Brown v. The Grand Lodge of Ancient Order of United Workmen, and Grace

• Decision Date: 26 May 1890
• Citation: 45 N.W. 884,80 Iowa 287
• Parties: BROWN v. THE GRAND LODGE OF THE ANCIENT ORDER OF UNITED WORKMEN, AND GRACE, Intervenor
• Court: Iowa Supreme Court

45 N.W. 884

80 Iowa 287

BROWN v. THE GRAND LODGE OF THE ANCIENT ORDER OF UNITED WORKMEN, AND GRACE, Intervenor

Supreme Court of Iowa, Des Moines

May 26, 1890

Decided May, 1890.

Appeal from Delaware District Court.--HON. JOHN J. NEY, Judge.

ACTION to recover the avails of a certain beneficiary certificate issued by the defendant. The defendant, not questioning its liability for the payment of the amount specified in the certificate, paid the same into court for the party legally entitled thereto; and hence the controversy is between the plaintiff and the intervenor. The plaintiff was a daughter of the assured, and the intervenor was his wife by a second marriage, but not the mother of the plaintiff. Two certificates were issued by the defendant, in the first of which the plaintiff was named as beneficiary, and in the second the intervenor. The district court found the facts, of which the following are the substance so far as needed on this appeal: About 1878 or 1879, James Grace delivered the first certificate to the plaintiff; she being then about fourteen years of age. The plaintiff retained it, either in her own custody or that of her mother, until February, 1887. Prior to February, 1887, James Grace married the intervenor and in February, 1887, he obtained the certificate from the plaintiff by representing to her that he desired it for the purpose of making her sister Kate a joint beneficiary therein, the plaintiff agreeing thereto. At this time plaintiff had no knowledge that her father had again married. After obtaining the certificate, James Grace presented it to the defendant society, and obtained a second certificate with the intervenor named as beneficiary. James Grace died in July, 1888, and this action is to determine the rightful owner of the avails of the certificate. The by-laws of the society contain the following provision: "Any member holding a beneficiary certificate, desiring at any time to make a new direction as to its payment, may do so by authorizing such change, in writing, on the back of his certificate, in the form prescribed." The district court, as a conclusion of law applicable to such facts, found for the intervenor, and gave her judgment for the avails of the certificate. The plaintiff appeals.

AFFIRMED.

A. J. P. Garesche and Bronson & Carr, for appellant.

Blair, Dunham & Norris, for intervenor, appellee.

OPINION

GRANGER, J.

It should be conceded at the outset that James Grace obtained the certificate from plaintiff by misrepresentation or fraud. We regard this fact as found by the district court, and we must consider the case with it in full view. With this point settled at the outset, we dispose of much said in argument in relation thereto, and bring ourselves to what we regard as the controlling question in the case.

Appellant concedes that if James Grace had procured the certificate with plaintiff's name therein as the beneficiary, and had retained possession thereof, he would have had the right to surrender it, and take a new certificate with another person as beneficiary, because he could then surrender the certificate, as he was required to do by the laws of the order. But it is urged that in this case he had parted with the possession of the certificate, and made a gift thereof to the plaintiff, by which she obtained a vested right or interest therein; and this is urged as the distinguishing feature of the case. Inasmuch as the certificate was in the possession of James Grace, and by him surrendered when the new certificate issued, the force and effect of such possession is sought to be avoided by the fact that the possession was fraudulent, and that James Grace could legally take no advantages from such possession. We think it must be conceded that the possession of the certificate by James Grace gave him no rights, as against plaintiff, that he was not entitled to before she surrendered the certificate. If she had such a vested interest therein that she could legally have refused her father the possession thereof for the purpose of changing the beneficiary, as he did, we should strongly incline to the view--with the situation of this case as to the parties actually in interest--that he could not defeat such right by such indirect or fraudulent methods. If on the other hand, she had no such interest in the certificate as would justify her in retaining it from him, if he desired it for such purpose, then she suffered no prejudice from the fraud, and is in no position to complain, or at least she is not in a position, because of fraud, to claim as absolutely hers what before was only conditionally so. What, then, were the rights of the plaintiff because of the fact of her possession of the certificate? The authorities will be better understood if we keep in view the effect of naming a person in a certificate as beneficiary without surrendering to him the possession, which is that it gives to such person no rights before the death of the assured, and that the certificate is revocable at the pleasure of the assured, under the provisions of the laws of the society. The authorities on the point are uniform, and are not questioned in this case. How, then, does the mere delivery of the certificate to the beneficiary change the right? It being only the evidence of what in law is a mere expectancy, the delivery of it conveys no present right; for no present right exists. The assured has no vested property rights that he can convey. Bac. Ben. Soc., sec. 289. The section says: "The member of a beneficiary organization, on the other hand, as we have seen, has no property interest in the benefit, but only the naked power of designating some one to receive it. This designated recipient, also, has no property nor vested rights in the benefit, because his...