. Indeed, tbe association received no money from tbe insured after *8the first day of January and was therefore under uo obligation to make any remittance to the beneficiary after acquiring knowledge of all the facts. The question of refunding is a matter to be adjusted between the defendants.

Furthermore, there is no evidence of an intention on the part of the association to appropriate to its own use the amount advanced by the camp. *Matthews v. Ins. Co.,*147 N. C., 339. It has indicated its readiness to return the money, although it may have no right prematurely to demand a receipt.

This is a case to which the language of the Court in *Hay v. Association,*143 N. C., 256, may appropriately be applied: “It is always sad when one who has made payments on his policy deprives his family of expected protection by failure to pay at a critical time. But insurance is a business proposition, and no company could survive if the insured could default while in good health, but retain a right to pay up when impaired health gives warning. It is a warning of which the company also has a right to take notice when asked to waive a forfeiture. It is the insured’s own fault when he doe's not make a payment as contracted.”

As to the plaintiff the judgment of nonsuit should have been allowed, but as to the defendants the cause may be retained for adjustment of their rights as to the amount advanced to the association.

Reversed.

Clarkson, J., dissenting.