Case Name: F. A. ORDELHEIDE, Administrator, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant
Court: St. Louis Court of Appeals
Jurisdiction: Missouri
Decision Date: 1911-07-15
Citations: 158 Mo. App. 677
Docket Number: 
Parties: F. A. ORDELHEIDE, Administrator, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant.
Judges: 
Reporter: Missouri Appeal Reports
Volume: 158
Pages: 677–728

Head Matter:
F. A. ORDELHEIDE, Administrator, Respondent, v. MODERN BROTHERHOOD OF AMERICA, Appellant.
St. Louis Court of Appeals,
July 15, 1911.
1. FRATERNAL BENEFICIARY ASSOCIATIONS: Exemption from General Laws: Compliance with Statute. An association may be a fraternal society, with lodge system, ritual, etc., but if it issues policies of a character not authorized by section 7109, Revised Statutes 1909, it is not entitled to the special privileges given by the statute.
2. -: -: --: Designating Legal Representative' as Beneficiary. A foreign corporation, authorized to issue benefit certificates to the husband, wife, relative, legal, representative, heir, or legatee of the member, which issues in this state a certificate payable to the legal representative of the member is not within the exemption accorded to fraternal beneficiary associations by section 7109, Revised Statutes 1909, since that section provides for the payment of death benefits to the families, heirs, blood relatives, affianced husband or wife of, or to persons dependent on, the member, and hence such a corporation is subject to section 6945, making the defense of suicide unavailable to life insurance companies.
3. -: -: -: -: Effect of being Licensed by State. Where a foreign corporation, authorized to issue benefit certificates, issues a certificate payable to a person not within section 7109, Revised Statutes 1909, the fact that such corporation has received the statutory authority to do business in this state as a fraternal beneficiary association will not relieve it from the operation of section 6945, making the defense of suicide unavailable to life insurance companies.
4. -: -: -: -: “Legal Representative” Construed. The. words “legal representatives,” in a certificate issued by a foreign corporation authorized to issue benefit certificates', which recites ■ that the amount thereof shall be paid to “legal representatives, related to the member as ... ” do not include any of the persons specified in section 7109, Revised Statutes 1909, providing that death benefits shall be paid to the families, heirs, blood relatives, affianced husband or wife of, or to persons dependent on, the member, but mean the executor or administrator of the member, and the liability of the corporation is that of a life insurance company, under section 6945, making the defense of suicide unavailable to life insurance companies; the omission to strike out from the certificate the printed words “related to the insured as ... ” not being the expression of an intention that the “legal representatives” should be related to insured in some one of the authorized classes.
Dissenting Opinion by REYNOLDS, P. J.
5. -: -: -: -: “Legal Representative” Construed. Where a foreign corporation, organized as a fraternal beneficiary association and licensed to do business as such in this state, issued a certificate payable on the death of the member to his legal representative, the term “legal representative,” interpreted according to the laws of this state, under which the certificate was not assignable and its proceeds would not go into the estate of decedent but to some one of blood kin, to the heirs, or to the affianced husband or wife, and interpreted also according to the objects of the society, as set out in its by-laws, viz.: “to bestow substantial benefits among the family, widow, heirs, blood relations and such others as may be permitted by the laws of the state wherein this brotherhood shall operate," meant such persons as could lawfully become “legal representatives” in a certificate of that kind, under the laws of this state, and hence the certificate was not of a character not authorized by section 7109, Revised Statutes 1909.
6. -: -: --: -: Effect of being Licensed by State. The question of the right of a foreign corporation to transact business in this state as a fraternal beneficiary association is, in the first instance, committed to the administration, discretion and control of the Superintendent of Insurance, and where he has issued a certificate to such corporation to transact such business, the courts should not lightly ignore it.
7. -: -: Suicide Statute: Applicable only to Insurance Companies. Section 6945, Revised Statutes 1909, making the defense of suicide unavailable to life insurance companies, is not applicable to fraternal beneficiary associations nor to any bnt life and accident insurance companies proper.
8. -: -: -: -. Fraternal beneficiary associations cannot, by transcending their powers, impose upon themselves and the certificates they issue a character which the law not only does not give them but expressly prohibits them from assuming, and hence such an association is not subjected to the provisions of section 6945, Revised Statutes 1909, which applies only to life and accident insurance companies, by reason of the fact that it issues, or is by its charter authorized to issue, certificates of a character not contemplated by section 7109, Revised Statutes 1909.
Appeal from Warren County Circuit Court. — Hon. James D. Barnett, Judge.'
Affirmed and certified to Supreme Court.
Ball & Sparrow for appellant.
(1) Our insistence is that the portions of section 1408, R. S. Mo. 1899 and of section 3 of the laws of Iowa merely designating the persons to whom benefit certificates may be made payable, are no part of the definition of a fraternal benefit society under either statute. To determine whether or not appellant is a fraternal benefit society the only inquiries to be made are, whether it is a corporation or voluntary association organized and carried on for the sole benefit of its members, and not for profit; whether it has a lodge system with ritualistic form of work and representative form of government; whether provision is made for the payment of benefits in case of death, or in case of sickness, temporary or permanent physical disability, either as a result of disease, accident or old age, and whether the funds from which benefits and expenses are paid are derived from assessments or dues collected from its members. If all of these things are found to be true then appellant is a fraternal benefit society. Westerman v. K. of P., 196 Mo. 670; Loyd y. Woodman, 113 Mo. App. 19; Armstrong y. Modern Brotherhood, 132 Mo. App. 171. Being a fraternal benefit society, therefore, and it being admitted that Leek committed suicide, respondent cannot recover in this action. Morton v. Royal Tribe of Jos., 93 Mo. App. 78; Brasfield v. M. W. A., 88 Mo. App. 208; Hudnall v. M. W. A., 103 Mo. App. 356; Shotliff v. M. W. A., 100 Mo. App. 138. (2) The very object and purpose of fraternal insurance is to provide a support for the family of the insured. The words “legal representatives,” when used in a benefit certificate of this kind, should, therefore, not be given a construction which will thwart the very purpose of the law. That the words “legal representatives” have Tost much of their original distinctive force and are now used to describe either executor and administrator, heirs or descendants, and next of kin or dis-tributees, is abundantly supported by the authorities. Warnecke v. Lembea, 71 111. 91; In re Cordrad’s Estate, 89, la. 396; Schultz v. Ins. Co., 59 Minn. 309; Allen v. Stovall, 94 Tex. 618; Masonic Relief Assn. v. Mc-Aveley, 2 Mackey, 70; Leonard v. Harvey, 71 N. Y. Supp., 546; Robinson v. Hurst, 78 Md. 59; Hodge’s Appeal, 8 W. N. C. 209; In re Riesenberg, 116 Mo. App. 308; Elstroth v. Young, 83 Mo. App. 253; Ewing v. Shannahan, 113 Mo. 188; Loos, Guardian v. Life Ins. Co., 41 Mo. 538. (3) Leek was the certificate holder, and, because of section 1418 Revised Statutes 1899 respondent (his administrator) would be compelled to pay the amount of said certificate to the very persons named in section 1408, as beneficiaries, viz., to Leek’s heirs. This proposition is well established by the following authorities: Grand Lodge A. O. U. W. v. Dister, 77 Mo. App. 608; Beall v. Graham, 125 Mo. App. 38; Rose v. Wortham, 95 Tenn. 505; Harvey v. Harrison, 89 Tenn. 470. (4) Conceding, for the sake of argument, that the charter powers of the appellant enabled it to write policies in Iowa which are ultra vires its Missouri authority, can this fact be invoked by respondent to wrest from appellant a substantial defense in this action? It would certainly not lie in appellant’s mouth to make the same plea in this case in order to avoid its liability upon the policy. City v. Davidson, 102 Mo. 149; Cass Co. v. Ins. Co., 188 Mo. 1. Since estoppels are mutual, the beneficiaries under the certificate cannot be heard to allege that the appellant is an outlaw company. Herman on Estoppels, etc., par. 719, p. 848.
Emil Roehrig for respondent.
(1) The defense of suicide is not available where it does not appear that the deceased contemplated suicide at the time of taking out the policy of insurance. Section 7896, It. S. 1899. (2) This appellant has failed to avail itself of the benefits and exemptions accorded fraternal beneficiary associations which come within the descriptions of such associations defined by section 1408, R. S. 1899, because of its failure to comply with the terms of sections 1408-1410, R. S. 1899. Dennis v. M. B. A., 119 Mo. App. 210; Pauley v. Modern Woodmen, 113 Mo. App. 473; Herzberg v. M. B. A., 110 Mo. App. 328; Baltzell v. Modern Woodmen, 98 Mo. App. 163; Brasfield v. Modern Woodmen, 88 Mo. App. 208. (3) Appellant is not a fraternal' beneficiary association as defined" by the laws of the State of Missouri. R. S. 1899, secs. 1408 to 1410 inc.; State ex rel. v. O’rear, 144 Mo. 157; Baltzell v. Modern Woodmen, 98 Mo. App. 153; Dennis v. M. B. A., 119 Mo. App. 210; Bacon, Ben. Societies, sec. 399; Herzberg v. M. B. A., 110 Mo. App. 328; Bransfield v. Maccabees, 92 Mo. App. 102; Brasfield v. M. W. A., 88 Mo. App., 208; McDonald v. Life Ass’n., 154 Mo. 618; Aloe v. Life Ass’n., 164 Mo. 675; Logan v. Fidelity & Casualty Co., 146 Mo. 114. (4) The contract made between appellant and the respondent’s intestate, Walter L. Leek, is not such a contract as is intended to be covered by and protected by the provisions of the Missouri law relating to fraternal beneficiary associations. R. S. 1899, secs. 14Ó8-1410 inc.; Herzberg v. M. B. A., 110 Mo. App. 328; State ex rel. v. O’rear, 144 Mo. 129; Toomey v. Supreme Lodge K. of P., 147 Mo. 129. (5) The term “legal representative” in the. common use of the words and in its ordinary meaning and signification is a term equivalent to “executor” or “administrator.” 25 Cyclopedia of Law and Proc., p. 177; Herzberg v. Modern Brotherhood, 110 Mo. App. 328. The meaning of the term in a particular case depends upon and is controlled by the context and the intent with which it is used, as well as by the existing state of things and the relative situation of the parties to be affected. 25 Cyclopedia, p. 177; Loos v. Life Ins. Co., 41 Mo. 538.

Opinion:
CAULFIELD, J.
This is an action brought by an administrator to recover the amount, with interest, of what plaintiff calls a life insurance policy and defendant calls a benefit certificate issued by a fraternal benefit society, for one thousand dollars. The plaintiff had judgment and defendant has appealed. The policy or certificate was issued to plaintiff's intestate, Walter L. Leek, and was payable to his "legal representatives, related to the member as . . ." Defendant admits all matters essential to a recovery by the plaintiff and relies solely for its defense upon the fact that the insured committed suicide, there being a stipulation in the application made by the insured, as well as in. the by-laws of the defendant at the time the certificate was issued, that in that event the certificate would be void. It is conceded that the deceased came to his death by suicide, but there is no showing that he contemplated suicide at the time he made Ms application. In the absence of such showing, section 6945 of the Revised Statutes 1909, makes the defense of suicide unavailable to the defendant, unless, as it contends, it is, as to the certificate here sued upon, entitled to claim the exemption accorded to a fraternal beneficiary association by section 7109, which provides, among other things, that "payments of death benefits shall be to the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon, the member. Such association shall be governed by this article, and shall be exempt from the provisions of the insurance laws of this state."
The defendant is an Iowa corporation, doing business in this state by certificate from the secretary of state, as provided by our statute. By the laws of Iowa, under which defendant was organized, defendant is authorized to issue benefit certificates to the "husband, wife, relative, legal representative, heir or legatee of such member." The insured in his application for the certificate sued upon, designated, as the beneficiary, his "legal representatives." The certificate states that its amount "shall be paid to legal representatives, related to the member as . . ." It will thus be noted that not only is the defendant authorized by the laws of Iowa to issue benefit certificates to a class not authorized by our law, i. e. legal representatives, but in this ease it exercised- that power within the confines of this state by making the certificate here sued upon payable to the "legal representatives" of the insured. The only question is whether, having issued a certificate not authorized by our statute, it can still claim the exemption which our statute grants as a special privilege to those doing the kind of business prescribed. We have concluded that it cannot. There are different classes of insurers under our statutes. Some have the privilege of doing a more general business than others and are therefore more heavily burdened by having read into every policy they issue section 6945 of the Revised Statutes of 1909, which forbids the defense of suicide except upon the showing prescribed. Others, fraternal beneficiary associations, are allowed to do only a restricted insurance business, being limited to issuing policies or certificates to "the families, heirs, blood relatives, affianced husband or affianced wife of, or to persons dependent upon the member." Because of this and other limitations, they are specially privileged, by being exempted from the general insurance laws. If their operations are not so limited, then they are not so privileged. It is only "such associations" — i. e. those of the character and observing the limitations described in section 7109 — that enjoy the privilege of being exempted. An association may be a fraternal society, with lodge system, ritual, etc., but if it is issuing policies of a character not authorized by the statute, it is not entitled to the special privileges given by the statute. [State ex rel. v. Vandiver, 213 Mo. 187, l. c. 197, et seq., 111 S. W. 911.] "It is not the nature of the society, but the terms of the contract in suit which determines whether its exemption from the general statute shall apply in that case;" and if it executes a contract which the statute does not authorize it to execute, it is, as to such contract, not entitled to the exemption. [Wilson v. Amer. Benevolent Assn., 125 Mo. App. 597, 103 S. W. 109.] Thus, in Toomey v. Supreme Lodge, 147 Mo. 129, 48 S. W. 936, as construed by our Supreme Court in State ex rel. vs. Vandiver, supra, l. c. 199, "it was hqjd that the defense of suicide was unavailing because, although the defendant was a fraternal beneficiary society, yet the policy sued on was an old-line policy of life insurance and therefore subject to the general statute, and the defendant was liable as an old-line company would be;" and in Aloe v. Fidelity M. Life Assn., 164 Mo. 675, 55 S. W. 993, as likewise construed, "it was held that although the defendant was chartered to do business only on the assessment plan, yet the policy it had issued in that case was not on that plan but on old-line policy, and therefore. the defendant was held liable as an old-line company." And the Kansas City Court of Appeals has held three times (twice in cases involving this very defendant) that a benefit certificate made payable to the "legal representatives" of the insured is without the exemption allowed to fraternal beneficiary associations under section 7109. [Herzberg v. Modern Brotherhood of America, 110 Mo. App. 328, 85 S. W. 986; Wilson v. American Benevolent Assn., 125 Mo. App. 597, 103 S. W. 109; Kroge v. Modern Brotherhood of America, 126 Mo. App. 693, 105 S. W. 685.] These cases are directly in point on the question here involved, and we approve the conclusions reached in them. In doing so, we see no necessity and have no inclination for departing from our conclusion in the case of Armstrong v. Modem Brotherhood of America, 132 Mo. App. 171, 112 S. W. 24. In that case the beneficiary named was within the classes permitted by our statute and the contract before us was fully authorized by the statute. There was no attempt there, as there is here, to issue a contract which is not exempted from the suicide provision of the insurance' laws. In that case, the contract was of the privileged class. In this one it is not. We held there that the limited authorized class was privileged by being exempt. We hold here that the unauthorized class is not privileged.
Nor can the fact that the defendant has received the statutory certificate of authority to do business as a fraternal beneficiary association affect the matter. [Herzberg v. Brotherhood, supra.]
We are not impressed by the suggestion that the designation "legal representatives" must be construed to mean, not the executor or administrator of the insured, but some one of the classes authorized by our statute. The words "legal representatives" must be construed to mean "executors _ or administrators," in the absence of anything showing a different intent. [New York Life Ins. Co. v. Kansas City Bank, 121 Mo. App. 479, 97 S. W. 195; Walker v. Peters, 139 Mo. App. 681, 124 S. W. 35.] Here, there is a total absence of anything showing such different intent. There is not even a suggestion that the insured had any family, heirs, blood relatives, affianced wife, or dependents. There is nothing disclosed concerning him, except that he was a young man twenty-two years of age. The only expression disclosed of his desire in the premises is contained in the application to the effect that the beneficiary should be his "legal representatives." The omission to strike out from the certificate the words "related to the insured as . . ." can hardly be considered an expression of an intention that the "legal representatives" should be related to the insured in some one of the authorized classes. It is plain that these word's and blank were part of the printed form and were left unerased through mere inadvertance. This is altogether too meagre a circumstance, if any at all, to justify an interpretation avoiding a contract which should be liberally interpreted in favor of the insured.
The judgment is affirmed. Nortoni, J., concurs. Reynolds, P. J., dissents, and as he deems the decision rendered herein contrary to the decision of the Supreme Court in Westerman v. Supreme Lodge Knights of Pythias, 196 Mo. 670, 94 S. W. 470; State ex rel. v. Vandiver, 213 Mo. 187, 111 S. W. 911; Loos' Guard. v. John Hancock Mut. Life Ins. Co., 41 Mo. 538, and Ewing v. Shannahan, 113 Mo. 188, 20 S. W. 1065, the case will be certified to the Supreme Court, in obedience to the constitutional mandate, for final determination.