Gibbs v. Knights of Pythias of Missouri

• Decision Date: 08 April 1913
• Citation: 173 Mo. App. 34,156 S.W. 11
• Parties: GIBBS v. KNIGHTS OF PYTHIAS OF MISSOURI.
• Court: Missouri Court of Appeals

156 S.W. 11

173 Mo. App. 34

GIBBS v. KNIGHTS OF PYTHIAS OF MISSOURI.

St. Louis Court of Appeals. Missouri.

April 8, 1913.

1. INSURANCE (§ 767)—LIFE INSURANCE — BENEFICIARY.

In absence of contrary stipulation, the designation of the beneficiary in a life policy, if valid in its inception, remains so, though the insurable interest or relationship of the beneficiary has ceased.

2. INSURANCE (§ 725)—LIFE INSURANCE — MODIFICATION OF CONTRACT.

An insurance contract may be subsequently modified as to material terms by the parties, after which the rights of the parties are governed by the modified contract.

3. INSURANCE (§§ 716, 718) — FRATERNAL BENEFIT INSURANCE—CONTRACT.

A fraternal benefit certificate is always subject to the charter powers and constitution and by-laws of the order, when expressly agreed to; the rights of the parties being otherwise controlled by the contract, however.

4. INSURANCE (§ 770)—FRATERNAL BENEFIT INSURANCE—BENEFICIARIES.

Rev. St. 1889, § 2823, authorizing a fraternal benefit insurance company to provide for the relief and aid of its members and their families, widows, orphans, or other kindred dependents of deceased members, forbids the designation of a stranger not related by blood or marriage, nor dependent upon a member, as a beneficiary under the certificate.

5. INSURANCE (§ 780)—MUTUAL BENEFIT INSURANCE—APPOINTMENT OF BENEFICIARIES.

Until insured's death, a new beneficiary may be designated by insured to take under a fraternal beneficial certificate, providing the beneficiary be qualified as such under the charter provisions of the association.

6. INSURANCE (§ 770)—MUTUAL BENEFIT INSURANCE.

Since it is against the policy of the law to permit the funds of a fraternal association to be diverted to others than the beneficiaries contemplated by statute, an insured may not indirectly, as by will, designate one not qualified as a beneficiary under the certificate.

7. INSURANCE (§ 777)—MUTUAL BENEFIT INSURANCE — RECOVERY — BENEFICIARIES — RECOVERY BY REPRESENTATIVE.

Though a fraternal beneficial certificate was ultra vires, in that it was payable to insured's personal representative, when the charter of the association required the beneficiary to be a relative or dependent, the association cannot on that ground defeat recovery under the certificate where the contract has been fully executed, but the personal representative may recover it, but only in trust for the charter beneficiaries.

8. EXEMPTIONS (§ 50)—MUTUAL BENEFIT INSURANCE.

In view of both the obvious intent of the statute regulating fraternal benefit associations, and an express provision thereof, and the direct provisions of Rev. St. 1909, § 7120, the benefit is exempt from attachment and execution or other claims of decedent's creditors.

9. EXECUTORS AND ADMINISTRATORS (§ 75)—ACTIONS—RECOVERY.

As a rule, an executor or administrator represents decedent generally, and in an action as such recovers to the use of the estate, so as to make the recovery available to all persons having just claims against the estate.

Appeal from St. Louis Circuit Court; Chas. Claflin Allen, Judge.

Action by Abraham Gibbs, as executor of James Williams, deceased, against the Knights of Pythias of Missouri, subordinate to the Supreme Lodge Knights of Pythias of North and South America, Europe, Asia, and Africa. From a judgment for plaintiff, defendant appeals. Reversed and remanded, with directions to render a certain judgment for plaintiff.

W. R. Hill, of St. Louis, for appellant. F. H. Bacon and Schlichting & Fisher, all of St. Louis, for respondent.

NORTONI, J.

This is a suit on a certificate of life insurance. Plaintiff recovered, and defendant prosecutes the appeal.

The principal question for consideration relates to the right of a personal representative of the insured, who is one not included within the class of beneficiaries authorized by our statute, to recover on the certificate when it appears the insured fully performed all of the conditions on his part, and the contract is fully executed excepting its payment by defendant. Subsidiary to this are the questions: If the executor is allowed to recover, may he do so in the interests of a legatee under the will to whom the insured bequeathed the fund or whom he nominated in the will as beneficiary thereof when it appears such legatee or beneficiary is not one of the class denominated by our statute as competent to receive such benefits; or shall the recovery be for the benefit of the estate of the insured and the fund turned into its corpus as available to all creditors; or may he recover alone as in trust for the benefit of those persons contemplated by the statute as beneficiaries and pointed out by the by-laws of the order as the recipients of the fund when no designation of a beneficiary has been made?

The suit proceeds jointly on the same certificate of insurance against two incorporated fraternal societies on the theory that, though one alone issued the certificate in the first instance, the other thereafter assumed its obligation, and, by collecting all of the dues and assessments from the insured member, became liable to respond thereon in accordance with its terms. There is no controversy touching the facts, for they are all set forth in an agreed statement on which a general judgment was given for plaintiff executor, who is himself the sole legatee under the will of the insured. The certificate of life insurance was issued to the insured, James Williams, on September 30, 1892, by defendant "Supreme Lodge Knights of Pythias of North and South America, Europe, Asia, and Africa," a fraternal beneficiary association, incorporated and with headquarters in the District of Columbia. It appears that this company never qualified as a fraternal beneficiary association under the Missouri Statutes and was therefore not licensed to do the business of life insurance as such in this state at the time the certificate in suit was issued. Notwithstanding this fact, the Supreme Lodge Knights of Pythias of North and South America, Europe, Asia, and Africa, established subordinate lodges here, one of which was Mound City Lodge No. 4, located in the city of St. Louis. The insured affiliated with this lodge and, as before said, on September 30, 1892, received through it the certificate of life insurance payable at his death in the amount of $300 to his "legal representative or representatives." He paid all assessments and dues on the certificate, and as a member of the order as they accrued and were levied to the Supreme Lodge which had issued it until by an arrangement with all of its members that order, acting through the Supreme Lodge, organized and incorporated as subordinate thereto the defendant Grand Lodge Knights of Pythias of the state of Missouri. And thereupon and thereafter the insured paid all assessments and dues to the latter. It appears that in 1893, or about one year after the certificate was issued by the Supreme Lodge, the Grand Lodge Knights of Pythias of Missouri was incorporated in this state and under our statute authorizing such societies as subordinate to the Supreme Lodge, with headquarters in the District of Columbia, and succeeded to all of the affairs of the Supreme Lodge in Missouri. In September, 1893, the Supreme Lodge Knights of Pythias of North and South America, Europe, Asia and Africa withdrew entirely from further operations in the state of Missouri, and the Grand Lodge Knights of Pythias of Missouri assumed full and complete jurisdiction over the various subordinate lodges of the order in Missouri, among which was Mound City Lodge No. 4 of which the insured was then a member, and assumed, too, the obligations of the Supreme Lodge to its members on certificates of insurance, and all of the members, among them the insured, James Williams, agreed to this arrangement. Thereafter the insured paid all of his assessments and dues on his certificate as a member of the order to the Grand Lodge of the state of Missouri, so incorporated and operating under our statutes, and performed all the conditions imposed by the contract on his part until the date of his death, which occurred November 7, 1909. During all of those years the insured retained his original certificate of insurance issued to him by the Supreme Lodge in 1892, and at no time surrendered it to or requested a new certificate in lieu thereof from the Grand Lodge of the state of Missouri under whose jurisdiction he had come, and which had undertaken, with his consent, to assume the obligation of the Supreme Lodge in that behalf. By his last will the insured, James Williams, appointed the plaintiff, Abraham Gibbs, as his sole legatee thereunder, and also nominated him as the executor of the will. It may be that it was competent for the insured to thus dispose of the benefit under the original certificate, but it is admitted that Gibbs, the recipient of the bounty as designated in the will, was not a member of the family of the insured, nor related to him by blood or otherwise, nor dependent upon him in any manner, and is therefore not within the class of persons authorized to take such benefits under our statute. As before stated, the suit proceeds against both the Supreme Lodge, incorporated in the District of Columbia, which originally issued the certificate, and the Grand Lodge, incorporated in Missouri, as if it assumed its payment. Though both defendants were duly served, the Supreme Lodge did not appear, but suffered judgment to go against it by default, and the Grand Lodge who prosecutes this appeal defends alone on the ground that it is not competent for the personal representative to recover on such certificate, and especially when the recovery is sought in behalf of a beneficiary not authorized under the Missouri statute.

We are not concerned with the powers of the Supreme Lodge which originally issued the certificate of insurance under its charter in the District of Columbia,...