Basye v. Adams
| Decision Date | 16 June 1883 |
| Parties | Basye v. Adams, & c. |
| Court | Kentucky Court of Appeals |
1. One of the objects of the National Mutual Benefit Association is to relieve the necessities of sick and disabled members, or to confer charities, in the discretion of the directors, and for that purpose a permanent fund is provided by their charter.
2. The other is to pay to the legal heirs or beneficiary of a deceased member such sum as may be realized from an assessment upon its members, and the fund, according to the charter, must be paid to the legal heirs or beneficiary of such deceased member.
3. Throckmorton (the insured) could not, under the charter, sell and assign his policy of insurance so as to divert the fund from his legal heirs and beneficiary.
4. It is essential to the validity of a policy of insurance obtained by one person for his benefit upon the life of another, that the party so obtaining shall have an insurable interest in the life of the insured.
5. The assignment of a policy of insurance to a party not having an insurable interest is as objectionable as taking out a policy in his name.
APPEAL FROM LOUISVILLE CHANCERY COURT.
JAMES S. PIRTLE AND GEO. B. EASTIN FOR APPELLANT.
1. If by the charter of the National Mutual Benefit Association the beneficiaries are not confined to any particular class and the assured himself may have an interest which the charter does not expressly prohibit him from assigning, then he has the power to appoint, by assignment, some one else to receive the benefits of the policy.
2. The beneficiaries under the charter are not fixed or certain.
3. There is nothing that confines the benefits to the members' " family," and it is not competent to so limit the beneficiaries by by-laws.
4. Section 8 of the charter does not prohibit the voluntary assignment of his policy by a member.
5. By having this policy payable to his " estate," Throckmorton meant to exclude, and did exclude, his legal heirs, and thereby meant to retain, and did retain, complete control over the policy. (98 Mass. 381; Bliss on Life Insurance, secs. 26, 30; Phillips on Insurance, vol. 1, page 186; 20 New York, 32; 27 New York, 282; 15 Com. B., 365; 4 Otto, 462; 4 Otto, 561; 1 Kay and J. Ch., 223; 2 Casey, 189; Hine and Nicholas' Law of Assignments of Life Policies, pp. 73, et seq.; 101 Mass. 565; 85 New York, 593; 11 Rhode Island, 439; 56 Iowa 625; 56 Iowa 620; 95 Ills., 309.)
RANDOLPH H. BLAIN FOR APPELLEE.
1. The certificate of membership held by Throckmorton in the National Mutual Benefit Association was, by its terms, unassignable.
2. It was unassignable by the charter of the association.
3. The assignment to Basye, who could have no interest in his life, was a " " wager contract," and no recovery should be had upon it.
4. If it was not void in whole, it was void as to all save the value of the interest of the assignee in the life insured.
5. The assignment is against public policy and void. (11 Barb., 140; 2 Litt., 167, Foree, adm'r, v. Thomasson; 13 B., 493, Masonic Mut. Ben. Association v. Miller; Duvall v. Goodson, 79 Ky. 224; 27 N.Y. 163; 45 N.Y. 461; 41 Black (Ind.), 121; 18 Kans., 93; Robinson v. Duvall, 79 Ky. 84; 94 U.S. 462, Conn. Life Ins. Company v. Schaefer; 23 N.Y. 518; 15 Wal., 643; 398, 108, 110-'7-'4, May on Insurance; 8 Chi. Le., note 38, 80 Ill. 36; 101 Mass. 565; 104 U.S. 775; M. J. Co., 66 Mo. 70; 11 R. I., 439; 13 N.Y. 33; 20 N.Y. 32.)
September 13, 1878, the National Mutual Benefit Association, in consideration of the payment by him of six dollars membership fee, two dollars annual fee, and his agreement to pay the further sum of two dollars on each anniversary of his membership, and three dollars within thirty days after the death of any member of the association, issued and delivered to J. R. Throckmorton a certificate of life membership, in which it was agreed by the association to pay to the estate of Throckmorton, within sixty days after proof of his death, such sum as might be realized from an assessment on all surviving members, as provided in the sixth section of the charter.
March 3, 1881, in consideration of five hundred dollars, fifty of which was in discharge of an existing debt, and the balance cash paid, Throckmorton, in writing annexed to it, assigned to appellant Basye the certificate, " and all the benefit and advantage to be derived therefrom." And thereafter he paid all dues and assessments which Throckmorton had, in consideration of the certificate and as a life-member of the association, agreed to pay, amounting to sixty-three dollars, and also expended the sum of fifty-five dollars in procuring formal proof, of the death of Throckmorton.
The amount found due and payable by the association, after the death of Throckmorton, which occurred in July, 1881, is the sum of four thousand dollars; and whether that sum, which was deposited by the association, subject to the disposal of the court, should be paid to the administrator of his estate who is the plaintiff in the action, or to appellees, his legal heirs, or to appellant as assignee of the policy, was the question presented and decided by the lower court.
The chancellor rendered judgment for the repayment to appellant Basye out of the fund in court the sum of five hundred dollars, the consideration paid for the assignment of the policy, and the other two sums advanced and paid by him subsequently, and to appellees, legal heirs of deceased, the balance of the amount. And of that judgment both Basye and the heirs complain, each party claiming to be entitled to the whole amount.
As the administrator has not appealed, and it does not appear from the record that there are any creditors of the estate of deceased, unless appellant may be regarded as one, the issue to be here determined as to the ownership of the fund is between Basye and the heirs.
The National Mutual Benefit Association was, by an act of the general assembly, approved April 6, 1878, created a body-corporate, with the right to acquire and hold real and personal property, not exceeding one hundred thousand dollars in value; to make contracts, sue and be sued, and to transact all business for its corporate purposes; and power was also given to it to confer charities, as provided in the charter, or as the president and directors may determine.
By section 2 of the charter it is provided that the persons named therein may constitute a board to do business, and organize and receive as members all clergymen, physicians, lawyers, their wives, and such persons as may be recommended by a member of either of these professions, of good standing, sound health and constitution, and who shall pass a satisfactory medical examination, and be between the ages of eighteen and sixty-five years.
Section 3 provides that each person, on application for membership, shall pay into the treasury of the association certain fees, and " upon the payment of these sums, each member shall receive a life-membership certificate, … .. which shall express on its face the obligations of such member, and the benefits to accrue to the legal heirs or beneficiary of the same in the event of death."
Section 5 is as follows: " The membership and annual fees paid into the treasury by each member, together with assessments, after paying the legal heirs or beneficiary of a deceased member and the expenses of the association, shall form a permanent fund, which may, at the discretion of the directors, be appropriated to relieving the necessities of sick or disabled members, by granting a weekly sum, not to exceed ten dollars a week, for a time not longer than twenty weeks, consecutively, to be paid to such sick or disabled members, or in such charities as they may direct."
Section 6 provides that " upon the death of a member, each surviving member shall pay into the treasury the mortuary fee stipulated in the certificate of membership, which sum shall constitute a fund, to be paid...
To continue reading
Request your trial