Grand Lodge A. O. U. W. v. McFadden

• Decision Date: 03 July 1908
• Citation: 213 Mo. 269,111 S.W. 1172
• Parties: GRAND LODGE A. O. U. W. v. McFADDEN et al.
• Court: Missouri Supreme Court

111 S.W. 1172

213 Mo. 269

GRAND LODGE A. O. U. W. v. McFADDEN et al.

Supreme Court of Missouri, Division No. 1.

July 3, 1908.

1. INSURANCE—MUTUAL BENEFIT INSURANCE —BENEFICIARIES—NATURE OF INTEREST.

It is the universal law that a beneficiary named in a fraternal benefit certificate has no vested interest therein.

2. SAME—CHANGE OF BENEFICIARY.

The designation of a beneficiary in a certificate is but a present expression of the member's will, revocable at any time, and, unless the laws of the state where the association is incorporated or its charter or by-laws or the terms of the certificate itself prohibit the member changing the name of the beneficiary, he may do so, as he may change the name of a legatee in his will; but where an association's rules and regulations provide a specific method for so doing they must be substantially complied with.

3. SAME—ESTOPPEL.

The wife of a member of a fraternal benefit association, designated as beneficiary in his certificate of membership, by merely paying the assessments under a tacit agreement between them that she should do so, does not acquire such an equity in the certificate as to estop him from exercising his right to make a new designation, and the designation of another as beneficiary entitles the latter to the fund if the change is made in substantial compliance with the association's regulations.

4. WORDS AND PHRASES—"DUPLICATE."

A "duplicate" is an original instrument reproduced, not a new agreement, but merely written evidence of the lost instrument to take its place.

5. INSURANCE — MUTUAL BENEFIT INSURANCE —CHANGE OF BENEFICIARY — COMPLIANCE WITH REGULATIONS—WAIVER.

Strict compliance with regulations for a change of a beneficiary, intended solely to protect the association, may be waived by it when a beneficiary has no vested right in the certificate.

6. SAME.

The laws of a beneficial order provided that, when a certificate was not under the control of a member, he might have a duplicate on making an affidavit to the facts and by executing a release of rights under the original, and in accordance therewith a duplicate was issued to a member, changing the name of the beneficiary as authorized in writing by him, though the by-laws provided that a member desiring such change might do so by authorizing it in writing on the back of the certificate; the old certificate, if possible, to be filed, and a new certificate issued thereon. Held, that the member, not having the original certificate on which to indorse authority for the change, did all that was in his power under the circumstances to

effect it in strict compliance with requirements, and that he and the association, being the only persons having a vested interest in the certificate, could waive the formality of indorsing authority on the back of the duplicate and having a new certificate issued, and the duplicate certificate was a binding contract.

7. SAME—RIGHTS OF BENEFICIARY PREVIOUSLY DESIGNATED.

When a wife with her own means kept alive for 12 or 13 years benefit insurance on her husband's life by paying the assessments while she was the beneficiary, she is entitled to so much of the fund on his death as will make her whole, notwithstanding he made a subsequent valid change in favor of another beneficiary, who is entitled to the fund.

Appeal from St. Louis Circuit Court; Daniel D. Fisher, Judge.

Action of interpleader by the Grand Lodge A. O. U. W. of Missouri against Bridget McFadden and Mary O'Malley; each claiming the amount payable on a benefit certificate. From a judgment in favor of Bridget McFadden, Mary O'Malley appealed to the St. Louis Court of Appeals, which certifies the case to the Supreme Court for its decision. Reversed.

The plaintiff began this suit in the circuit court of the city of St. Louis by filing therein a bill of interpleader, alleging, in substance, that it was a fraternal beneficial organization, duly authorized to issue benefit certificates to its members, and that in the year 1886 Michael McFadden became a member of the association, and that it issued to him a benefit certificate for the sum of $2,000, payable to his wife, Bridget McFadden, upon his death, upon certain conditions stated in the bill. It then alleges that about 10 years after the issuance of this certificate McFadden had a falling out with his wife, and he then had that certificate canceled and a new one issued in favor of Mary O'Malley, an adopted daughter. McFadden died in the year 1903, and both his widow and adopted daughter presented claims to the association for the $2,000; each claiming to be the legal owner thereof. The bill then states that the interpleader did not know which of the two really owned the fund, and asked permission to bring it into court, and that the respective claimants be required to interplead for the same. The permission was granted, and the money was deposited in court, and they were ordered to interplead therefor. Each of them filed their interplea, setting up their respective claims to the money, and after the issues were joined the cause was tried before the court, which resulted in a finding and judgment for the widow, and the daughter duly prosecuted her appeal to the St. Louis Court of Appeals. The latter court reversed the judgment of the circuit court, with directions to repay Mrs. McFadden all premiums she had paid on the certificate, with 6 per cent. interest from the time each payment was made, and to pay the balance of the fund to Mary O'Malley. But as the opinion of the court was in conflict with the opinion of the Kansas City Court of Appeals delivered in the case of Grand Lodge A. O. U. W. v. Ross, 89 Mo. App. 620, the cause was for that reason certified to this court.

Walther & Muench and F. H. Bacon, for appellant. Bass & Brock, for respondents.

WOODSON, J. (after stating the facts as above).

We have very carefully read and considered the opinion of the St. Louis Court of Appeals in this case, and the opinion of the Kansas City Court of Appeals in the Ross Case, as well as the briefs and authorities cited by learned counsel for the respective parties to this suit, and, after a very careful consideration, we have reached the conclusion that the opinion of the St. Louis Court of Appeals correctly decides the case, which we affirm in all particulars and adopt as the opinion of this court, which is as follows:

"Plaintiff, a fraternal beneficiary association, on September 12, 1886, issued to Michael McFadden, a member of Meta Lodge No. 19, of said association, a benefit certificate for the sum of $2,000, payable at the death of said Michael McFadden to his wife, Bridget. About 13 years prior to his death, which occurred April 7, 1903, Michael drove his wife and children from his home and thereafter lived separate from his wife, making his home most of the time with a married daughter until about the month of April, 1901. After this time he was taken care of by John O'Malley, father of appellant, Mary O'Malley. Early in the year 1901, McFadden sent the certificate by one of his daughters to his wife with a message to her to the effect that he was having some trouble with some gentlemen who owed him money, and that if anything should happen to him she would have the certificate to protect herself and take care of her. The evidence shows that Bridget, out of her own funds, paid all the assessments levied against McFadden by the society until about January 1, 1901, and that she offered to pay assessments after January, 1901, but the lodge officers refused to accept her tenders. The amount paid by her in assessments was shown to be about $450.

"In March or early in April, 1901, the evidence is that Michael McFadden approached John O'Malley and represented to him that he had separated from his family and had no one to take care of him, that he was too old to work, and that, if something was not done, he would soon have to go to the poorhouse, and proposed to Mr. O'Malley to adopt Mary O'Malley, the minor daughter of John, as his daughter and heir and designate her as the beneficiary in his certificate of insurance, if John O'Malley would take care of him the balance of his days. O'Malley assented to the proposition, and thereafter, to wit, April 5, 1901, with the intent of designating Mary O'Malley as his beneficiary, McFadden made the following affidavit: "The undersigned, Michael McFadden, being duly sworn, does depose and say that he is a Workman Degree Member in good standing in Meta Lodge No. 19, located in St. Louis, state of Missouri, that the number of his beneficiary certificate is 25,609, that said beneficiary certificate is payable to his wife, Bridget McFadden, and was issued at St. Louis, Missouri, by the Grand Lodge of the Ancient Order of United Workmen of Missouri, on the 12th day of September, 1886. The undersigned further deposes and says that the said beneficiary certificate is not in his possession or under his control but is withheld from him. In consequence of the said detention and withholding beneficiary certificate, the undersigned does hereby make application for a duplicate certificate, which he asks may be issued to him in the place of the original beneficiary certificate, above described, and as a condition necessary to the issuance of said duplicate, the undersigned Michael McFadden does hereby cancel and annul said original benefit certificate and relinquish all rights, benefits and claims that may at any time arise, either to him or his beneficiaries under the said original beneficiary certificate described at the outset, and directs that a new benefit certificate be issued to him in which payment shall be made to Mary O'Malley, bearing relation to me of adopted daughter—said new certificate to be then issued in lieu of the original which therefore shall become null and void.' And on the same date executed and acknowledged the following deed of adoption: `Know all men by these presents, that I, Michael McFadden...