PEARSON v. KNIGHT TEMPLARS' & MASONS' LIFE INDEMNITY INS. CO. (St. Louis Court of Appeals. Missouri. Oct. 17, 1905.)

1. INSURANCE-MUTUAL BENEFIT INSURANCE -CONTRACT-CONSTITUTION AND BY-LAWS. A policy issued by a mutual benefit association, which contains on its back the constitution and by-laws of the association, and which declares that they shall form a part of the contract, makes the constitution and by-laws a part of the policy.

[Ed. Note. For cases in point, see vol. 28, Cent. Dig. Insurance, §§ 1854, 1855.]

2. SAME MODIFICATION OF CONTRACT -AUTHORITY OF ASSOCIATION.

A beneficiary association, doing an insurance business on the assessment plan, has no authority to materially modify the contract of insurance without the assent of the member.

[Ed. Note. For cases in point, see vol. 28, Cent. Dig. Insurance, § 1869.]

3. SAME INCREASE OF ASSESSMENTS.

A beneficiary association, issuing a policy of insurance pursuant to an application in which the assured agrees to abide by the constitution and regulations of the company "as they now are, or may be constitutionally changed hereafter," has no authority to materially increase the assessments, thereby increasing the cost of insurance, without the assent of the assured.

[Ed. Note. For cases in point, see vol. 28, Cent. Dig. Insurance, § 1855.]

4. SAME CONSTRUCTION OF CONTRACT.

The constitution of a mutual benefit association provided that policies might be issued on a basis of benefits ranging in amounts to $5,000 and all the money paid in assessments on the policy. It issued a policy which recited that, in consideration of the member's paying a specified sum and all assessments, the association would pay, after satisfactory proof of his death, to the beneficiary $3,000 and all money paid on the policy in assessments." Held, that the association agreed to pay on the member's death the face of the policy and all money paid in by him on assessments. 5. SAME

ASSESSMENTS-AMOUNTS.

The constitution of a mutual benefit association made $1,000 the unit of assessments. The association issued a policy for $3,000 and "all money paid on the policy in assessments." Held, that assessments paid in could not be assessed until they aggregated $1,000, and the basis for levying assessments could not be again raised until a second $1,000 had been paid in assessments.

Appeal from Louisiana Court of Common Pleas; David H. Eby, Judge.

Action by Erasmus D. Pearson against the Knight Templars' & Masons' Life Indemnity Insurance Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Appellant is a life insurance company, engaged in furnishing life indemnity to widows, orphans, relatives, and devisees of deceased members on the assessment plan, and, as such, is incorporated under the laws of the state of Illinois. On January 12, 1887, respondent, then 57 years old, and a resident of the city of Louisiana, Mo., made a written application to appellant for a policy of insurance on his life, which said written application contained the following language: "I further agree, if accepted, to

abide by the constitution, rules, and regulations of the company, as they now are or may be constitutionally changed hereafter." Appellant accepted respondent's application for membership and issued to him its policy, No. 2,724, for "three thousand dollars and all the money paid on the policy in assessments." One of the provisions of the policy is as follows: "It is further agreed that the constitution and by-laws printed on the back of this policy shall separately and collectively form and be a part of this contract."

Section 4 of article 4 of said constitution and by-laws, as printed on the back of said policy, is as follows:

"Upon the death of any member an assessment, increasing with age, shall be made upon the surviving members (provided an assessment is needed) according to the following table of rates. Said table is drawn for $1,000, which shall be the unit in determining all other amounts.

Years of age, inclusive, 66 and upward....2.55 "But no assessments shall be made so long as the money in the death fund will pay the maximum loss in full."

The above provision of appellant's constitution and by-laws continued in force until February 16, 1900, when the same was amended, constitutionally and regularly, so as to read as follows:

"Upon the receipt of proof, satisfactory to the board of directors, of the death of a member, an assessment, increasing with age, shall be levied upon the surviving members, provided an assessment is needed, according to the following table of rates; said table is drawn for $1,000, which shall be the unit determining all other amounts:

Years of age, inclusive, 21 to 30.

*

*

Years of age, inclusive, 66 to 70........

.$.50 2.55

71 and upward, the

amount which should be charged for each age according to the American Experience Table of Mortality, proportioned to the above rate for 66 to 70 years of age."

Respondent paid all assessments required of him as provided by the constitution and by-laws of appellant, until the same was amended as above set forth. At the date of said amendment respondent was 69 years of age, and, according to the constitution and by-laws in force at the time of becoming a member of appellant company, he was paying an assessment, on the death of each member. of $2.55 per thousand. Since the date of said amendment, however, appellant has,` on the death of a member, assessed respondent at the rate provided in the amended bylaw, which assessments respondent has paid under protest, claiming that the effect of said amendment, in providing that he be assessed

the amount "which should be charged for his age according to the American Experience Table of Mortality," instead of $2.55 per thousand, on the death of each member, as provided by the by-laws at the time he became a member, was to increase the cost of his insurance. By the increase in the amount of his assessments, plaintiff, up to the time of the commencement of the suit, had paid $253.05 more than his assessments would have amounted to under section 4 of the constitution of the defendant order, as it existed at the date of the issuance of the policy.

The court, to whom the issues were submitted, found for plaintiff and assessed his damages at $253.05, with 6 per cent. interest thereon from the date of the commencement of the suit, October 14, 1903. Defendant appealed.

Ball & Sparrow, for appellant. Pearson & Pearson, for respondent.

BLAND, P. J. (after stating the facts). 1. We quote the following from appellant's brief: "Appellant contends that as respondent agreed in his application that he would 'abide by the constitution, rules, and regulations of the company, as they now are or may be constitutionally changed hereafter,' and inasmuch as it was provided in respondent's policy 'that the constitution and bylaws printed on the back of this policy shall separately and collectively form and be a part of this contract,' and as the constitution and by-laws provided for their own change or amendment, thereby providing that the contract itself might be changed or amended, it has not violated respondent's rights. Appellant also contends that as respondent's policy, instead of being one for $3,000, is one for the 'sum of three thousand dollars and all the money paid on the policy in assessments,' and as his beneficiary would be entitled, at his death, not only to $3,000, but to all the money paid on the policy in assessments,' respondent should be assessed, on the death of each member, not only on $3,000, but, in addition thereto, on the sum of all assessments paid on the policy. Respondent sues in this action to recover the amount of said assessments claimed to have been in excess of $2.55 per thousand." That the constitution and by-laws printed on the back of the policy became a part of the contract of insurance by virtue of the following provision, written on the face of the policy, to wit, "that the constitution and by-laws printed on the back of this policy shall separately and collectively form and be a part of the contract," is unquestionably true. Laker v. Royal Fraternal Union, 95 Mo. App. 353, 75 S. W. 705; Richmond v. Supreme Lodge, 100 Mo. App., loc. cit. 19, 17 S. W. 736.

2. Respondent, in his application, made a part of the contract of insurance, agreed "to abide by the constitution, rules, and regulations of the company as they now are or may be constitutionally changed hereafter." Section 4 of the constitution was amended February 16, 1900, in a constitutional manner, and is binding upon the respondent, unless, without his consent, it materially modified the contract of insurance. It is conceded that the amendment increased respondent's assessments, but it is insisted by the appellant that respondent agreed in the contract of insurance that this might be done. This contention is founded on the clause in the policy whereby respondent agreed to abide by the constitution, rules, and regulations of the company as they were at the date of the policy or as they might be constitutionally changed in the future. It has been repeatedly held by this court that a contract of insurance made with a beneficial insurance company cannot be materially modified or changed, without the express assent of the insured. Grand Lodge of the A. O. U. W. of Mo. v. Sater, 44 Mo. App. 445; Sackberger v. Grand Lodge I. O. T. L., 73 Mo. App., loc. cit. 42; Smith v. Supreme Lodge K. of P., 83 Mo. App. 512; Morton v. Supreme Council, 100 Mo. App. 76, 73 S. W. 259. In the case of Morton v. Supreme Council, supra, at pages 91 and 92 of 100 Mo. App., page 264 of 73 S. W., it is said: "But there are numerous well-considered opinions in which it is ruled that subsequent by-laws undertaking to reduce the amount to be paid in certain contingencies do not take effect on previous contracts, and that a stipulation to comply with future regulations means the member will comply with such as relate to his duties as a member, but does not mean that the society may interfere with the essential purpose of the contract, namely, the indemnity covenanted to be paid. Hysinger v. Supreme Lodge, 42 Mo. App. (St. L.) 635; Knights Templar, etc., v. Jarman, 104 Fed. 638, 44 C. C. A. 93; Supreme Council v. Getz, 112 Fed. 119, 50 C. C. A. 153; Pokrefky v. Association, 121 Mich. 456, 80 N. W. 240; Becker v. Benefit Society, 144 Pa. 232, 22 Atl. 699, 27 Am. St. Rep. 624; Insurance Co. v. Connor, 17 Pa. 136; Hale v. Ins. Co. (Pa.) 31 Atl. 1066; Becker v. Mutual Benefit Ins. Co., 48 Mich. 610, 12 N. W. 874; Weiler v. Equitable Union (Sup.) 36 N. Y. Supp. 734; Langan v. Legion of Honor (Sup.) 70 N. Y. Supp. 663; Newhall v. Legion of Honor (Mass.) 63 N. E. 1; Wist v. Grand Lodge A. O. U. W., 22 Or. 271, 29 Pac. 610, 29 Am. St. Rep. 603; Gaut v. Legion of Honor (Tenn. Sup.) 64 S. W. 1070, 55 L. R. A. 465; Strauss v. Mutual Reserve Fund, 128 N. C. 465, 39 S. E. 55, 54 L. R. A. Am. 605, 83 St. Rep. 699; Bragaw V. Knights of Honor (N. C.) 38 S. E. 905, 54

L. R. A. 602." See, also, Thibert v. Supreme Lodge, Knights of Honor (Minn.) 81 N. W. 220, 47 L. R. A. 136, 79 Am. St. Rep. 412. In the case of Richmond v. Supreme Lodge, 100 Mo. App. 8, 71 S. W. 736, cited and relied on by appellant, the policy was not for a definite and certain sum to become due on the death of the member, but for such sum, not exceeding $2,000, as might be determined by the charter, constitution, laws, rules, and regulations in force at the time the policy became payable. It was held that the certificate of insurance contemplated that the order might at any time change its by-laws, etc., so as to affect the amount of insurance to be paid on the death of the member, and that the member agreed in advance to be bound by such changes. The cases of Morton v. Royal Tribe of Joseph, 93 Mo. App. 78, Brower v. Supreme Lodge, 74 Mo. App. 490, and State ex rel. v. Grand Lodge A. O. U. W., 70 Mo. App. 456, cited and relied on by appellant, have no application to the facts of the case in hand. I think it may be safely asserted that the doctrine of this court is that beneficiary associations, doing an insurance business on the assessment plan, are without authority to change or modify their contracts of insurance, without the express assent of the members, and that this doctrine is supported by the great weight of authority elsewhere, as shown by the cases cited in the opinion in Morton v. Supreme Council, supra. The assent of the member may be shown by the certificate of insurance, as was the case in Richmond v. Supreme Lodge, supra, or it may be shown by his long acquiescence to the amended law, or by his express assent to the amendment when made. The respondent protested against the amendment, and, according to the decisions of this court, was not bound thereby, if it modified his contract of insurance. It is conceded that it materially increased his assessments. The cost of his insurance was measured chiefly by the number and amount of assessments the company might make upon him for the payment of death losses. The increase in the amount of each of these assessments necessarily increased the cost of his insurance, and for this reason the amendment materially modified his contract.

3. The policy provides that: "In consideration of nine dollars and the agreements and stipulations hereinafter expressed, Erasmus D. Pearson, minister, of Louisiana, Mo., is admitted to membership in the Knights Templars' and Masons' Life Indemnity Company, for the term of life, from the seventeenth day of January, 1887, at twelve o'clock, noon. And in further consideration that the said Erasmus D. Pearson shall pay all dues and assessments made upon him as such member, in pursuance of the constitution and by-laws of said company at the time and in the manner required of him, the said

company will pay, at their principal office, within sixty days after notice and satis factory proof of the death of said member is furnished said company, to Orpha M. Pearson, wife, children or heirs of said member, and in the order named (unless otherwise ordered by the member in his application, or, if he chooses, subsequently by will or otherwise, in which case the company shall be notified by the member in writing, and the receipt of such notification be duly acknowledged by the company, see section 5, of article 7, on back of this policy) the sum of three thousand dollars, and all the money paid on the policy in assessments subject to the limitation as to the amount of such payments as is provided in section one (1) of article seven (7) of the constitution on the back of this policy."

The section of the constitution referred to and indorsed on the back of the policy is as follows: "Article 7, Section 1. Benefits.Upon due notice and satisfactory proof of a death of a member of this company, the board of directors shall, within sixty days, pay the widow, children or heirs of the deceased member (and in the order named unless otherwise ordered by the member during his lifetime or in his will) the amount set forth in the deceased member's policy of membership. Provided that a policy of membership for $5,000 shall be good for all the money in the death fund arising from one assessment, provided it shall not exceed $5,000 and all the money paid on the policy in assessment; and a certificate for $4,000 shall be good for four-fifths of all the money in the death fund arising from one assessment, provided it shall not exceed $4,000 and all the money paid on the policy in assessment; and so on in the same proportion as to all certificates." Section 3, article 4, of the constitution, indorsed on the back of the policy, provides: "Policies of membership may be issued upon a basis of benefits ranging in amounts to five thousand dollars, and all the money paid in assessments upon the policy, but no member shall hold more than one policy at the same time." By section 4 (assessment rate section) of the same article, the sum of $1,000 is made the unit for determining the rates of assessment.

We think it clearly appears, both on the face of the policy and from section 3, art. 4, of the constitution, that the company agreed at the death of respondent to pay his beneficiary $3,000, the face of the policy, and all the moneys paid in by respondent upon assessments. In Knight Templars' & Masons' Life Indemnity Company (this company) v. Jarman, 104 Fed. 643, 44 C. C. A. 93, this con struction was put upon appellant's policies issued prior to the amendment of its constitution, passed in 1889. And in the same case it was ruled that an amendment, which expunged the provisions which obligated the company on the death of a member to refund

A

all money paid upon assessments, did not have a retrospective operation and no effect upon contracts of insurance entered into prior to the adoption of the amendment. On account of this novel feature in the contract of insurance, the appellant contends that the sum of the insurance, $3,000, plus the amount the respondent had paid in at the date of any assessment furnishes the amount of insurance and the gross sum upon which his assessment should be rated at the rate of $2.55 per thousand; in other words, that the company may levy its assessment, not only on the $3,000 of stated insurance, but may also, in addition thereto, levy an assessment upon the gross sum paid in as assessments. sufficient answer to this contention is that the company has not done so, and there is no clause in the constitution nor anything in the contract of insurance that authorizes it. By section 4, art. 4, of the constitution, as above stated, $1,000 is made the unit of assessment. Therefore an assessment could not be made on any amount less than $1,000 or on a sum over $1,000 and under $2,000. By making $1,000 the unit for assessment, assessments paid in could not be assessed until they aggregated $1,000, nor could the base for levying an assessment be again raised until a second $1,000 had been paid in assessments. If the company's purpose was to use assessments paid in as a basic factor for levying assessments on its members to pay death losses, it would not have enacted section 4, art. 4, of the constitution. Neither the policy nor any section of the constitution indicates that the purpose of levying assessments on the amount of assessments paid in was in the minds of either of the parties to the contract of insurance at the time it was made. But it is insisted that upon equitable grounds and for self-preservation, as well as for the protection of its members, the company should be granted the right to exercise this power. The stipulated consideration of the policy is the rate per thousand fixed by section 4, art. 4, of the constitution, and it is no more competent for a court of law or of equity, for reasons of expediency or for the purpose of relieving against an apparent hardship, to add to or subtract from this plain and unambiguous stipulation in the contract than it would be to add to or subtract from the $3,000 of indemnity stipulated to be paid to the beneficiary on the death of the member. The company fixed the rates of insurance, and, we presume, fixed them high enough to meet its obligations to pay both the face of the policy and the amount of assessments paid in on the death of a member. If it did not do this, the fault is its own, for which the respondent is in nowise responsible.

Discovering no reversible error in the record, the judgment is affirmed. All concur.

TIONS.

In an action by the owner of a building against the architects, the court instructed that the uncontradicted facts showed that defendants were engaged to draw plans for and superintend plaintiff's building; that thereby they guarantied that they had the necessary skill and would use proper care in drawing said plans, and if they did not possess such skill, or if they were negligent, causing loss to plaintiff in the particulars complained of by him, defendants were liable, Held, that there was nothing vague or uncertain in the instruction. 3. APPEAL-RIGHT TO REVIEW-INSTRUCTIONS. Where a party did not request that terms used in an instruction be explained to the jury, he could not complain of the instruction on that ground for the first time on appeal.

[Ed. Note. For cases in point, see vol. 2, Cent. Dig. Appeal and Error, § 1309; vol. 46, Cent. Dig. Trial, § 639.] 4. CONTRACTS

TIONS.

BREACH-ACTION-INSTRUC

In an action by the owner of a building against the architects, the petition alleged that defendants either drew the plans so as to call for the erection of walls higher than they should have been, or, having drawn them properly, negligently built the walls higher than they should have been; and the court instructed that defendants guarantied by their engagement that they possessed the necessary skill and would use proper care, and that if they did not possess such skill or if they were negligent, thereby causing a loss in the particulars complained of, they were liable. Held, that the instruction was not erroneous as failing to present an allegation of the petition that defendants represented the plans to be of a character different from what they were in fact; there being no basis for any such instruction.

5. NEW TRIAL-MISCONDUCT OF JURORS-APPLICATION OF PERSONAL KNOWledge.

The issue was whether defendants had properly constructed a certain barn for plaintiffs, and it appeared, on a motion for a new trial, that two of the jurors had passed by the barn and looked around, and a third entered it; but the jurors filed counter affidavits showing that two of them passed by the barn becausedrawn that way on business, but that they took no measurements and made no estimates, and an affidavit of the other stated that he had been in the barn to see a man on business, but took no measurements or estimates. Held, that there was no error in denying the motion. 6. APPEAL-REVIEW-CONFLICTING EVIDENCE -MOTION FOR NEW TRIAL-DECISION.

Where, on a motion for a new trial on the ground of misconduct of a juror, the evidence is conflicting, the judgment of the trial court will not be disturbed on appeal.

[Ed. Note. For cases in point, see vol. 3, Cent. Dig. Appeal and Error, § 3870.]

Appeal from Circuit Court, Greene County; James T. Neville, Judge.

Action by the Dysart-Cook Mule Company against Reed & Heckenlively. From a judg ment in favor of defendants, plaintiff appeals. Affirmed.

Delaney & Delaney, for appellant. V. O. Contrane, for respondents.

It

BLAND, P. J. Such extracts of the evidence as the plaintiff has seen fit to quote in its statement of the case furnish an apology for the abstracts of the record which the statute and rules of the court require it to furnish. While these quotations are meager, they furnish a brief history of the case. appears that plaintiff is a corporation and owns a lot on the corner of Olive and Campbell streets, in the city of Springfield, Mo., fronting 81 feet on Olive and running back north 172 feet on Campbell. In the year 1903 plaintiff employed the defendants (a copartnership of architects) to draft plans for and superintend the erection of a two-story brick mule barn to cover the entire lot, and gave instructions to the defendants about the elevations and arrangement of the barn. Defendants drafted the plans, and prepared specifications for the construction of the barn, and superintended its erection. It is alleged in the petition that either the plans and specifications were unskillfully and negligently drawn, or, through the negligence and unskillfulness of defendants in the erection of the barn, the plans were departed from to the damage of plaintiff. From what we can gather from the extracts of the evidence, the entrance to the barn is on Olive street through an 11-foot door in the front wall. Plaintiff's officers testified that it was agreed and understood between plaintiff and defendants, and that the plans so show (plans not before us), that there was to be a 3-inch elevation in the entrance from the outside to the inside of the wall (a distance of 13 inches), and from the inside of the wall an elevation of 6 inches in 2 feet of floor space; that from the terminus of the elevation on the inside it was agreed, and the plans so show, a dead level of floor space 12 feet in width to the rear wall of the building, which space was to be fenced off as a mule alley, and be used for the purpose of showing horses and mules for sale. It appears that, on account of an ordinance of the city of Springfield in regard to sidewalks, it was afterwards agreed to increase the elevation in the doorway 22 inches to conform to the grade of Olive street. Olive street runs east and west, and Campbell street north and south. There is a slope of 8 feet from east to west in Olive street in the 81 feet fronting plaintiff's lot, and a 10-foot slope or fall to the north on Campbell street in the distance it bounds plaintiff's lot. It thus appears that the curbstone on the northeast corner of Olive street is the highest established grade point in the streets bounding the lot. From this grade

point the defendants contend they took the elevation for the barn floor and basement walls with the knowledge and by the consent of plaintiff, and that this was done in order to get the proper height for the basement. On the other hand, the plaintiff's evidence tends to show that the top of the curbstone fronting the entrance to the barn was the point from which the elevation was to be taken, and that the plans show this fact. The basement is 60 feet long, and is entered from Campbell street. It appears that the Olive street entrance is 30 inches above the curb fronting the entrance, and on account of this elevation it is difficult to draw loads of feed into the barn; and plaintiff's evidence is that the floor of the mule alley is not level, but is on an incline, and, on account of this incline, the alley is not suitable for exhibiting mules and horses for sale. Defendants testified that the plans for the barn were repeatedly changed with the consent of the plaintiff, while the basement walls were in course of erection, and that these changes were necessary to procure the height of basement desired by the plaintiff's officers, who insisted on a 9-foot basement, and that these changes were made after a great part of the basement walls had been laid. The court gave instructions to which plaintiff objected, but asked none in its behalf. The verdict was for the defendants.

1. Plaintiff insists that it was entitled to at least nominal damages, but it did not so move the court to instruct the jury, and there is nothing in the pleadings (the answer was a general denial), and no admission of any fact on the part of the defendants contained in the plaintiff's statement of the evidence which would warrant a peremptory instruction to find for it. The officers of the plaintiff were the principal witnesses in its behalf, and no fact or facts testified to by them or either of them, which would entitle it to a verdict, was admitted by the defendants. In such circumstances the case is one for the jury, although the plaintiff's oral evidence is not contradicted by any other witness. The interest of the plaintiff, in the event of the suit, is of itself sufficient to require the submission of the case to a jury. Jenks v. Glenn, 86 Mo. App. 329.

2. The court gave the following instructions of its own motion: "(1) The uncontradicted and admitted facts in this case are that defendants are architects, and as such engaged themselves to plaintiffs to draw plans for and superintend the construction of plaintiffs' mule barn. Now, by such engagement the defendants guarantied to plaintiff's that they [defendants] had and possessed the necessary skill, and that they would use proper care, to draw said plans and superintend the construction of said building in a workmanlike manner, and if they did not possess such skill, or if they were negligent in their conduct in the premises, and such want of skill or such negligence caused a loss to plaintiffs