Austin v. League
| Decision Date | 11 April 1925 |
| Docket Number | No. 16122.,16122. |
| Parties | AUSTIN v. ROYAL LEAGUE. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Error to First Branch Appellate Court, First District, on Appeal from Circuit Court, Cook County; Hugo M. Friend, Judge.
Bill by Merritt B. Austin against the Royal League. Judgment for plaintiff (232 Ill. App. 359), and defendant brings certiorari.
Reversed.
Farmer, J., dissenting.Harry P. Weber, George W. Miller, Arthur J. Donovan, and Arthur A. Anderson, all of Chicago, for plaintiff in error.
Vose & Page, of Chicago (Hubert E. Page and John D. Clancy, both of Chicago, of counsel), for defendant in error.
Arthur Brookover in his lifetime was a member of plaintiff in error, the Royal League, a fraternal beneficiary society organized under the laws of Illinois. The beneficiary named in the certificate when it was issued was Sarah Brookover, wife of Arthur and mother of defendant in error, Merritt B. Austin. Upon the death of Sarah, in 1907, a new certificate was issued naming defendant in error, the stepson of the insured, as beneficiary by describing him as a dependent. In 1911 Brookover became physically unable to continue his business, and thereupon defendant in error at his request paid the dues and assessments to plaintiff in error. In 1917 Brookover surrendered the 1907 certificate for $4,000 and had issued in lieu thereof two certificates, one for $2,000, payable only in the event that he died before attaining the age of 70 years, and the other for $2,000 payable upon his death at any time. Brookover became 72 years of age October 2, 1919, whereupon one of the certificates by its terms expired. In 1921 Brookover died intestate and without property. He had never had any children, and he left surviving him as his heirs 26 persons named in the bill, all of whom reside outside the state of Illinois. Defendant in error was not a dependent of Brookover, and under the statute of this state and the by-laws of the society he was ineligible to take under the policy as a beneficiary. Upon the death of Brookover there became due and payable to his heirs the sum of $2,000. They have made no demand for the sum due them and no sum has been set apart from the general fund of the society to pay the claim. Defendant in error demanded payment of the $2,000 under the benefit certificate and it was refused by the society. He thereupon filed his bill in the circuit court of Cook county, setting forth the facts stated and praying ‘that said Royal League be required by this court to account to your orator, and upon such accounting to refund all moneys paid or caused to be paid by your orator from and after the first day of September, 1911, to said Royal League upon any and all benefit certificates aforesaid on the life of said Arthur Brookover, together with interest thereon from the dates, respectively, of such payments,’ and for general relief. Plaintiff in error and the heirs of Brookover were made defendants, and there was an affidavit as to unknown owners. Summons was issued and returned served on plaintiff in error and not found as to all other defendants. There was service by publication as to those named as heirs and as to unknown owners. A guardian ad litem was appointed for all minor defendants, and he and plaintiff in error filed answers. All other defendants were defaulted. A hearing was had and a decree entered finding that plaintiff in error was liable to the heirs of Brookover for $2,000 and that it had in its custody in Cook county sufficient funds to pay the same; that defendant in error, believing that he was a legal beneficiary under the benefit certificate issued, had in good faith paid to plaintiff in error assessments on the whole life certificate amounting to $748.18, assessments on the term certificate amounting to $369.98, and local council dues amounting to $47.46; and that he was entitled to repayment of said sum of $1,165.62, and interest thereon, out of the fund of $2,000 due under the whole life certificate. The decree directed plaintiff in error to pay to the clerk of the court the sum of $2,000, with interest from the date of Brookover's death, and directed the clerk to pay out of said sum to defendant in error $1,482.46, being the amount of the assessments and dues paid by him, with interest, and the sum of $34.06 as costs, and to the guardian ad litem the sum of $28. The clerk was directed to hold the balance of the fund subject to the further order of the court. A week after the entry of the decree six of the heirs named as defendants filed their appearance and a consent to the decree. An appeal was taken to the Appellate Court by plaintiff in error, the decree was affirmed, and the cause is brought here by certiorari.
[1][2][3][4] This court has held that where one ineligible to take has been named beneficiary in a certificate like the one here involved and in good faith has paid the assessments relying upon his appointment as beneficiary, he is entitled to be reimbursed for such payments, with interest. National Union v. Keefe, 263 Ill. 453, 105 N. E. 319, Ann. Cas. 1915C, 271;Royal Arcanum v. McKnight, 238 Ill. 349, 87 N. E. 299. This is on the equitable principle that one who has the legal right to the fund under the certificate ought not to be permitted to appropriate the benefit of another's money which has actually produced the fund and which he has paid in good faith in reliance upon his title as beneficiary. This principle does not, however, extend to the creation of a lien in favor of the person paying the assessments upon the general benefit fund in the hands of the society. Since defendant in error was ineligible to receive the principal sum named in the benefit certificate as a beneficiary, there is no contractual relation between him and plaintiff in error. It agreed with Brookover to pay to a beneficiary entitled to receive the sum named, and it is bound to carry out this agreement and no other. It is under no obligation whatever to return the assessments paid, and the assessments paid have not been kept in a separate fund to guarantee the payment of the principal sum named in the benefit certificate. Under the facts in this case plaintiff in error is obligated to pay to the heirs of Brookover $2,000 when they furnish proper proof of heirship and comply with the other terms of the contract. That obligation constitutes a personal claim against it, and it has created by the levying of assessments upon its members a benefit fund wherefrom this claim and all claims of this character are to be paid. The claim of the certificate holder or those entitled to recover under the certificate remains a personal one and not a right in or lien upon specific property. Therefore, before a court of equity can enter a decree under which defendant in error can be reimbursed for the assessments paid by him, the court must have jurisdiction of the parties entitled to payment under the benefit certificate.
[5][6][7][8][9] The basis of the judgment of the Appellate Court as disclosed by its opinion, and the contention of defendant in error in this...
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