Bright v. Supreme Council of Catholic Knights and Ladies of America

• Decision Date: 25 February 1919
• Citation: 183 Ky. 388,209 S.W. 379
• Parties: BRIGHT v. SUPREME COUNCIL OF CATHOLIC KNIGHTS AND LADIES OF AMERICA ET AL.
• Court: Kentucky Court of Appeals

209 S.W. 379

183 Ky. 388

BRIGHT v. SUPREME COUNCIL OF CATHOLIC KNIGHTS AND LADIES OF AMERICA ET AL.

Court of Appeals of Kentucky.

February 25, 1919

Appeal from Circuit Court, Graves County.

Action by Joseph A. Bright against the Supreme Council of Catholic Knights and Ladies of America, and others who claimed to share in the proceeds of a benefit certificate which were paid into court by the named defendant. From a judgment denying plaintiff's claim to the whole of the proceeds he appeals. Affirmed.

Robbins & Robbins, of Mayfield, for appellant.

J. C Speight, T. J. Murphey, and W. S. Foy, all of Mayfield, for appellees.

HURT J.

On the 19th day of May, 1905, Valentine E. Bright obtained a policy of insurance or benefit certificate, which was issued to him upon his application, by the Supreme Council of the Catholic Knights and Ladies of America. The insurer is a fraternal society, under the supervision of a grand or supreme body and secures its membership through the lodge system exclusively, and does not pay commissions nor employ agents, "except in the organization and supervision of the work of local or subordinate lodges or councils." The beneficiaries named in the certificate were the three children of the insured: The appellant, Joseph A. Bright; Odella Bright, later Heathcote, the mother of the appellees; and Robert E. Bright. By the terms of the certificate, the benefit was to be paid to the three beneficiaries, equally, after the death of the insured. The benefit was the sum of $2,000. The conditions under which the society agreed to pay the benefit, and the persons to whom it was to be paid, are set out in the policy as follows:

"Upon condition, that the statements by him, made in his application for membership in said branch, the representations and agreements made and subscribed to, by him, in the medical examiner's blank, and the answers given and certified by him, to the medical examiner, all of which representations, agreements, statements, and answers, are, hereby declared to be warranties, and are made a part of this contract, and upon condition, that the said member complies, in the future, with all laws, ruler and regulations now governing the said branch or order, or that may hereafter, be enacted by the Supreme Council, to govern said branch or order, all of which, are, also, made a part of this contract. These conditions, being assented to, and complied with, the Supreme Council Catholic Knights and Ladies of America, hereby, promise and binds itself to pay out of the widows' and orphans' benefit fund, to his children, Joseph A., Odella, and Robert E. Bright, equally, the sum of two thousand dollars, in accordance with, and under the provisions of the laws, governing said fund, upon satisfactory proof of the death of said member, and, upon surrender of this certificate provided, that said member is in good standing in this order, at the time of his death and provided, also, that this certificate shall not have been surrendered by said member, and another certificate issued at his request in accordance with the laws of this order."

The widows' and orphans' benefit fund is created by a levy of assessments upon the members of the order, by the laws and regulations prescribed by the Supreme Council.

The insured died on the 4th day of October, 1917; but, preceding his death, his daughter, Odella Heathcote, died on January 21, 1910, leaving three children surviving her, and his son Robert E. Bright died on October 10, 1912, leaving no children. On April 21, 1911, the insured executed a last will and testament, by which he devised to the children of Odella Heathcote one-third of the sum to be derived from the benefit certificate, and to each of his two sons, one-third of it.

There was a provision of the constitution and by-laws of the society, and which was in force previous to and at the time of the death of the insured, and which provided that, if a member desired to change the beneficiary in the certificate held by him, he should give written notice and surrender his certificate, with the designation of the person to whom he desired a new certificate to be issued, in which instance the old certificate would be canceled, and a new one issued to the member instead, payable to the desired beneficiary, if not contrary to the laws of the order. The insured never made any attempt, nor expressed any desire, to have the certificate changed so as to designate other or different beneficiaries from the ones originally named.

By another by-law of the society, it was provided that no entry should be made in any application, or in any certificate, by which a member should be permitted to designate a beneficiary by reference to any will of the member or the amount or share of any beneficiary, and that no will should be permitted to control or affect the apportionment or distribution of, or rights of any person to, any benefits payable by the order, and neither should any member be permitted to designate his "estate" as the beneficiary, and, in the event no person or persons "are entitled to the benefit, it shall revert to the benefit fund."

During the lifetime of the insured, but subsequent to the repeal of section 679, Ky. Stat., to the extent that its provisions affected a fraternal society, such as the insurer in the present instance, the constitution and by-laws of the society were changed so that they provide that the death benefits to be paid by the society shall be confined to wife, husband, relative by blood to the fourth degree, father-in-law, mother-in-law, son-in-law, daughter-in-law, stepfather, stepmother, stepchildren, children by legal adoption, or to a person or persons dependent upon the member, and in certain instances to a charitable institution, upon which the member is dependent. Another clause of the by-law is to the effect that--

"In case of the death of one or more of the beneficiaries, before the death of the member, the amount of the certificate or policy, shall be paid to the survivor or surviving beneficiaries."

A further provision is to the effect that--

"If the law of the state, where the member resides, or the branch is located, is more limited or circumscribed or more liberal than the charter of the order as to persons or classes, or subjects allowed to have the benefits of fraternal insurance money, then the law of the state, where the insured member resides or the branch is located shall be observed."

This action was instituted by Joseph A. Bright, who sought to recover the entire amount of the benefit certificate, as being the only surviving beneficiary named in the certificate. The Supreme Council, the insurer, deposited the amount of the benefit in court, and had no further interest in the controversy. The appellees, the three children of Odella Bright, or Heathcote, claim one-half of the benefit as the heirs of their mother and uncle, Robert E. Bright. The court, sustaining a general demurrer to the reply, as amended, of Joseph A. Bright, rendered a judgment directing one half of the benefit to be paid to the children of Odella Heathcote, and the other half to Joseph A. Bright, and from that judgment he has appealed.

The...