Court Opinion

ID: 7810260
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:12:02.895237+00
Date Added: 2024-06-11T16:30:27.095681
License: Public Domain

Wool, J. (on rehearing). Our attention for the first time is called to section 20 of act 462 of the Acts of 1917, which reads as follows: “The constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the law and constitution of the society, and the same shall be binding on the society and each and every member thereof and on all beneficiaries of members.” Act 462 is an act “pertaining to the regulation and incorporation of fraternal beneficiary associations, societies, or orders and other matters pertaining thereto.” The act is exceedingly comprehensive, and embraces within its terms both domestic and foreign fraternal beneficiary associations, societies, or orders, where its provisions, either by express reference or because of the character of such provisions, are alike applicable to both. In Acree v. Whitley, 136 Ark. 149, we held that a foreign fraternal benefit society coming within the definition of a fraternal society as set forth in the first section of the act was not subject to garnishment under section 21 of the act. We, therefore, held in the above case that section 21 of the act was applicable to foreign societies. In that case the society against which the writ of garnishment was directed was an Indiana organization. If section 21 is applicable to foreign societies, then section 20 is also applicable to such societies. Section 20 is couched in general terms which are applicable to foreign as well to domestic societies, and we therefore hold that such section is applicable to the appellant in this case. This would have been our holding in the original opinion if our attention had been drawn to the statute. The appellant, however, did not in the court below, nor in the elaborate brief filed by its counsel in this court, direct our attention to this provision of the statute, and we overlooked it. It is a part, however, of the statute law governing fraternal societies and must be given full force and effect in the final decision of causes to which it is applicable. Therefore, what we said in the original opinion concerning the authority of a subordinate body and its subordinate officers to waive any of the provisions of the laws and constitution of the society is retracted, and we now hold, in view of this statute, that it was not within the power of the local clerk of appellant to waive the payment of the March dues on or before the first day of April as required by the law and constitution of appellant. This provision of appellant’s laws and constitution under the provisions of section 20 of act 462, supra, was binding on the society and its members and the beneficiaries of members. The certificate in suit is an Arkansas contract, and is governed by the above statute. This conclusion, however, does not.change the result of our former holding, nor what we declared in the original opinion concerning the authority of the clerk of the subordinate lodge acting within the scope of his authority to bind appellant by his conduct, and to estop it from asserting a forfeiture of the policy. The well established rules of law applicable to principal and agent would estop appellant from denying, under the circumstances, that the dues for the month of March had been paid. It will be observed that the language of section 20 is a limitation upon the authority of the subordinate body and the subordinate officers or members to waive any of the provisions of the law and constitution of the society. The language can not be extended to coyer cases of estoppel where the society by a settled course of conduct on the part of its agent acting within the scope of his authority, has misled the member to his prejudice. Where such is the case, the society is liable not on the ground of waiver but on the ground of estoppel. “A waiver is an intentional abandonment or relinquishment of a known right.” Words and Phrases, p. 1222; 29 Am. & Eng. Enc. of Law, p. 1091; also see 40 Cyc., p. 255 “C” and cases there cited; Law of Waiver, Bowers, sec. 1, p. 19. “Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property' of contract, or of remedy, as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right, either of property, of contract, or of remedy.” 2 Pomeroy’s Eq. Jur., sec. 804; Words and Phrases, p. 336. These• terms, “waiver” and “estoppel,” though often used interchangeably with reference to insurance contracts, are really distinguishable and that distinction must be observed in construing the language of section 20. An illuminating case showing the distinction between waiver and estoppel is that of Sovereign Camp Woodmen of the World v. Putnam, 206 S. W. 970-2. In that case the Court of Civil Appeals of Texas had under consideration a section of the laws and constitution of this same order, similar to the section under review here. Special Judge Chilton, in an able opinion, voicing the unanimous decision of the court, among other things, says: (3) “The terms, ‘waiver’ and ‘estoppel,'’ are often used indifferently in the same sense as if they were interchangeable terms; but there is a distinction which it is' often important to keep in mind. Waiver presupposes a full knowledge of a right existing and an intentional surrender or relinquishment of,that right. It contemplates something done designedly or knowingly, which modifies or changes existing rights, or varies or changes the terms and provisions of a contract; but not so with estoppel. “Waiver is the voluntary surrender of a right; estoppel is the inhibition to assert it from the mischief that has followed. Waiver involves both knowledge and intention; an estoppel may arise where there is no intention to mislead. * * * Waiver involves the acts and conduct of only one of the parties; estoppel involves the conduct of both. A waiver does not necessarily imply that one has been misled to his prejudice, or into an altered position; an estoppel always involves this element. , * * * Estoppel arises where, by the fault of one party, another has been induced, ignorantly or innocently, to change his position for the worse in such manner that.it would operate as a virtual fraud upon him to allow the party by whom he has-been misled to assert the right in controversy. ’ ’ 40 Cyc., pp. 256, 257. (4) “The principle of estoppel in equity stands upon the very foundation of right and fair dealing. It considers and weighs the conduct of men in their dealings with each other, and gives that effect and meaning to their actions which common sense and justice dictate. A fraternal insurance association, such as appellant, is as much subject to the operation of its principles as any other association of persons or as an individual.” See also Libbey v. Haley, 91 Me. 331, 39 Atl. 104. In 2nd May on Insurance, section 361, it is said that, “Forfeitures are so odious in law that they will be enforced only where there is the clearest evidence that such was the intention of the parties. If the practice of the company and its course of dealings with the insured and others known to the insured have been such as to induce a belief that so much of the contract as provides for a forfeiture in a certain event will not be insisted on, the company will not be allowed to set up such a forfeiture, as against one in whom their conduct has induced such belief. ’ ’ This doctrine of equitable estoppel is as applicable to fraternal societies as to old line companies. Now here there was something more than a single act of the local clerk in not collecting the dues of Newsom on or before the first of each month. The clerk through a period of years had adopted the method set forth in the original opinion which was clearly calculated to induce the belief upon the part of Newsom that his dues had been paid according to the method adopted by the local clerk for collecting the dues and reporting the same, and that the society had accepted such payments and would, therefore, not insist upon a forfeiture because of the failure of the clerk to comply, in this respect, with its laws and constitution. This conduct of appellant’s agent under the authorities above cited clearly estops appellant from denying that the March dues were paid as required. The above case of Sovereign Camp Woodmen of the World v. Putnam is also excellent authority for the doctrine announced in the original opinion that the local camp clerk, in the matter of collecting the assessments and dn.es, the reporting of same, and the standing of members, was the agent of the sovereign camp. To the same effect, see Knights of Maccabees of the World v. Johnson, 185 Pac. Rep. 82; Modern Woodmen of America v. Asa Colman, 64 Neb. 162, 89 N. W. 641; Grand Lodge of United Brothers of Friendship and Sisters of the Mysterious Ten v. Carroll, 174 Pac. (Okla.) 767. The motion for rehearing is therefore overruled.