Grand Lodge of Colored K. of P. v. Harris

• Decision Date: 12 April 1915
• Citation: 109 Miss. 173,68 So. 75
• Court: Mississippi Supreme Court
• Parties: GRAND LODGE OF COLORED K. OF P. v. HARRIS

68 So. 75

109 Miss. 173

GRAND LODGE OF COLORED K. OF P. v. HARRIS

Supreme Court of Mississippi

April 12, 1915

March 1915

APPEAL from the chancery court of Warren county. HON. E. N. THOMAS Chancellor.

Suit by Mamie Harris against the Grand Lodge of Colored Knights of Pythias. From a judgment for plaintiff, defendant appeals.

The facts are fully stated in the opinion of the court.

Reversed and dismissed.

Mayes &amp Mayes, for appellant.

Counsel argue that the original benefit certificate which designated Mamie Harris as the beneficiary, was still in full force and effect at Harris' death, because, they say, the designation of Mamie Harris in the second policy was inoperative and void, and the suit is predicated upon the idea that the first policy was still in full force and effect. That this is not the law, is squarely decided by our own court in Carson v. Bank, 75 Miss. 173, where it is said: "As Carson surrendered to the Supreme Lodge of Knights of Pythias the endowment certificate, payable to his wife, Mary Carson, she can predicate no right to this fund of such surrender certificate as it is canceled."

This decision of our court is in line with the authorities elsewhere. See 29 Cyc., page 92, where it is said: "The issuance of a new certificate in lieu of the original operates as a cancellation of the latter."

Let it be further noted that in all the cases cited by appellee from our own court and elsewhere, no payment had been made by the order before the other contending party propounded a claim. In the majority of cases, the order paid the money into court, and left the contending parties to litigate over the fund. We assert, with perfect confidence, upon reason and authority, that the limit of the right of complainant is to treat Katie Harris, who has been paid the death benefit, as the trustee for the benefit of appellee. That this is sound, see Carson v. Bank, 75 Miss. ; 1 Bacon on Benefit Societies and Life Insurance (3 Ed.), par. 250B; Smith v. Pinch, 80 Mich. 332, 45 N.W. 183; Meyers v. Schumann, 54 N. J. E. 414, 34 A. 1066; 2 Bacon (3 Ed.), paragraph 396, at page 992; Mutual Life Insurance Company v. Blodgett, 8 Tex. Civ. App. 45, 27 S.W. 286; also cases cited Ib.; Sec. 250B., 140 Mass. 590; 143 Mass. 216; and Story v. Association, 95 N.Y. 474.

It, therefore, appears that counsel for appellee are manifestly in error when they state, on page 13 of their brief: "Mamie Harris was never a stranger to the contract, because the contract was never severed that existed between her and the order." That it was severed and cancelled is settled by Carson v. Bank, and the other authorities cited supra.

We respectfully submit that this court should reverse the decree of the court below, and enter a decree here for appellant.

Latham & Latham, for appellant.

In Supreme Court, etc., v. Gehenback, 124 Colo. 43, 56 P. 640, it is said: "The beneficiary named in the certificate has no interest or property there that her heirs could succeed to. Her interest was a mere expectancy of an incompleted gift. It was revocable at the will of the insured and could not ripen into a right until his death. Her right under the certificate was not unlike that of an heir apparent and that is not to be deemed an interest of any kind." See, also, Hoeft v. Supreme Lodge, 113 Colo. 91, 45 P. 185; Jony v. Supreme Council, 105 No. 1, 94 N.Y. 580.

In Golden Star Fraternity v. Martin, 59 N. J. L. 207, 35 A. 908, the court said: "By the terms of such contracts (those of benefit societies), the beneficiary may be changed by the mere will of the member, and without the beneficiary's consent. In such a case, the right of the beneficiary is not property, but a mere expectancy, dependent on the will of the member, to whom the certificate is issued. For this reason, the beneficiary's interest in the certificate and contract evidenced thereby, differs totally from the interest of a beneficiary named in an ordinary life insurance policy, containing no provision for the designation of a new beneficiary. The cases so far as I can discover are agreed upon this doctrine."

For other cases in point see Masonic Benefit Association v. Bunch, 109 Mo. 560; 19 T. M. R. 25; Hoffman v. Grand Lodge, 73 Mo.App. 47.

From the foregoing cases, we think it is clear that until the death of the said R. D. Harris, there was no possible way for Mamie Harris to have any interest in the fund of the six hundred dollars; there was no property right in the said Mamie Harris that would have to be granted away by her. Mamie Harris was not a party to the contract, because she had no interest therein, so that she is a stranger to the contract, and the parties to the contract could change it at their will, as they did in this case by substituting the name of Katie L. Harris for the name of the complainant, Mamie Harris, in a new policy.

Our own court, in the case of Wherry v. Latimer, 60 So. 563, held: "It is clear from the adjudications of this court that Mr. Wherry had the right at any time to change the beneficiary in his certificate and that no one could complain of it," citing Carson v. Bank, 75 Miss. 167.

In Splawn v. Chew, 60 Tex. 532, a controversy between an original beneficiary and a new one, the court, in speaking of a change of beneficiary, which did not comply with the laws of the order, said: "But like all such provisions in the by-laws of private corporations it may be waived at the option of the corporation, being for its benefit alone," . . . and again:: "It is still a condition for the benefit of the company, to be insisted upon or waived according to their election." Aid Society v. Lupold, 101 Pa. St. 111.

Even if a statute of the state of Mississippi made it beyond the power of the appellant to pay anyone but the "widow, children or other heirs" still the appellee should not be heard to complain as it would then be ultra vires. Appellee would be a stranger to the contract, and the state of Mississippi would be the only person who could complain of the contract in question. See New Orleans, etc., R. Co. v. Elleman, 105 U.S. 166; Old Colony Trust Co. v. Michita, 123 F. 762; Collins v. Rea, 127 Mich. 273; Baker v. Northwestern Guaranty Co., 36 Minn. 185; Sugar Refn'g Co. v. St. Louis Grain Elevator Co., 101 Mo. 192.

Dabney & Dabney, for appellee.

Knowing the weakness of the race it was gross neglect for this order to issue a policy to the insured in the first place without requiring satisfactory proof of the marriage of the beneficiary where that beneficiary is designated as the insured and the wife of the insured; and how much greater is the degree of negligence and want of regard for the rights of, and its duty towards, the appellee, for it to require the surrender of a policy bearing the name of the appellee, and issue a new policy in its place and stead with the name of Katie L. Harris shown as the beneficiary when this very fact put it on notice that there had heretofore been such relations between the insured and this appellee as behooved this appellant to ascertain the true relations between the insured and the beneficiary in the old and new policy before issuing the new policy. We contend, therefore, that this appellant had been given notice from the conduct of the insured and from the contents of the first policy surrendered to it at the time the policy was issued, that it was its duty not to merely believe from the representations of the insured that Katie L. Harris was his wife, but to ascertain and know by a proper investigation, that the representations made by the insured were true. Failing in this, it failed in an implied duty to this appellee...