Court Opinion

ID: 3880490
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:12:07.285981+00
Date Added: 2024-06-11T13:36:41.342347
License: Public Domain

February 29, 1922. The opinion of the Court was delivered by
This action was commenced on the 25th day of May, 1920, and is for the recovery of $1,000 on a certificate, issued by the defendant to Troy E. Weathers, on the 29th day of June, 1916, for the benefit of D.Y. Weathers, the plaintiff. The appeal is from an order directing a verdict in favor of the defendant.
Troy E. Weathers was suspended for failure to pay his monthly dues for December, 1919, and January, 1920, but he was reinstated on the 3d day of February, 1920. The dues were sent by the insured to the clerk of the local camp, in a letter dated the 2nd day of February, 1920. *Page 409 
The local clerk sent him a receipt for the dues, and a notice that he had been reinstated, in a letter dated the 3d day of February, 1920. The insured was reinstated on the books of the local camp, and on the 7th day of February, 1920, the local clerk forwarded his report to the clerk of the Sovereign Camp, stating that the insured had paid all his dues on the 3d day of February, 1920, and that he had been reinstated as a member. The defendant claims that the letter sent on the 7th of February, 1920, was not received until the 17th day of that month, after the death of the insured, who died on the 15th of the month.
There was testimony to the effect that the Sovereign Clerk not only received the dues for the months of December, 1919, and January, 1920, but also for the month of February, 1920, after the death of the insured. There was no offer of the part of the defendant to return the dues, either for the months of December or January or February — the last mentioned being paid on the 10th of March, after the death of the insured. On the 2d of March, 1920, notice of the insured's death was sent to the Sovereign Camp. On the 17th of May, 1920, the defendant was notified by the attorneys of the plaintiff that the claim under the said certificate had been placed in his hands for collection, to which the defendant made no reply. The receipt contained this provision:
"If any of the sums herein receipted for are paid, for the purpose of reinstating the sovereign so paying, the same are received upon the express condition and agreement that they shall be held in trust for him, until all the requirements of the laws of the society in relation to reinstatement have been complied with; that the payment and the giving of this receipt shall not be a waiver of such requirements, and that he has no claim upon this society, until he has fully complied therewith." *Page 410 
On the 22d of June, 1920, after this action had been commenced, the defendant's attorneys sent to the clerk of the Court for Laurens County a check for $1.92, which did include all the dues paid to the defendant.
By consent the following certificate of Mrs. Pittman, a sister of the insured, was read to the jury:
"This is to certify that Mr. T.E. Weathers was taken sick at my house on the 8th day of February, 1920, and was sick eight days, and died on the 15th of February, 1920. He was taken with influenza and was sick six days, and on the 7th day he developed flu-pneumonia, and died on the eighth day of his sickness. He was in good health until he taken the influenza, and worked every day until he was taken sick."
At the close of all the testimony, the defendant's attorneys made a motion for the direction of a verdict.
The grounds of the motion, the order of his Honor, the presiding Judge, the plaintiff's exceptions, and Exhibit D, containing certain provisions of the constitution and by laws of the defendant, will be reported.
There are only two questions involved:
First. Was there error on the part of the Circuit Judge, in directing a verdict for the defendant, on the ground that the insured failed to file with the local clerk a written statement and certificate, signed and witnessed, that he was in good health, and warranting that he would remain so, for 30 days after payment of his dues?
Second. Was there error in the refusal to submit to the jury the question of waiver?
Section 2755 of the Code of Laws, 1912, is as follows:
"No subordinate body or any of its officers or members, shall have the power or authority to waive any of the provisions of the laws and constitution of the association, and the same shall be binding upon the association, and each and every member thereof and their beneficiaries." *Page 411 
Section 2770, Id., contains these provisions:
"When any fraternal insurance or beneficiary society, order or association of this or any other State, province or territory, now or hereafter operating within this State, and having lodges, councils, chapters, branches or subordinate or branch offices duly established and organized in this State, and when under the laws, rules or regulations of such said society, order or association, members of the same are required to pay or customarily and with the knowledge and consent of such said society, order or association, do pay premiums, dues, assessments, fines, or other payments to any other member or person for the purpose of transmitting or delivering the same to the general office, or to any division, subordinate or branch office of such said society, order or association, then such said member or person, by whatever name or title known and called, so collecting such premiums, dues, assessments, fines and other payments, shall be deemed and considered the agents of such said fraternal insurance, or beneficiary society, order or association."
The defendant in its answer alleges:
"That this defendant had no knowledge of the facts hereinabove set forth, until after the death of the said Troy E. Weathers, and that as soon as it discovered said facts, it offered to refund the amount that was paid to the local clerk, and, as evidence of its good faith, has deposited the amount thereof with the clerk of this Court, to be retained by him as a continuing tender, to be paid over to whomsoever the Court may direct."
Let us see if there was testimony which rendered it necessary to submit this question to the jury.
A.H. Walker, a witness for the defendant, testified as follows:
"I live at Kershaw. Am a mill man. Am overseer of the weave room. I lived at Columbia, and was clerk for *Page 412 
the Woodmen of the World there for six months. I was clerk the latter part of 1919 and the early part of 1920. I did not know Mr. Troy E. Weathers personally. He lived outside of Columbia. His mail came from Charlotte, N.C. As local clerk, I received the dues and assessments paid by the members from month to month — they were paid to me — I was the only officer who received the dues and assessments. Troy E. Weathers did not pay his assessments for December, 1919, by the 1st of January. He did not pay his assessment for January, 1920, prior to February 1st. He paid his assessment for December, 1919, and January, 1920, on February 3, 1920. He paid in the form of a money order — sent money order through the mail February 3d. He did not furnish me at any time with any written statement, signed and witnessed, that he was in good health, and warranting that he would remain in good health for 30 days after. I have the letter I received from Mr. Weathers that came with the money order (witness hands letter to counsel). Mr. Osborne offered in evidence letter from Troy E. Weathers to A.H. Walker, dated February 2, 1920, marked Exhibit E. This letter came in this envelope. I suspended Mr. Weathers on the December report, which I sent in; as near the 5th of January as possible, we sent in the report for December. I made a monthly report to the Sovereign Clerk. These reports showed when a member was suspended. (Report produced in evidence). I made out that report. I sent it to the Sovereign Clerk, Jno. T. Yates, at Omaha, Neb. I have the cash book of the local Palmetto Camp (book produced). If you will examine this book, you will observe assessments 12 and 1 on February 3d, in reference to Troy E. Weathers, Assessment 12 was for the month of December, 1919. Assessment No. 1 was for January, 1920. Mr. Osborne offered a page of the cash book in evidence, marked Exhibit G." *Page 413 
Exhibit G is as follows:
"Exhibit G. A copy of a page of the Palmetto camp clerk's cash book:
"February 3, 1920. Weathers, T.E. Old rate. Assessment No. 12, Sovereign Camp fund, $0.96. Camp dues $0.35. Total, $1.31.
"Assessment No. 1. Total, $1.31.
"March 10th. Weathers, T.E. Old rate. Assessment No. 3. Sovereign Camp fund, $0.96. Camp dues, $0.35. Total $1.31."
Exhibit F is as follows:
"North Charlotte, N.C., Feb. 2, 1920.
"Mr. A.H. Walker, Dear sir:
"Inclosed you will find 2 months' dues at old rates. Want you to write at once and explain No. 4 option to me. I don't quite understand it. These Woodmen of the World up here are not signing those papers, and I want toknow what I am doing before I do it. So, let me hearfrom you at once.
(Italics added.)           Yours as ever,
T.E. Weathers."
Continuing, the witness said:
"The entry dated March 10th is for monthly dues that came from Laurens. A check on the clerk of Court of Laurens County. Some one writing in the interest of D.Y. Weathers. I have not that report. He sent the monthly dues. On March 10th D.Y. Weathers sent a check from the clerk of the Court for $1.31. That was the March after his death. I think that check was cashed. I do not know what became of the proceeds of it. * * * After I received the money from Mr. Weathers on February 3, 1920, I made a report to the Sovereign Clerk. (Report introduced). This is January report No. 1. That was made February 7th. In that report I reported Mr. *Page 414 
Weathers reinstated. * * * In accordance with that, I notified the Sovereign Camp of his reinstatement so far as I was concerned. I marked Mr. Weathers suspended for the nonpayment of December dues on my report. On February 3, 1920, I received his December, 1919, dues and his January, 1920, dues, and marked him reinstated, and sent Mr. Weathers that receipt, notifying him that he had been reinstated. Afterwards, on March 10, 1920, I received from some one a check for $1.31 due for T.E. Weathers, old rate. I think the check was cashed, and I sent the money to the Sovereign Camp — if I remember correctly."
John T. Yates, a witness for the defendant, thus testified:
"I reside in Omaha, Douglas County, Neb. My occupation is Sovereign Clerk ex officio secretary of the Sovereign Camp of the Woodmen of the World; have held such position for the past 29 years continuously. My duties in respect to the defendant society are: I am the chief corresponding, recording, and accounting officer of the defendant — all remittances to the Sovereign Camp are made to me — camp clerks' reports are sent to me; death notices and correspondence with reference to death claims are delivered to me. * * * On February 17, 1920, I received the report from the clerk of the local camp, making a remittance for the said Troy E. Weathers, and also listing his name for reinstatement, but I did not receive this report until after the death of the said Weathers. When I was advised of the death of Weathers, I turned the matter over to D.E. Bradshaw, the general attorney of the defendant society, for investigation. I did not accept the remittance which accompanied the former report, but as soon as it could be reached in the regular course of business, it was held by me pending the investigation by D.E. Bradshaw, the general attorney on the question of liability." *Page 415 
D.E. Bradshaw, a witness for the defendant, testified as follows:
"I reside in Omaha, County of Douglas, State of Nebraska. I am the attorney general for the defendant, Sovereign Camp, Woodmen of the World, and have been such for nearly four years last past. Sovereign Clerk Jno. T. Yates referred to me the papers in reference to the death of Troy E. Weathers, for investigation. While I was continuing my investigation, suit was instituted. As soon as I determined that there was no liability because the member died within 30 days after his attempted reinstatement, I directed the Sovereign Clerk to return the money paid for December, 1919, and January, 1920, and any other assessments received by him. A check for this amount was sent to Bomar  Osborne, who had been selected to represent the defendant in the suit. * * * I do know that the remittance was not accepted, for the reason that it was held during my investigation to determine whether or not there was any liability, and as soon as I determined that matter and found there was no liability, I directed the money returned to whomsoever was entitled to it. In the meantime, suit had been brought, and it was necessary to notify the clerk of the Camp No. 759 that remittance had not been accepted. The remittance was not returned before the suit was instituted. That had been fully explained in the deposition of Jno. T. Yates, showing the condition of the office and inability of myself to determine whether or not there was any liability. It was returned as soon as we discovered there was no liability, but in the meantime suit was instituted."
There was no material difference between the facts as to the agency in the present case and Crumleyv. Sovereign Camp, Woodmen of the World, 102 S.C. 386,86 S.E. 954. In the latter case this Court considered Sections 2755 and 2770 of the Code of Laws *Page 416 
1912, and similar provisions in the constitution of the order, and used this language:
"From the foregoing sections of the Code of Laws, and the constitution of the order, which we have considered together, we have reached the conclusion that the clerk of the local camp was intended to be the representative or agent of the Sovereign Camp, with certain enumerated powers hereinbefore mentioned, especially those relating to the collection and transmission of such dues, as were required to be forwarded to the Sovereign Camp. That when said agent accepted dues from a suspended member, and placed his name on the list of those restored to membership, his action was obligatory on the Sovereign Camp, in the first instance, with power on its part, within a reasonable time, to review the action of the local clerk, if there was a substantial failure on his part, to comply with the requirements of the order. In this way alone, can force and effect be given to all the laws, governing the order."
The doctrine announced in that case was affirmed in the recent case of Watson v. Sovereign Camp, Woodmenof the World, S.C. 108, S.E. 145.
The defendant relied upon the case of Vant v. GrandLodge, K. of P., 102 S.C. 413, 86 S.E. 677. In that case there was a by-law of the order, which provided that —
"Any member living in a state of concubinage at the time of his death shall not be entitled to any benefits herein mentioned."
In the first place, the insured in that case did not possess the necessary qualifications for membership in the order, when his dues were received; and the agent was in no wise responsible for the disqualification. Therefore, the act of the agent was not prejudicial to the rights of the insured, except in so far as he received money for the purpose of allowing an applicant to become a member, in *Page 417 
violation of the by-laws. Furthermore, Section 2770 of the Code of Laws was not considered in the case, which was decided just after the Crumley case; and the writer of the opinion in the Crumley case, and also one other member who concurred with him concurred in the Vant case, which did not mention the Crumley case.
In the present case, the insured possessed all the qualifications for reinstatement as a member, upon certain conditions,with which he could have complied. The letter which he wrote to the local clerk, on the 2d of February, 1920, showed upon its face that the insured was desirous of complying with the requirements as to reinstatement. It was an act of wrong on the part of the local clerk to send him notice that his dues had been paid, and that he had been reinstated, without calling his attention to the other requirements for reinstatement. If the omission was intentional, it was a fraud upon the rights of the insured; if it was merely a mistake, then justice and fair dealing would not allow the defendant to profit by the errors of the person whom it had selected as its representative. This would be allowing the defendant to take advantage of its own wrong.
The following language used by this Court, in Williamsonv. Association, 54 S.C. 582; 32 S.E., 765; 71 Am. St. Rep. 822, is applicable to the present case:
"It is a well known fact that comparatively few people who become shareholders in such associations are familiar with their by-laws. They rely upon the honesty, integrity, and fair dealing of those who manage the affairs of the association. It is also a well known fact that the by-laws are frequently intricate and almost unintelligible to the average shareholder, and that those in charge of the affairs of the association usually become exceedingly expert in the interpretation of them, thus giving the association a decided advantage in the way of information over the shareholders. *Page 418 
Public policy, in order to prevent the perpetration of fraud, * * * demands that the defendant should not be allowed to elect whether it will be bound by its by-laws, * * * as to the time when the shares would mature."
So, also, is the following from Blackwell v. MortgageCo., 65 S.C. 105, 43 S.E. 395:
"The business of the company was such as necessarily compelled it to rely upon the work of other parties and this necessity usually and naturally gives rise to the employment of agents. When, therefore, this work is done by others, there is a strong implication that they are the agents of the parties receiving the benefit of their services."
In Sternheimer v. O.U.T.C. A., 107 S.C. 291,93 S.E. 8, the Court used this language:
"The facts of this case differentiate it from the case of Crumley v. Sovereign Camp, 102 S.C. 386,86 S.E. 954. In that case the clerk of the local camp, who was held to be the agent of the Sovereign Camp, accepted payment of the arrearages, and reinstated the member before his death. In this case the secretary-treasurer refused to accept them. Clearly, therefore there was in this case no waiver by the conduct of the secretary-treasurer in accepting payment of arrearages. To hold that the failure of that officer or of the local council to suspend delinquent members was a waiver would be to abrogate the constitution and by-laws of the order and the statute of the State."
There is no conflict between the two cases.
The defendant's attorneys also rely upon the case ofRabb v. N.Y. Life Ins. Co., 108 S.C. 137, 93 S.E. 711. That case involved the construction of Section 2712, Code of Laws 1912, which does not constitute a part of Article 3 entitled "Fraternal Benefit Associations," under which the present case arose. *Page 419 
There is another reason why it was error to direct a verdict in this case. There was testimony to the effect that the letter sent to the defendant was deposited in the postoffice on the 7th of February, 1920, and that it was not received by the defendant until the 17th day of February, 1920. There was a presumption that it was received by the defendant in due course of mail. The question whether the defendant failed to receive the letter before the expiration of 10 days should have been submitted to the jury. Lefkowitz v. Wharton,115 S.C. 330, 105 S.E. 704.
Reversed and remanded for new trial.
MR. JUSTICES WATTS and FRASER concur.