ARIi.] KNIGHT V. AMERICAN INSURANCE UNION. 303' KNIGHT V. AMERICAN INSURANCE UNION. Opinion delivered December 6, 1926. 1. INSURANCE—BENEFIT SOCIETY—LIMIT OF LIABILITY.—Where, in assuming to, pay the benefits provided for members of a mutual aid society, the defendant society expressly limited its liability to the net amount to be realized from one assessment of the members of the roll of which he was a mem73er after deducting his Proportionate share of the expense of collecting .it, and the assured assented thereto, such limitation was binding on his beneficiary. 2. EVIDENCE—COPY OF WRITING.—Testimony of one in charge of the records of a mutual aid society 'held competent to prove its by-laws and the merger contract under which it consolidated with defendant, where he testified . that the copy of the by-laws was true and correct and that the copy of the merger contract was examined and compared with the original. 3. EVIDENCE—DELIVERY OF MAIL MATTER.—In the absence of proof to the contrary, it will be presumed that matter properly mailed-was received.by the addressee. 4. INSURANCE—ACCEPTANCE OF CONTRACT.—Evidence held to•support a finding that the insured, a member of a mutual benefit society, received a copy of the contract whereby the insurer was consolidated with another insurance society, and that he. accepted and became bound by its provisions. 'Appeal from Crawford Circuit Court ; James Coch-ran, Judge; affirmed. Chew & Ford, for appellant. Evans & Evans, for appellee. WOOD, J. The- Home Protective Association of Springdale, Arkansas . , hereafter called, Association, is a mutual aid _society organized and doing an insurance . business in this State - fOr the protection of its members , on the assessment plan. On-the 24th of March, 191.9, the association issued its "cooperative graduating certificate' , ' insuring the life of Horace Knight of Van Buren, Arkansas, in favor of Joe Knight. • By the terms of the certificate, the association, in consideration of the application of Horace Knight, undertakes to pay Joe Knight, the beneficiary in the certificate, on proof of .the death of the assured, the sum of $100 should the death of the 'assured occur within the first six months, and thereafter
304 KNIGHT V. AMERICANINSURANCE UNION. [172 to be increased at the rate of $12.50 per month during 72 months, until it reaches the maximUm . of • $1,000. The payment of . the amount Stated in the certificate was conditioned only upon the prompt payment of the assess-nients under' the rules set forth in . the application for the certificate and by-laws of the association. The application, among other • things, provides : " The assessments shall begin at 43 cents, and graduate one cent . per month for the first eighty-four months of the life of the certificate,. when it reaches '$1.27,,which is named as' the maximum amount which can be assessed against this applicant on any one death loss or accident benefit ; provided, if the proceeds of said assessment, to'gether with funds on hand, are not sufficient to provide for the maximum death benefit, a sufficient pro rata assessment shall be levied on all members to provide sufficient funds for such maximum death . benefit. * * is understood and agreed that the applicant , shaH become a member' of a roll not exceeding one thousand (1,000) members, and certificate shall be. 'issued accordingly, each roll to be giveh a distinct number by which it shall be known and designated ; and assessments for the redemption of certificates shall be made numerically on said rolls aS deaths . occur, to . the end that each roll of ceftificate holders shall share equally the burden. The value and condition of the certificate for membership to be issued on this application shall be as follows : Should the death of the .aPplicant occur within the first six months from the date of the applica-,tion, the beneficiary shall receive the nlinimum certifiCate value of $100. Value of ' certificate to increase thence $12.50 per calendar month up to • and including the seli-enty-two months of the life of the certificate, . when it reaches its maximum value Of $1,000. ' It is hereby understood that thiA certificate is a part of the contract and a warranty by the member," etc. This action was instituted in July, 1925, by Joe Knight, the beneficiary in the certificate, against the American Insurance Union, hereafter called union, on the certificate as above set forth, to recover the sum of
ARK. KN IGHT V. AMERICAN INSURANCE =UNION. 305 $800 which Knight alleged had accrued • and .was due under the certificate; He alleged that all the provisions of the .contract bad been complied witb on the part of the 'assured at the time of his death, that the union had assumed all the debts of the association, that all the provisions of the certificate bad been complied with by the plaintiff 'since tbe death of the assured, .and he prayed for judgment against . the union in the sum of $800, together with 12 * per cent. interest and reasonable attor-hey's fees. The union answered,. and set up that; according to the by-laws of the asseciation in force at the time the Certificate was issued, the asSociation was only bound to pay tO the beneficiary, on the: death of the assured, the proceeds of one hssessMent on the members of the roll, to which the assured belonged, -less- the actual coSt of making 'and collecting such assessment and paying out the proceeds thereof. It alleged that' the association was conSolidated with the union on 'November 1, 1918, under a -contract Which, among • other things, provides as. follows "The American Insurance Union shall not be legally obligated to pay the *claims arising among..the membership hereby consolidated in any amonnt in 'excess of the aniount due.the member or his beneficiary or beneficiaries under the by-laws of- the :Hoine- Protective' Association and 'the, by-laws of the board of directors thereof." And further : "The Americiin Insurance Union Will- pay the benefits provided' for meMbers of the association hereby censolidated as provided for under the by-laws .of the Home Protective . Association and the by-laws of the board of directors thereof, butin no case shall the association be liable in excess of the amount , provided therein,- it being expressly agreed arid understood that the American Insurance Unioh shall not be.:liable to the holder of the attache& certificate in excess -of the net amount realized from one assessment to the Members of the roll of which he was a member in the Horne ProtectiVe Association', after deducting his: proportionate Shale of the . expense of operation." The union fnrther alleged that, after the consolidation, it sent a copy of the . Merger contract to
306 KNIGHT V. AMERICAN INSURANCE UNION: [172 Horace Knight, to be attached to and become a part of the contract of insurance. It alleged that, in . compliance with the by-laws of the• association, the union levied an assessment on the members of the roll to which Horace Knight belonged for the month of May, 1924, the month in which he died, and that such assessment produced -the sum of $79.82, from which, after -dedneting .the sum of $13.30 to cover the expense of levying, collecting and paying out said . assessment, there remained the sum•,of $66.52, which amOunt the union tendered to the plaintiff, and paid the sum into court, and prayed that it have judgment for its costs. • When the cause was called for trial, and before the testimony was . adduced, the union paid into the court the sum of $66.52, together_witb costs of the action to that time. The plaintiff then introduced in evidence the certificate containing the proviSions as above set forth. Thereupon the defendant union admitted that the assessments had all been paid and that the certificate was in full force and .effect at the date of the-death of the assured, and that .the plaintiff had complied with the terms of the contract . of insurance as - to proof of death of the assured. ..The defendant read in evidence the 'deposition of Dr. George Hoglan, over the objection of the appellant that this' testimony was irrelevant and incompetent. This witness testified, among other 'things, that the union and the association entered into a 'contract on November 1, 1918, the _original of which was .on file at the home office of the union. He attached to his deposition, as Exhibit No. 2, "a duly examined and compared copy of the merger contract," which was submitted to the insurance departments of the 'States uf Arkansas and of Ohio . and appr6ved by them before it became effective. The union sent a copy Of this contract with a memorandum to each member of the association, with a receipt attached. to the rider, for acknowledgment by the- member. His Exhibit No. 3 .was a copy of that. instrument. Thd union sent one to Horace Knight. He became a member of tbe union. The witness then stated that he was familiar with the by laws of the association.
AUK.] KNIGHT V. AMERICAN INSURANCE VNION. 307 The original records of these by-laws were kept in the files of the home office of- the union. He attached to his deposition, as Exhibit No. 4, "a duly examined and compared copy" of the by-laws of the association that were in force at the time of the consolidation of the association and the union. The union tendered to Joe Knight the sum of $66.52 as the amount due on the certificate, which he refused to receive. One assessment was levied on the entire membership of the roll to which Horace Knight belonged. The records show that this assessment produced $79.82. The full amount was not tendered because § 113 of. the by-laws of the union and the merger. contract provided that one-sixth of the amount collected should be deducted, leaving the amount of $66.52; which •waS tendered. The witness testified that •he had personal knowledge of the records of the union, and that the records referred to were the original recordS. -He' kept the original minutes of the constitution of the union when the same was adopted. They were signed by the witness, and were permanent records of the union. The witness was not present when the constitution and by-laws of the association were adopted, but he was present when copies were made from the original constitution and by-laws When same were turned over by the association to the union in 1918, and witness knew that these were true and correct copies. The asSessment levied for the month of May, 1924, the month in which- the assured died, were levied On seventy-four members, and the asses,sments were paid during the month June, 1924. • According to § 113 of the constitutiOn and by-laws of the union and the merger contract, one-siXth is deducted _for expenses: Exhibit 1 to witness' deposition was § 113 of the constitution and by-laws of the 'union, which provided, amOng other things, that the expense and extension fund of the society shall receive one-sixth of all premiums colleCted foi- the expenses of levying, collecting . and paying out the same. The documentary evidence referred to in the answer and by this witness was all introduced and yead to the jury.
308 KNIGHT V. AMERICAN INSURANCE UNION.. [172 In addition to the testimony of this• witnes g there was further testimony to the effect that Horace Knight was entered on the records of the union as a certificate holder, that ..his death occnrred on May 28, 1924, and that, on that day, an assessment was levied• on the entire membership roll to which he belonged, which resulted in a collection of $79.82, and that, according to the constitution and by-laws of the union and the merger contract, one-sixth was deducted for expenses.-This levy was made under the supervision of the witness, whose duty it was to make the levies and collections. " In addition to the above, the merger contract also contained the following provision : "It is hereby under- . stood and agreed that the members hereby consolidated shall be subject to the constitution and laws of the American Insnrance • Union now in force or that may hereafter be in force, ' except as herein . otherwise provided." The plaintiff asked the court to direct the jury to return a verdict in his favor, in the sum of $800, which the court refused to do. The court, instead, instructed the jury that, upon the only issue here, according to the undisputed proof and cOntract• in the . .case, they should return a verdict in favor of the plaintiff in the sum of. $79.82, less the actual expense of collecting the same. The plaintiff excepted to the above ruling of: the court. The jury returned a yerdiet in-favor of the plaintiff in' the sum: of $77.52. Judgment was entered for that -sum, from winch the plaintiff duly prosecutes- this appeal.. 1. The appellant has no right to recover thee suM of $800, which he claimed was dne under the dertificate issued by the association, unless the eontract by Whidh the association was consolidated with the union gives him such right. The appellant alleged that the APpellee, for a_ i valuable consideration, assunied all the debts - and liabilities of the 'association. The appellant thus bottoms his right to recover of the appellee upon the contract :by which the appellee union and the AssoCiation were consolidated.
ARK.] KNIGHT V. AMERICAN INSURANCE UNION. 309 It will be observed, from the provisions of the merger contract set out above, that the appellee is not obligated to pay the claims of the members of the protective association in any amount in excess of the amount due the member of such association under the by-laWs ; that it.is not liable in excess of the net amount realized from one assessment of the members of the roll of ■-vhich be was a member in the association and after deducting his proportionate share of the expense of operation. The by-laws . of the association prdvide . "in no event shall any beneficiary receive more than the face value of such certificate, nor more than the proceeds of one assessment, less the actual cost of making and collecting such asess-ment 'and payment of the proceeds -thereof." Thel amount to be paid the beneficiary, less the cost of mak-. ing, collecting, and paying the proceeds, is that produced by one assessment on the entire membership of the roll . to which tbe deceased member belonged. Learned counsel for the appellee .contend that there is no competent testimony in the record to establish the above provisions of the contract of merger and that there is likewise no competent testimony to prove the above provisions of the by-laws of the association. They rely uPon the general rule of practice in the production of•evidence, as announced by this cOurt through Judge LACEY, in Brown v. Hicks, 1 Ark. 232, at page 243, as follows : 0 . "It is a universal rule of practice that a party will never be permitted-to resort to. secondary or inferior evidence while it is in his power to adduce a higher grade, or more conclusive testimony: The best attainable evidence - shall be . . adduóed to prove every disputed fact. This rule of evidence is founded upon a supposition of fraud, and its operation is every way highly . salutary and . important." And counsel for appellant eite . other Arkansas cases, - to-wit : McNeill v. Arnold, 17 Ark. 154; Supreme Lodge K. of P. v. Robbins, 70 Ark. 364, 67 S. W. 758 ; Rural Home .. .Lodge No.1720 v. Sea, 143 Ark. 167, 220 S. W. 305 ; and 10 R. C.. L. "Evidence," § 66 et seq.; Mandel v.-Swan.
310 IiNIGHT v. AMERICAN INSURANCE UNION. 012 Land & Cattle Co., 154 Ill. 177, 40 N. E. 462, 271. R. A. 313. But we have examined these authorities, and there is nothing in any of them to contravene the well established rule that, whenever a copy of a record or • document is itself made original or primary evidence, it must ibe a copy made directly from or compared with.the original. . For instance, Judge LACEY, in the case -cited . above, from which the excerpt is quoted, says : "It does not appear that tbe subscribing witness ever compared or examined the supposed cot)y with the original, nor did.he pretend to say that he knew it to be an exact Or sworn copy. All he states is that he believes the contents of the two instruments are substantially the same, but he has*- not seen the original for many years." • In Supreme Lodge K. of P. v. Robbins, supra, Judge... RIDDICK, speaking • for the court, -recognized the rule as to certain books, papers and docu.mentary evidence, When he says : "It appears from the evidence, we think; that theSe laws of the order were matters of record on the books of the order. It follows that they could not be proved by parol. As it would have been inconvenient to produce the original books, they should have been proved by an examined or authenticated copy.. It was the'refore not proper to have witness state his opinion of, what the law was. He should have produced a copy of the law or record. * * * The witness should have stated that be had cOmpared it with a record of these-laws, and that if:was a true copy of the same." See also Miller v. Johns* 71. , Ark. 174, 72 S.. w. 371. - In Rural Home Lodge No. 1720 v. Sea, s.upra, we. Merely held that the authority to try a member of a benefit society and to suspend him should have !been shown by producing the rule, regulation or by-law conferring such authority. So that case is not in point. And in McNeill v. Arnold, supra, we held that the Statute law of another State can be proved only by the production of the statute, and' not by parol. So likewise'. that case is not in point.
ARK.] KNIGHT V. AMERICAN INSURANCE UNION. 311 Now, an examination of the testimony . of Dr. Hoglan discloses that, according to the rule recognized in Brown •v. Hicks, supra, and in Supreme Lodge K. of P. v. Robbins, supra, the bY-laws of the association and merger confract were proved by•competent testimony. Dr. Hoglan's testimony shows that he had charge of theSe records and documents. Cdncerning the merger contract, among other things, he said : "I am familiar with such contract 'and with the terms thereof. The. original contract is on file at the home office of the American Insurance , Union. I aM attaching, as Exhibit No..2, a duly examined and compared copy of the merger contract," etc. Concerning the proof of the by-laws of the association he said : "I was present when the copies were made from the original constitution and laws which were turned over by the Home Protective Association in 1918, and I know the-copy to be a true and correct copy:" Therefore we •conclude that the by-laws of the association and the consolidation contract were proved by competent testimony. Under the ternis of the merger agreement and _the by-laws of the association, as above set forth, the appellant was Only entitled to recover the net amount realized from one assessment . of the 'members of the roll to which the 'deceaSed member belonged, after deducting , his propor-- tionate share of . the expense of making, collecting, and .distributing the assessment. Such is the h"Olding of this court ih the cases of mutual benefit insurance societies having by-laws cOntaining similar provisions to that under review here. Home Mutual Benefit Association Roland, 155 Ark. 450, 244 S. W . 719 ; Home Mutual Benefit ' Assn. y. .Rownd, 157 Ark. 597, 249 S. W. 3 ; Fayetteville Mutual Benefit Assn. v. Tate, 164 Ark. 317, 261 S. W. 634. 2. As we have Seen, the byJaws of the association 'provide that each beneficiary shall receive the proceeds .of one assessment of the" entire membership of the roll to which tbe deceased member belonged, and no more than one assessment, less the cost of making , and collecting • uch assessment and paying Out the proceeds , thereof. The undisputed testimony in the record shOws that the, •
312 KNIGHT V. AMERICAN INSURANCE UNION. 1172 assessment made under the provisions of this by-law yielded $79.82. The court instructed the jury to return a verdict for such amount, less the actual expense of the• collection, and the jury returned a verdict in the sum of $77.52. There is no contention by the appellant that the .verdict, under theinstructions of the court, was excessive, and -appellant's only contention iA that the court erred in directing the verdict, and that the verdict was not supported by legal testimony. It follows from what we have . said that tbe instruction of the court was correct, and tbe v6rdict of the. jury was responsive to the undisputed testimony. 3. The case of American Insurance Union v. Robin-son, 170 Ark. 767, 281 S. W. 393 . , is not in conflict with
our decision herein holding tbat the appellee is not liable for the full amount claimed by --the appellant. In that
case. the plaintiff's action was predicated upon a certificate of insurance •precisely similar to the foundation of. the action in the case at bar, and the American Insurance tbe defendant in that case, defended on the same grounds as it interposes here, to-wit, that the contract- of consolidation limited the amount of its liability to such amount as should be collected from the membership roll . to which the deceased member belonged, less one-sixth of the amount collected as expenses for collecting the same. We held, under the facts adduced in that case, that the defendant, the appellant, was liable for the full .amount of the face Value of the certificate: But the facts of that case were entirely different from the facts in the case at bar. For instance, the notification of the merger contract to be 'attached as a rider to tbe certificate or contract of insurance, as is said in the opinion, "did not attempt to change her membership or the terms of the original contract. It contained no provision requiring her to accept the rules and by-laws of the Home Protective Association of Springdale, nor did it contain a notification that her certificate Would be controlled or governed by it. * * * It is true that appellant introduced testimony tending to show that it mailed a rider to Mrs. Robinson to be
ARK.] KNIGHT V. AMERICAN INSURNCE UNION. 313 attached to her certificate of insurance, embodying the substance of its contract with the Herne Protective Association of Springdale limiting its liability in the payment of death losses, but appellee introduced testimony to the effect that Mrs. Robinson never received-or heard of such rider. This question of disputed fact was determined against the appellant in the trial, and it is bound by the finding." The undisputed facts here nre entirely different. The undisputed evidence shows that the assured was notified of the terms of the merger contract, to be attached as a. rider to his certificate of insurance. The undisputed testimony is that the American Insurance Union, at the time of the merger, sent a copy of the contract with a memorandum to each and every member of the Home Protective Association, with a receipt attached to the rider for acknowledgment by the member. The American Insur--ance Union sent one of thee to Horace Knight by mail. There -is no testimony in the record to the effect that Knight did not receive the above rider. The presumption would be, since the same was properly mailed to him, in the absence of proof to the contrary . , that he did receive the same. But, aside from this presumption, the conclusion is irresistible that the assured member did receive the rider, for he continued, after the merger contract until his death, to pay the assessments to the appellee.. The undisputed testimony therefore justified the trial court in finding that Horace Knight, the assured member, received a copy of the consolidation contract . And accepted its provisions. The appellant predicted his cause 'of action upon such contract, and, having accepted the same, he is bound by its terms. • The record presents no error, and the judgment of the trial court is therefore affirmed. •
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.