Henry v. Knights and Daughters of Tabor

• Decision Date: 04 December 1922
• Docket Number: 27
• Citation: 246 S.W. 17,156 Ark. 165
• Parties: HENRY v. KNIGHTS AND DAUGHTERS OF TABOR
• Court: Arkansas Supreme Court

246 S.W. 17

156 Ark. 165

HENRY v. KNIGHTS AND DAUGHTERS OF TABOR

No. 27

Supreme Court of Arkansas

December 4, 1922

Appeal from Pulaski Circuit Court, Second Division; Guy Fulk, Judge affirmed.

Demurrer sustained.

J R. Booker, for appellant.

1. A beneficiary who wilfully takes the life of the insured cannot recover under the policy. 98 Ark. 132. The death of the insured in such case, classes as an excepted risk, as a matter of public policy. 4 Cooley's Briefs on Insurance 3153, and cases cited.

2. The liability of the insurer is not terminated by the death of the insured at the hands of the beneficiary, but, in that case, the heirs at law may recover. 4 Cooley's Briefs, § 3154; 209 Ill. 277, 70 N.E. 567; 7 Cooley's Supplement, 3154, and cases; Vance on Insurance, 392; 7 Am. Law Rep. Ann. 828 and cases; 112 Iowa 41; 135 Minn. 35; 29 Cyc. 156.

Scipio A. Jones, for appellee.

1. While conceding that the wilful slaying of the insured by the beneficiary will forfeit the rights of the latter under the policy, it is denied that the heirs at law are entitled to recover in this case. There is in this State a substantial difference between ordinary life insurance companies and fraternal benefit societies. C. & M. Dig., § 6071. In this action, it is essential to recovery that the complaint allege a breach of the contract. There is no contract, and can be no breach. Neither is there any allegation that the plaintiffs are within the class who may take as beneficiaries, as defined in the statute, C. & M. Dig., § 6074. Therefore the complaint states no cause of action.

2. The plaintiffs cannot recover. A member has no property in the funds created by his contributions, but only a mere right to designate the ultimate beneficiary. If the member makes no designation, no one can do it for him, yet such designation is a condition precedent to the obligation of the society to pay. Here the funds involved revert to the society. 87 Conn. 644; Ann. Cas. 1916-B, 181; 67 Neb. 233; 2 Am. & Eng. Ann Cas. 660; 94 N.Y. 580. This case is ruled by the opinion in 135 Ark. 65. See also 140 Ark. 318; 142 Ark. 142; 1 Bacon on Benefit Societies, 4th ed., 310; 62 N.E. 555; 10 F. 227; 44 Md. 429; 29 Cyc. 157-159; 202 Mass. 85.

OPINION

SMITH, J.

This appeal is from a judgment of the court below, sustaining a demurrer to the complaint on the ground that it did not state a cause of action.

The allegations of the complaint are that the plaintiffs are the sole heirs at law of one Annie Porter, whose life was insured in the defendant insurance company for the sum of $ 300, payable upon her death to her husband, Robert Porter, and that the beneficiary had wilfully murdered the insured, thereby forfeiting his right to the proceeds of the insurance certificate, and defendant had, after demand so to do, failed to pay plaintiffs, as the insured's next of kin, the amount of said policy or certificate.

The defendant insurance company admits that, under the allegations of the complaint, the beneficiary named is not entitled to collect the insurance. This court so held in the case of Metropolitan Life Ins. Co. v. Shane, 98 Ark. 132, 135 S.W. 836. But defendant contends that the heirs at law of the insured cannot recover because the certificate sued on was issued by a fraternal insurance company, and not by an old-line insurance company, and as authority for this insistence defendant cites § 6071, C. & M. Digest, which reads as follows: "Except as herein provided, such societies (fraternal benefit societies) shall be governed by this act, and shall be exempt from all provisions of the insurance laws of this State, not only in governmental relations with the State, but for every other purpose, and no law hereafter enacted shall apply to them, unless they be expressly designated therein."

It is also insisted that no recovery can be had because plaintiffs do not show that they are within any of the clauses of permissible beneficiaries of fraternal benefit societies defined in § 6074, C. & M. Digest; and it is finally insisted by the defendant that a member of the order has no right in the funds created by his payment of dues except to designate a beneficiary to whom the certificate shall be payable on the member's death, and that this designation must be made in the manner provided by the by-laws of the order, and only such beneficiaries can take as are designated properly pursuant to those by-laws, and that the plaintiffs are not so designated.

It is apparent that the complaint is defective, but no motion to make it more specific was filed, and, as we are considering its sufficiency on demurrer, we must consider not only its express allegations, but all inferences fairly deducible therefrom.

The complaint does allege that the plaintiffs are the "sole heirs at law" of the insured, and, while this allegation should have been made specific, had a motion to that effect been filed, we would have to presume, by fair intendment, that one's "sole heirs at law" had an insurable interest in the life of the insured, even as limited by § 6074, C. & M. Digest.

The parties agree that, under the allegations of the complaint the beneficiary named cannot collect the insurance. What...