Grand Lodge Ancient Order of United Workmen of Missouri v. McFadden
| Decision Date | 03 July 1908 |
| Citation | 111 S.W. 1172,213 Mo. 269 |
| Parties | GRAND LODGE ANCIENT ORDER OF UNITED WORKMEN OF MISSOURI v. BRIDGET McFADDEN et al.; MARY O'MALLEY, Appellant |
| Court | Missouri Supreme Court |
Transferred from St. Louis Court of Appeals.
Circuit court judgment reversed and remanded (with directions).
Walther & Muench for appellant; F. H. Bacon of counsel.
(1) The deed of adoption could not be attacked in this, a collateral proceeding. Williams v. Carpenter, 35 Mo. 52; Brown v. Brown, 101 Ind. 340; Hannon v Steinman, 9 Iowa 112; Railroad v. Land Co., 175 Pa. St. 95. The motive which may have prompted the making of the deed cannot be inquired into. Kemp v. N. Y Exch., 34 A.D. 175. (2) The beneficiary in a fraternal benefit certificate has no vested interest therein. Masonic Ben. Ass. v. Bunch, 109 Mo. 579; Wells v. Mut. B. Ass., 126 Mo. 637. (3) In the absence of any laws of the association prescribing particular formalities for a change of beneficiary, any clear, definite designation of a different beneficiary will suffice. Masonic B. Asso. v. Bunch, 109 Mo. 579; Gr. Lodge A. O. U. W. v. Childs, 70 Mich. 163; Isgrigg v. Schooley, 125 Ind. 94; Bacon on Ben. Soc., sec. 308a. (4) Where there is no adopted law of the order regulating the matter, a long-established custom is equivalent to a formally adopted law of the society. State ex rel. v. Gr. Lodge A. O. U. W., 70 Mo.App. 466; Angell & Ames on Corp., sec. 328; Davidson v. K. P., 22 Mo.App. 263. (5) The society may waive compliance with its laws. Gr. Lodge A. O. U. W. v. Reneau, 75 Mo.App. 409; St. Louis Pol. R. Assn. v. Strode, 103 Mo.App. 694; Schoneau v. A. O. U. W., 85 Minn. 349; Manning v. A. O. U. W., 86 Ky. 136; Titsworth v. Titsworth, 40 Kan. 571; Sup. Conclave v. Coppella, 41 F. 1; Allgemeier Bund v. Adamson, 92 N.W. 786; Aid Soc. v. Lupold, 101 Pa. St. 111; K. of H. v. Watson, 64 N.H. 517; Martin v. Shibbings, 126 Ill. 387; March v. Sup. Cl., 144 Mass. 512; Adams v. Gr. Lodge, 105 Cal. 321; Schardt v. Schardt, 106 Tenn. 276; Anthony v. Asso., 158 Mass. 322; Splawn v. Chew, 60 Tex. 532; Pa. Rel. Co. v. Wolfe, 52 A. 247; Fisk v. Equitable Aid Union, 11 A. 84; Weber v. Ancient O. of P., 104 Mo.App. 729; Niblack on Benev. Soc., sec. 219; Bacon on Ben. Soc. (2 Ed.), sec. 430; Delaney v. Delaney, 175 Ill. 197; Police R. Asso. v. Tierney, 116 Mo.App. 447; Labey v. Labey, 61 L. R. A. 795. (6) Payment of assessments by beneficiary gives him no claim upon benefit. Masonic B. Asso. v. Bunch, supra; Fisk v. Equitable Aid Union, 11 A. 84; R. S. 1899, sec. 1417.
Bass & Brock for respondent.
(1) The statutes of this State applicable to fraternal insurance provide that any change of beneficiary or revocation of a certificate shall be done by written or printed notice to the association in manner and form provided for in its by-laws. Sec. 1417, R. S. 1899; Black on Interpretation of Laws, p. 273; Friedman v. Sullivan, 48 Ark. 213; King v. Inhabitants of Threlkeld, 4 Barn. and Ald. 229; King v. Inhabitants of Newark-upon-Trent, 3 Barn. & C. 59. (2) A contract between insured and respondent will be inferred as a matter of law from the fact that respondent paid the dues and assessments of insured's certificate with the knowledge and consent of insured for a period of thirteen years. Bush v. Bush, 81 Mo.App. 562; Sprague v. Sea, 152 Mo. 327; Voerster v. Kunkel, 86 Mo.App. 194; Hickman v. Hickman, 46 Mo.App. 496. (3) A bill of interpleader is a strictly equitable proceeding and the decree of the chancellor as to the disposition of the fund should be according to the equities of the case. Miller v. Ins. Co., 68 Mo.App. 19; Funk v. Thomasson, 84 Mo.App. 490; Grand Lodge v. Reneau, 75 Mo.App. 402. (4) A beneficiary in fraternal insurance certificate, while not having vested interest in the fund, has such an interest as that she has a right to insist that in order to cut her out, the change of beneficiary should be made in the manner provided in the contract and that the member be sane at the time of the attempted change. Holland v. Taylor, 111 Ind. 121; Grand Lodge A. O. U. W. v. Frank, 94 N.W. 731; Brown v. Grand Lodge A. O. U. W., 57 A. 176; Rollins v. McHatton, 16 Col. 203; Mellows v. Mellows, 61 N.H. 131; Supreme Lodge v. Nain, 60 Mich. 15; Hotel Men's Mutual v. Brown, 33 F. 11. (5) The constitution, by-laws and certificate constitute the contract of insurance between a benefit society and its members. Grand Lodge A. O. U. W. v. Sater, 44 Mo.App. 445; Grand Lodge v. Elsner, 26 Mo.App. 108. (6) The validity of the substitution of a new beneficiary in place of one named in the original certificate must be determined by the terms of the certificate and of the charter and by-laws of the society. If these provide for the substitution of a beneficiary in a certain way, all other ways are excluded, and a substitution not in substantial compliance with the mode prescribed is invalid. Head v. Supreme Council, 64 Mo.App. 212; Coleman v. Supreme Lodge, 18 Mo.App. 189; Stewart v. Legion of Honor, 36 Mo.App. 330; Hammerstein v. Parsons, 38 Mo.App. 336; Hoffman v. Grand Lodge, 73 Mo.App. 47; Bacon on Ben. Soc., par. 218; Niblock on Ben. Soc., par. 161, 307; Grand Lodge A. O. U. W. v. Ross, 89 Mo.App. 621; Holland v. Taylor, 111 Ind. 121; Rollins v. McHatton, 16 Col. 203; Mellows v. Mellows, 61 N.H. 131; Hotel Men's Mutual v. Brown, 33 F. 11; Renk v. Herman Lodge, 2 Demarest (N. Y.) 409; McCarthy v. Supreme Lodge, 153 Mass. 314; Stephenson v. Stephenson, 64 Iowa 534; Olmstead v. Society, 37 Kan. 93. (7) The Grand Lodge, A. O. U. W., being a fraternal benefit association, cannot, through its officers, waive the requirements of its own laws in this State as to the manner and form in which a change of beneficiary should be effected so as to divest the original beneficiary, for this would be in effect a "disbursement" of its funds and be contrary to the statute. Sec. 1408, R. S. 1899. (8) When a member of a benefit society voluntarily gives his benefit certificate to his beneficiary and she has paid dues and assessments and given financial aid to the member under the belief that she is to receive the fund under the certificate upon his death, he thereby waives his right to change the beneficiary. Under these circumstances, a court of equity will hold that the member has released his power to effect such a change and conveyed to his beneficiary a vested right to the benefit. Catholic Benevolent Legion v. Murphy, 65 N.J.Eq. 60; Leaf v. Leaf, 92 Ky. 166. (9) The member in the case at bar made a false affidavit for the purpose of obtaining the new certificate. Under these circumstances there can be no waiver of the by-laws as against the original beneficiary. To constitute a waiver by officers of the order, there must be actual knowledge of all the facts and an acquiescence in the failure to comply with the contract; otherwise there is no waiver as against the defendant, Bridget McFadden. Johnson County v. Lowe, 72 Mo. 637; Haysler v. Owen, 61 Mo. 270; Advance Thresher Co. v. Pierce, 74 Mo.App. 676; Mohney v. Reed, 40 Mo.App. 99. (10) When the member of a benefit society has voluntarily delivered his certificate to his beneficiary and there is no evidence to show any demand for its return, his affidavit that said "certificate is not under his control but is withheld from him" is false and the society does not waive the by-laws by issuing a new certificate naming a new beneficiary upon the false affidavit. The rule that the action of the Supreme Council in issuing a new certificate is conclusive is based upon the idea that the affidavit states the truth. Such new certificate, issued under these circumstances, cannot give the new beneficiary any right of action against the society or affect the rights of the original beneficiary. Catholic Benevolent Legion v. Murphy, 65 N.J.Eq. 81; Royal Arcanum v. Tracy, 169 Ill. 123; McGrew v. McGrew, 93 Ill.App. 76, affirmed 190 Ill. 607. (11) The new certificate can have no effect in law or equity if made and issued as a result of undue influence upon the member, or while the member was suffering from an infirmity of mind, or as the result of any fraud practiced upon the member or the benefit society. Cason v. Owens, 100 Ga. 142; Onsby v. Supreme Lodge K. of H., 101 Tenn. 16; Catholic Benevolent Legion v. Murphy, 65 N.J.Eq. 60; Shuman v. Supreme L. K. of H., 110 Iowa 480; Sovereign Camp W. of W. v. Wood, 114 Mo.App. 471. (12) There was absolutely no consideration moving to the child, such as is contemplated in section 5248, Revised Statutes 1899, relating to the adoption of children. (13) When the adoption of a child is for the express purpose of changing beneficiary to said child, said adoption and change of beneficiary will not be upheld by the courts. (14) When the adoption is for the purpose of speculation and the hypothecation of the benefit by evading the law of the State and for the purpose of defrauding the original beneficiary, said adoption and change of beneficiary is ineffectual and contrary to the statute regulating these societies in this State. Sec. 1419, R. S. 1899.
OPINION
The plaintiff began this suit in the circuit court of the city of St. Louis by filing therein a bill of interpleader, alleging in substance, that it was a fraternal beneficial organization, duly authorized to issue benefit certificates to its members; and that in the year 1886 Michael McFadden became a member of the association, and that it issued to him a benefit certificate for the sum of $ 2,000, payable to his wife, Bridget McFadden, upon his death, upon certain conditions stated in the bill. It then alleges that about ten years after the issuance of this certificate McFadden had a falling out with his wife and he then had that certificate...
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