Ancient Order United Workmen v. Brown

• Decision Date: 24 January 1901
• Citation: 37 S.E. 890,112 Ga. 545
• Parties: ANCIENT ORDER UNITED WORKMEN v. BROWN et al.
• Court: Georgia Supreme Court

37 S.E. 890

112 Ga. 545

ANCIENT ORDER UNITED WORKMEN v. BROWN et al.

Supreme Court of Georgia

January 24, 1901

Syllabus by the Court.

1. A member of a mutual insurance order may, when acting in good faith, legally designate, as the beneficiary in a certificate of life insurance issued by the order, one who has no insurable interest in the life of the member, provided there be, at the time the certificate is issued, no restriction in the charter, constitution, or laws of the order, or in the statutes of the state, forbidding the right to appoint such a beneficiary.

2. Although the application and certificate both stipulate that the right of the member to participate in the benefit fund is expressly conditioned upon his compliance with all the laws regulations, and requirements which are or may be enacted by the order, a by-law enacted subsequently to the issuance of the certificate will be given a prospective operation, in the absence of a clear intent that it shall act retrospectively.

3. To render an insurance company liable for attorney's fees under the provisions of section 2140 of the Civil Code, a demand and a refusal to pay, 60 days before suit is brought must be plainly averred, and the truth of such averment must be established on the trial. No such demand and refusal being averred and proved in the present case, the recovery of attorney's fees was not authorized.

Lumpkin, P.J., dissenting.

Error from superior court, Dougherty county; W. N. Spence, Judge.

Action by Adella T. White against the Ancient Order of United Workmen and Georgia C. Brown. Judgment for Georgia C. Brown, and the defendant insurance company brings error. Affirmed.

D. H. Pope & Son, for plaintiff in error.

Hatcher & Carson, S. J. Jones, and Wooten & Crosland, for defendants in error.

FISH J.

In November, 1879, Lodge No. 7, of Columbus, Ga., of the Ancient Order United Workmen, which was not a corporation, but a mutual beneficiary association, issued a certificate of membership insurance on the life of L. I. Harvey, in which Miss Adella T. White was named as the beneficiary. The application, signed by Harvey, upon which this certificate issued, recited that "I *** do hereby agree that compliance on my part with all the laws, regulations, and requirements which are or may be enacted by said order is the express condition upon which I am to be entitled to participate in the beneficiary fund, and have and enjoy all the other benefits and privileges of this order." The certificate itself contained a similar stipulation. When the certificate was issued there was nothing in the laws of the order restricting the right of a member to designate in the certificate whomsoever he pleased as the beneficiary. In October, 1883, Harvey surrendered this certificate to the order, which canceled the same, and had a new certificate issued, in which, at his direction, Mrs. Georgia C. Brown, who was neither related to nor in any way dependent upon him, was designated as the beneficiary, her relation to Harvey being stated as that of "friend." This change of the beneficiary was made by Harvey in consideration of an agreement between him and Mrs. Brown that she would take the certificate in satisfaction of four months' board, she agreeing to pay all future assessments made by the association. She received the new certificate upon this agreement, and paid all assessments made upon Harvey until his death, which occurred in August, 1898. In 1890 the order adopted the following by laws: "(9) Beneficiaries. Each member shall designate the person or persons to whom the beneficiary fund due at his death shall be paid, who shall, in every instance, be one or more members of his family, or some one related to him by blood, or who shall be dependent upon him. (10) Order of Payment to Beneficiaries. If one or more of the beneficiaries shall die during the lifetime of the member, the surviving beneficiary or beneficiaries shall be entitled to the benefit equally, unless otherwise provided in the beneficiary certificate; and if all the beneficiaries shall die during the lifetime of the member, and he shall have made no other direction, the benefit shall be paid to his widow, if living at the time of his death; if he leave no widow surviving him, then said benefit shall be paid, share and share alike, to his children, his grandchildren, living at the time of his death, to take the share to which their deceased parents would be entitled if living; if there be no children or grandchildren of the deceased member living at the time of his death, then said benefit shall be paid to his mother, if living, and, if she be dead at the time of his death, then to his father, if living; and, should there be no one living at the death of the member entitled to said benefit under the provisions hereof, then the same shall revert to the beneficiary fund of the grand lodge."

Subsequently to the adoption of these bylaws the grand recorder of the order gave Harvey written notice of the enactment of by-law No. 9, the notice further reciting: "The records in this office show that there is quite a number of members in the jurisdiction holding beneficiary certificates in which the direction of payment of the beneficiary fund is not in conformity with the laws above stated. By a resolution adopted at the last session of the grand lodge, each member holding such beneficiary certificate is required to surrender the same to the grand lodge in exchange for one which will conform to the laws of the order, and for which no charge will be made." Harvey never complied with this request to change the beneficiary named in his certificate. After the death of Harvey, Adella T. Leonard (formerly Adella T. White), the beneficiary named in the first certificate issued to Harvey, brought an equitable action against the order and Mrs. Brown, claiming that by reason of the adoption of by-laws Nos. 9 and 10, in 1890, and the failure of Harvey to comply with by-law No. 9, the last certificate in which Mrs. Brown was named as the beneficiary was void, and that the petitioner was entitled to the benefit fund due on Harvey's certificate, by reason of the fact that she was the beneficiary named in the first certificate, and also because she was next of kin and sole heir of Harvey. She prayed for a recovery of the fund against the order, and that the order be enjoined from paying it to Mrs. Brown, and that Mrs. Brown be enjoined from suing the order, and be required to litigate her rights in the suit filed by the plaintiff. Both the insurance order and Mrs. Brown answered,--the former claiming that, under its by-laws and the facts of the case, the fund had reverted to it; and the latter, by way of cross petition, setting up a claim to the fund as beneficiary under the last certificate issued to Harvey. By consent of all parties, the case was tried by the judge without the intervention of a jury, upon an agreed statement of facts, from which the facts above stated are taken. The court rendered a judgment in favor of Mrs. Brown against the insurance association for $2,000, the amount due on the certificate, together with interest thereon, and $250 as attorney's fees, to which judgment the order excepted.

1. One of the contentions of the order is that, as Mrs. Brown had no insurable interest in the life of Harvey, the certificate of membership insurance in which she was named as beneficiary is a wagering policy, and therefore void. In our opinion, this contention is not sound. The point is covered by the ruling made in Fraternal League v. Walton, 109 Ga. 1, 34 S.E. 317, where it was held: "As one has an insurable interest in his own life, he may lawfully procure insurance thereon for the benefit of any other person whose interest he desires to promote." In the very able opinion of Mr. Justice Little, who spoke for the majority of the court, it is said: "One question only arises for determination under the record in this case: This is whether a beneficiary named by a member of a fraternal or benevolent association which provides for life insurance is entitled, after the death of such member, to recover the amount of the benefit without showing any insurable interest in the life of the deceased. The contention of the plaintiff in error is that the contract under consideration must be governed by the principles of law applicable to ordinary contracts of life insurance, and the legal proposition is submitted that a policy in favor of one who has no insurable interest is void, as it is a wager contract, and against public policy. We cannot assent to the correctness of this proposition." In construing the last paragraph of section 2114 of the Civil Code, which is in the following words: "The life...