Kaufman v. Blackman

• Decision Date: 09 February 1951
• Docket Number: No. 14305,14305
• Citation: 239 S.W.2d 422
• Parties: KAUFMAN et al. v. BLACKMAN et al.
• Court: Texas Court of Appeals

Page 422

239 S.W.2d 422

KAUFMAN et al. v. BLACKMAN et al.

No. 14305.

Court of Civil Appeals of Texas, Dallas.

Feb. 9, 1951.

On Rehearing April 6, 1951.

Further Rehearing Denied May 11, 1951.

Mohrle, Oster & Kaufman, of Dallas, for appellants.

Saner, Jack & Sallinger and Jno. N. Harris, Jr., all of Dallas, for appellees.

BOND, Chief Justice.

This is an action in bill of interpleader for summary judgment instituted by The Praetorians, a fraternal benefit Association, to determine who is entitled to receive a fund deposited into Court under a death benefit certificate issued by the Association to Dora Gottlieb, payable at death to Eunice Blackman, beneficiary (appellee here).

In its petition The Praetorians alleged and the record shows that The Praetorians is a fraternal benefit society, incorporated, existing, and doing business under and by virtue of the laws of the State of Texas, Chapter 8, Title 78, Art. 4820 et seq., Vernon's Texas Rev.Civ.St.; that on or about March 28, 1931, on application of Dora Gottlieb, it issued a benefit certificate No. 222749 in the sum of $2,000 on her life, with Eunice Blackman beneficiary; which certificate among other things states as follows: 'That the certificate, the charter or articles of incorporation, the Constitution and laws of The Practorians, and the application herefor, and the medical examination signed by the applicant, with all amendments to each thereof, shall constitute the agreement between The Praetorians and the insured'.

The interpleader further alleged that by reason of the misstatement of age on the part of the insured in her application for the insurance, there is due and owing on said certificate the sum of $1,454.50 which it tendered into court as beloning either to Eunice Blackman, the named beneficiary, or to the children of Sam T. Kaufman, deceased (appellants), by virtue of the assignment.

The benefit certificate, copy of which is attached to the interpleader's petition, is made payable to Eunice Blackman, beneficiary, the daughter of Dora Gottlieb, subject to the right of change of beneficiary by the insured and subject to the other provisions therein named. One of the provisions, pertinent here, is: 'The beneficiary or beneficiaries named in this certificate have no vested interest in same, and may be changed at any time by the insured making written request on The Praetorians' form therefor and filing the same at its home office and furnishing this certificate for endorsement of said change thereon.'

The certificate appears to have been dated April 6, 1931.

On or about March 10, 1941, the insured Dora Gottlieb executed, signed, and notarized an assignment of the aforesaid certificate to Sam T. Kaufman, a copy of which assignment on March 12, 1941, was filed with the interpleader (the insurer) and attached to the certificate. It reads as follows: 'Absolute Assignment of Policy. State of Texas, County of Dallas. Know All Men By These Presents: For and in consideration of the sum of One Dollar to me in hand paid, and for other valuable consideration, the receipt whereof is hereby acknowledged, I hereby sell, assign, transfer, set over and convey to Sam T. Kaufman whose post-office address is 301 Fidelity Bldg., Dallas, Texas, all my right, title and interest in and to Policy No. 222749, issued on the life of Dora Gottlieb, by The Praetorians, of Dallas, Texas, and all moneys due or to become due and payable under the same, together with full and complete authority to exercise any and all options, benefits and rights as provided in said policy, and all benefits accrued or to accrue under and by virtue of the terms, covenants or conditions thereof, inclusive of the absolute right to surrender said policy and to receive and collect the cash surrender value thereof, without notice to or consent of the assignors or either of them, and at the sole option and/or election of the assignee; and for the same consideration I do also, for my heirs, executors and administrators, guarantee the validity and sufficiency of the foregoing assignment to the above named assignee, his heirs, executors, administrators, successors or assigns; and his title to said policy will forever warrant and defend. The assignee is authorized to receive, collect and receipt for any money or thing of value due or to become due under said policy, or as provided thereby, as fully and completely as the assignors, or either of them, might or could do if this assignment had not been made, hereby releasing The Praetorians of and from all responsibility with reference to the application thereof and of and from all other and further liability by reason of the payment so made. In witness whereof, I have hereunto set my hand this 10th day of March, 1941. / s/ Dora Gottlieb. (Notarized by Certificate) Execute In Triplicate Attach one copy to policy, one to Company and policyholder.'

The Constitution and Laws of The Praetorians, Article XXI, provides:

'Section 1. The beneficiary named in any application made by the insured may include the wife, any relative, fiance, business associate, trustee, charitable institution, persons dependent upon the insured or to the estate of the insured or any persons, interests or entity not forbidden by law. (Emphasis ours.)

'Section 2. If the policy holder desires to change beneficiary, or beneficiaries, he shall deliver his policy to the cashier of his Council, or direct to the Home Office of The Praetorians, together with a properly executed written application for such change on forms prepared by The Practorians.'

The claim of appellants (the children of the assignee, Sam T. Kaufman) is grounded upon the assignment and the applicable terms of the certificate and the Constitution and Laws of the Society; the claim of appellee Eunice Blackman upon her rights as named beneficiary in the certificate in consonance with the findings of the trial court as hereinafter related.

The record evidence is not in dispute. The assignee, Sam T. Kaufman, died on March 10, 1941; the insured, Dora Gottlieb, died some eight years later, on November 10, 1949, without making any change in the named beneficiary or in the assignment to Sam T. Kaufman. Eunice Blackman remained the named beneficiary and Sam T. Kaufman the assignee at the time of insured's death. Neither the assignee nor his children were related in any degree to the insured and there is no evidence that any of them had or hold a valid subsisting debtor claim against the insured, or that the assignment was given as security for any debt due the assignee by the insured.

On trial without a jury, the court entered judgment in favor of the named beneficiary, Eunice Blackman, for the fund tendered into court; released the interpleader from all liability under the certificate, allowing it $125 as reasonable attorney fees; and divided the court costs equally between appellants and appellee. To which judgment the appellants excepted and duly perfected this appeal; and here present appropriate points of error gername to their contentions, supra, attacking the judgment as having no support in law and evidence. Appellee counters to sustain her contentions, and cross assigns error to the effect that all costs should have been taxed against the appellants.

The trial court at request of appellants filed findings of fact substantially as above related; and conclusions of law as follows: (1) That the assignment to Sam T. Kaufman is not effective as a change of beneficiary, the Bylaws of the Association providing for such change not having been complied with. (2) That no debt having been established from Dora Gottlieb to Sam T. Kaufman, there can be no recovery by reason of the assignment of the proceeds of the certificate. (3) That Eunice Blackman is entitled to the proceeds of the certificate. And (4) that the court costs should be taxed equally against both claimants.

The law of life insurance in this State, where the change of beneficiary is reserved in policy or certificate, is that during the lifetime of the insured the beneficiary named in the policy has no vested interest therein,-only an expectancy; and that a new beneficiary of the beneficial interest in the policy or certificate may be substituted without consent of the named beneficiary. If the right of change in beneficiary is reserved and the named beneficiary has no vested interest under the terms of the certificate, in absence of law to the contrary the insured has the inherent right to sell, assign, or give away his own property. An insurance certificate with all its present and future contractual benefits is property, a chose in action, and assignable agreeable to the conditions fixed by the insurance carrier under its policy, Constitution and Laws, and such other conditions as not forbidden by the laws of the State.

The rules of fraternal benefit societies or associations are regulated and controlled by statute, Chapter 8, Title 78, Arts. 4820-4859e, exempt from all provisions of the insurance laws applicable to stock and mutual insurance companies. Any fraternal society or association origanized and carried on solely for the mutual benefit of its members and their beneficiaries, not for profit, Art. 4820, supra, is governed by the laws of such society or association; and such fraternal organization may enter into contracts in such form and grant such benefits as its laws may authorize, and make pertinent provisions for the payment of such grants and benefits. Art. 4824, subsec. 2. Article 4831, supra, provides: 'Any person may be admitted to beneficial, or general, or social membership in any society in such manner and upon such showing of eligibility as the laws of the society may provide, and any beneficial member may direct any benefit to be paid to such person or persons, entity, or interest as may be permitted by the laws of the society; provided, that no beneficiary shall have or obtain any vested interest in the said benefit until the...