
    MRS. JAMES A. PITZGERALD, ET AL., versus BENEVOLENT KNIGHTS OF AMERICA OF LOUISIANA
    NO. 8324
    COURT OF APPEAL, PARISH OF ORLEANS
    VaillAIi A. BEIL, JUDGE.
    November 13, 1922.
    
      
    
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Uta, Swea A, Fitzgerald, 'beneficiary under a qertaih'benefit policy in the Grand lodge Benevolent Knights ef .America of* Bauisiana,. made• defendant .herein,, brings suit against said, defendant to reoover the sum of §850,00, an amount which she claims has aoorued. to her as beneficiary on the life of her-son, Henry M. Fitzgerald., who died in Hew Orleans on the 18th day of October, 1918, and who held a beneficiary certificate, Ho. 16049 la.” in the defendant association, for the maximum sum of $600.00, said polioy being dated February 7th, 1917. It provides that in the event of death after IS and before 34 full months of - oonseoutive membership, there shall be due half of the face value of the certificate, which in this case, is $360.0,0, the amount sued for.

Under the facts of this case, the pertinent olause of the policy or certificate reads as follows:

"The monthly rate payable by a member holding this Certificate, shall be the rate -at the nearest year of age of entry, and is due' and payable in advance on the first day of each month to the Secretary of the Bodge in which said member has his membership, or direct to the office of the Grand Bodge. Unless such monthly rate is paid on or before the first day of the month following that on which it is due and- payable, the said member shall stand suspended from any ■ and all benefits hereunder. The said member may be reinstated within Bixty days by payment of amount due and furnishing certificate of good health."

It is alleged in plaintiff's petition that at che time of the death of ber son, Henry M. Fitzgerald (the insured) , he was a member in good standing in the defendant association, and had been so for 30 full consecutive months from and after the issuance of said certificate; that during the course of Fitzgerald's membership in the association, on many occasions he had made payment of various monthly rates or premiums due under the cercifioate of insurance sued .upon long after the due date of said payment had passed, the due dates and the payment dates being set forth as follows:

June, 1917 Assessment $1.16 Paid on July 16th, 1917 July, 1917 " 1.16 " ” Aug. 30th; 1917 August, 1917 Assessmént ti.15 Sept., 1917 " 1.15 Oot., 1917 " 1.15 Kóv., 1917 " 1.15 Deo., 1917 " 1.15 Jan., 1918 " 1.15 •Feb., 1918 " 1.15 March, 1918 " 1.15 April, 1918 " 1.15 May, 1918 " 1.15 June, 1918 n 1.15 July, 1918 " 1.15 EaicL on September " " Kovember " " Kovember " " December " " January " " March " " March " " April " "• May " " June " " August " " August 14th,1917 17th,1917 30th,1917 14th,1917 lgth.1918’ gth,1918 8th,1918 11th, 1918 12th,1918 14th,1918 10th,1918 10th,1918

It is further alleged that none of said payments as above detailed was accompanied by a certificate of good health, nor was demand made by the defendant corporation upon the insured for a certificate of good health at the time of eny of said payments, and that in fact, no such certificate was furnished; that on October 15th, 1918, the insured caused to be paid to the subordinate Secretary of the Dodge the sum of,¿3.45, an amount sufficient to cover the monthly rates or premiums for August, September, and October of the year Í918; that at the time of said payment the insured was ill with cold and fever, and that the amount tendered.was duly accepted by the Secretary of the Dodge and credit given the insured on his Member's Receipt Booh, but that same was returned to him the next day by registered mail with the written statement that the Secretary of the Grand lodge refused to accept the money. Annexed to and made part of the petition are four exhibits, among them’ the registered letter received by the insured from the Secretary of the lodge of which he was a member. Ihe letter reads as follows:

Hew Orleans, la..October 16/18.
Mr. Henry Fitzgerald:
Your dues and notice of illness received, and beg to state that I have notified the Grand lodge of your illness, but beg to inform you that 'I cannot give a week1s relief, as your relief only states when the secretary of your lodge is notified, and if I violate the rules of the order I am likely to get into trouble.
As you are now two months in arrears, I do not believe that the Grand Secretary will receive these dues and put you in good standing until you report well.
In view of these facts, I am una'ole to say whether you will get any relief, hut will take up the matter with the Grand lodge at once.
trusting you will recover from your present illness'shortly and that everything may he adjusted, I remain,
Yours fraternally,
(Signed) John J. Grasser, Secretary.
The Grand Secretary refuses to take the •money due to your being sick. The enclosed notice- explains itself.
The Grand lodge Secretary refuses to accept any money from you until you report well. After being well, and you desire to be ieinstated, you may fill out the enclosed blank and return same to me, with dues payable including current month.

It is claimed in the petition that the refusal of the Secretary of the' Grand lodge to accept the sums paid was unwarranted and wholly without effect upon the membership of the insured in the association, and that by the association's systematic conduct in accepting payments of monthly dues long after due dates without exacting a certificate of good health ■In conformity with thg paragraph of the certificate of insurance hereinabove quoted, that the association lost the right to suspend the insured from membership or to deny him the benefits accruing to him or his named beneficiary, the insured having been justified by the aforesaid conduct of the association to assume that he would continue in good -standing although his payments had been delayed. Claiming estoppel against the association for these reasons, plaintiff, as beneficiary, sues for the jBaount above stated, alleging amicable demand upon the association without effeot.

There is no contention as to the acceptance by the Association of the delayed premiums or monthly payments -as above stated.

The defendant answers by admitting the issuance of the certificate in question to the party named and for the benefit of the plaintiff herein, avers that if any payments vrere made on the days alleged in the plaintiff's petition that same were made when the insured was in good health, further answering, defendant alleges that the insured ceased'to he a member in gooa standing on September 1st, 1918, because of the fact that his dues for the month of August had not been paid. It further alleges that on October 15th,' the insured made no payment of dues to the Seoretary of the lodge, but that the sum of §3.45 was left at the residence-of the Secretary with the wife of the Secretary by the mother of the insured, the beneficiary herein, and that as soon as. the Seoretary of the lodge ascertained that Eitzgerald was ill, which was the next day thereafter, or the 16th of October, 1918, the amount was returned to him by thé Secretary of the lodge in which the insured held membership, end in fact never reached the Grand lodge of the Benevolent Enights of America of louisiana, the party made defendant herein.

It is further alleged that when the money v/as left at the residence of the Secretary of the lodge, the insured's mother reported him as having been sicfc for several days, and that he never recovered from the illness from which he v/as suffering October 16th, but that he died from the effects thereof on Oo-tober 18th, 1918.

At the trial of this cause, the defendant's counsel objected to the introduction of any evidence in support of plaintiff's claim on the ground that, under the allegations of the petition, no cause of action was disclosed, the said allegations negativing any liability to the plaintiff under the terms of the policy made part of the petition. The Trial Court toot time' to consider the exception and objections so made, and ultimately overruled the same, as we thirds: rightly.

The question involved in this oase is one of law, the facts adduced being practically out of dispute or discussion, unless it be as to the fact of the insured's health during the tender and. acceptance of delayed payments pr premiums. SCiie record does not show whether the Insured was in good health at the time of the acceptance hy the' association of. the deferred payments, and we are of the opinion.that such an issue is immaterial because of the undisputed waiver by the association/of the conditions of the.clause in the certificate as above quoted,

We-find as a fact that the many defaults of the insured in prompt -payment of premiums as they respectively fell due was in no instance but the last, to wit the payment, made on October 15th, 1918, in any way questioned hy the association, nor did it attempt to suspend the insured member fro* any of the benefits set forth under the certificate, nor did it Insist.upon or cause to be furnished to it a oertifloate of good health, from the insured as a condition to reinstatement heeau.se of the defaults made by him.

Ihe testimony of the Grand lodge Secretary ■shows the association to have been rather indifferent to the enforcement of the letter of the contract, and that it-was-the association's frequent custom to.receive delayed payments without a subsequent forfeiture, and without the requirement: of rein-, statement by health certificate. On cross-examination this officer was examined in part as follows:

how, in your capacity as Grand Secretary, do you follow up these delinquent notices to discover when the application for reinstatement has been formally made, accompanied by health certificate in each case?
A. She health certificate is not required of a member who owes less than three months in arrears.
Q. Is that the rule of your Order?
A. It is.
Q. 'Jill you show me that? Have you a copy of your rules?
A. So.
Have yon. any in existence?
Ho, it is a matter of business administration in the office. It is an act of grace or a practice that inures to the benefit of the member.
Hot a part of the insurance oontraot?
Ho»
The oontraot of insurance reals to the contrary?
Possibly it does.
Don't you know it does?
Yes.

The record facts in this case as well as the testimony of the officers of the defendant -association, clearly establish a course of conduct on the part of the defendant whereby it gave the insured the right to believe that delayed payments would not operate as a forfeiture of his Insurance. The course of conduct as between the defendant and the insured both in respect to the place as well as the time of payment was undoubtedly variable, and the testimony above quoted further shows that the association had a custony not only observed in the instant ease, but generally, to indulge its members. The fact that the-deceased's mother notified the- association at the moment of payment through such parties as were authorized to accept the payment, shows the good faith of the insured, and no intention of his nor of his mother, who made the payment, to oonoeal the fact of his illness, which ultimately resulted-in his death. The case is .free from fraud on both sides, and the authorities in this State as well as under the jurisprudence of the Supreme Court of the United States, establish an almost unbroken .rule of estoppel against the assurer in oases .of this nature.

In the case of Knickerbocker life Insurance Company v. Horton, 34 D. Ed. 689, the Supreme Court of the United. States pronounoed against the- forfeiture of a policy where conduct on the part of the insureror its agent had established a waiver of conditions of forfeiture stipulated in the-policy. In this oase the Court said in part:

"Forfeitures are not favored in the law. They are often a means of great oppression and injustice, and, where adequate compensation can he made, the law in many oases, and equity in all oases, discharges the forfeiture upon such compensation being made.
It is true we have Reid.***** that in life, insurance, time of payment is material, and cannot he extended hy the'oourts against the assent of the company. But where such assent is given, the Court should he liberal in oonstruing the transaction in favor of avoiding forfeiture.
The case of lease is not. without analogy, to the present case. It is familiar law that when a lease has been forfeited .any act of the landlord indicating a recognition of its continuance such as dis-training for rent of accepting rent which accrued after the forfeiture, is deemed a wafver of the condition."

Again, in the oase of Hew York Bife Insurance Company v. Eggleston, 24 1. Ed. 841, the Supreme Court of the United States, ¡reaffirming its oonolnsions in the above cited case said:

"Wo have recently, in the oase of Knickerbocker Life Insurance Co. v. Morton, shown that forfeitures are not favored in the law, and that courts are always prompt to seise hold of any circumstances that indicate an election to waive a forfeiture or an agreement to do so on which the party has relied and acted. Any agreement, declaration, or course of notion, on the part of an insurance company whioh leads a party insured honestly to believe that by conformity thereto, a forfeiture of his policy will not be incurred, followed by due oonformity on his part, will and ought to estop the company from insisting upon the forfeiture though it might be claimed under the express letter of the contract."- ,See also Hartford Life v. Unwell, 144 U.S. 439 (36 L. Ed. 496).

The dootrine of estoppel enunoiated in the shove authorities of the Supreme Court oannot be strengthened by further oomnent. We find it reiterated in many authorities of the Supreme Court of Bouisiana, particularly in the oase of Lawrence v. Penn Mutual Insurance Company, 113 La. 87; Gunther v. N.O. Cotton Exchange, Mutual Aid Association, 40 Ann. 778; N.L. Gutter v. Mutual Reserve Fund, 52 Ann. 1733.

In the ease of Kennedy v. Metropolitan Life Insurance Company, 116 La. p. 66, the Supreme Court of this State decided in recognizing forfeiture of a policy of life insurance, that as the contraer was not to take effect unless the first premium should have heen paid, the payment of that premium was in a measure found to he optional with the insured, and that it could not have heen said to he past due on the day upon wnioh the policy hore date. The doctrine of estoppel was declared inapplicable, although the Company, through the. agent, had accepted a second premium after it had become duo. The receipt in this particular case given for the first premium contained a stipulation that the acceptance by the Company at any time of a premium past due was to be taken as an act of grace and not a precedent or waiver of any of tne policy's conditions. This authority relied on by counsel for defendant in the case now before us, does not in any way qualify the consistent jurisprudence of our State, for th¡ reason that we do not consider the facts of the Kennedy cas. to be in any manner applicable to those now under consideration.

As was said by the Court itself in the Kennedy case: "Cases of this kind are determined mainly upon their facts." There was no stipulation in the settlements with nade by the insured that the defendant association either verbally or in writing, which would have carried with it a conclusion that the indulgence given the plaintiff was to be considered an act of grace by the Company and not a precedent or a waiver of any of the conditions or terms of insurance stipulated in the policy. Under the faots of this case, we are disposed to the view that the illness of the insured at the time of the last payment accepted by the association, could not have operated his suspension or prevented the effect of waiver already granted by the Company under its previous conduct, for under defendant's course of action, it distinctly approved and gave the plaintiff reason to believe that payments made after the due dates thereof would not cause a forfeiture of his insurance.

We think the ruling of the Trial Court is in conformity with the law, evidence and equity of this case, and that same should be affirmed. It is therefore ordered, adjudged and decreed that the judgment herein appealed from be, and the same is hereby affirmed, at defendant's cost in both courts.

JODSMEHT lOTIRMED.

November 13th, 1922,  