Carruth v. Clawson

• Decision Date: 12 December 1910
• Citation: 133 S.W. 178,97 Ark. 50
• Parties: CARRUTH v. CLAWSON
• Court: Arkansas Supreme Court

133 S.W. 178

97 Ark. 50

CARRUTH v. CLAWSON

Supreme Court of Arkansas

December 12, 1910

Appeal from Sebastian Circuit Court, Fort Smith District; Daniel Hon, Judge; reversed.

Judgment reversed.

Read & McDonough, for appellant.

1. There being no by-law of the association on the subject, the custom of the association and the interpretation of its laws by its officers would govern; and the proof is clear that they have construed its laws to authorize a member to change his beneficiary at any time. Such custom and practice has the force of by-laws. 67 P. 609; 56 A. 289; 58 Miss. 421; Field on Corporations, § 305; 37 Vt. 431; 16 Ohio Cir. Ct Rep. 50.

2. Caruth's letter was sufficient to constitute a change of beneficiary. 80 S.W. 1152; 26 Ky. Law Rep. 300; 96 N.W.806 119 Wis. 312; 119 Ind. 448; Niblack, Ben. Soc. & Acc. Ins § 223.

Youmans & Youmans, for appellee.

OPINION

MCCULLOCH, C. J.

David B. Carruth, now deceased, was a member of the Arkansas Travelers' Association, a fraternal society which paid death claims to the designated beneficiaries of its members, and this action involves a controversy between two rival claimants of the benefit fund of said member. Appellant, Mrs. Sue Carruth, the last-designated beneficiary, is the widow of said deceased member, and appellee, Jennie May Clawson, who was originally designated as the beneficiary, was a distant relative of said member. Said association holds itself in readiness to pay the benefit fund to the one which the court decides is legally entitled to it. The particular questions involved are, whether the member had the right to change the beneficiary without the consent of the person originally designated, and whether the member did in fact change it. There is no dispute as to the facts of the case. The only certificate issued by the association to its members was in the nature of a receipt in the following form:

"No

$ 2.00

"Arkansas Travelers' Benefit Fund of the Arkansas Travelers' Association.

"Received of $ 2.00 for first assessment for the Arkansas Travelers' Benefit Fund. Name of beneficiary Relation Address Street No. State of Little Rock, Arkansas.

"Prest. Ark. Travelers' Association.

"Countersigned:

"Sec. and Treas. Benefit Fund.

"Sec. Arkansas Travelers' Ass'n. "

The only by-laws of the association which bear on the present controversy read as follows:

"Fourth. That each member of the Arkansas Travelers who has paid in advance the two-dollar membership fee can pay to the secretary of the association the sum of two dollars, said two dollars to be known as the Arkansas Travelers' Benefit Fund, and so carried on the books of said order as such.

"Fifth. The secretary shall give a receipt to said member for the amount paid by him upon his naming his beneficiary, postoffice address and relation of said beneficiary. * * *

"Seventh. That, upon the death of a member of this order who has paid his annual dues and benefit fund dues, the secretary be authorized to wire the beneficiary of said deceased member the entire amount of one dollar per member to the credit of the benefit fund, and notify each member to pay in another assessment of one dollar within 30 days, to replace the amount so paid out."

Carruth was unmarried when he joined the association, and he designated appellee as beneficiary, her name being written in the receipt issued to him. This receipt never, so far as the evidence discloses, passed out of his possession. Subsequently, appellant became his wife, and he died on February 22, 1909. On that day the secretary of the association received at Pine Bluff, Arkansas, the following letter signed by Carruth, who lived at Fort Smith at the time of his death:

"Fort Smith, Ark., February 21, 1909.

"Mr. Guy B. Lefler,

Pine Bluff, Arkansas.

"Dear Sir: I have lost my policy. I want you to change my beneficiary from Jennie May Clawson to my wife, Sue Carruth, and mail same to her at No. 1008 North Twenty-sixth Street, Fort Smith, Arkansas. (Signed) D. B. Carruth."

The circuit court declared the law to be, upon those facts, that appellee Jennie May Clawson had a vested interest in the benefit which could not be divested without her consent, and rendered judgment in her favor for the amount. Appellee relies, and the circuit court evidently based its conclusion on the decisions of this court in Block v. Valley Mutual Insurance Association, 52 Ark. 201, 12 S.W. 477, and Johnson v. Hall, 55 Ark. 210, 17 S.W. 874, where it was held (quoting the syllabus in the last-cited case) that "a certificate issued by a mutual benefit society by which it agrees, at the holder's death, to pay a certain sum of money to the holder's children constitutes an ordinary policy of insurance; and the holder has no power to change the beneficiaries named in the certificate unless expressly...