Kohler v. Kohler, 8812.

• Decision Date: 30 June 1939
• Docket Number: No. 8812.,8812.
• Citation: 104 F.2d 38
• Parties: KOHLER v. KOHLER et al.
• Court: U.S. Court of Appeals — Ninth Circuit

104 F.2d 38 (1939)

KOHLER v. KOHLER et al.

No. 8812.

Circuit Court of Appeals, Ninth Circuit.

May 23, 1939.

Rehearing Denied June 30, 1939.

T. H. MacDonald, of Helena, Mont. for appellant.

Wellington D. Rankin and Arthur P. Acher, both of Helena, Mont. (H. W. Pitkin and John G. Bowes, both of Des Moines, Iowa, of counsel), for appellee Yeomen Mut. Life Ins. Co.

Paul W. Smith, David R. Smith, and J. Miller Smith, Jr., all of Helena, Mont., for appellee Clara Kohler.

Before DENMAN, MATHEWS, and HEALY, Circuit Judges.

MATHEWS, Circuit Judge.

In the District Court of the United States for the District of Montana, Yeomen Mutual Life Insurance Company, an Iowa corporation (hereafter called insurer), brought an interpleader suit against Clara Kohler, a citizen of Montana (hereafter called appellee), and Daisy S. Kohler, a citizen of Washington (hereafter called appellant), under § 24(26) of the Judicial Code, 28 U.S.C.A. § 41(26). From a decree in favor of insurer and appellee, this appeal is prosecuted.

Prior to May 1, 1932, insurer was a fraternal beneficiary association¹ called the Brotherhood of American Yeomen. Its lodges were called homesteads. One of its homesteads (No. 546) was at Helena, Montana. On July 26, 1923, insurer issued to James Victor Kohler (hereafter called decedent), a member of Homestead No. 546, a benefit certificate (No. 177,490) wherein appellant, the then wife of decedent, was designated as his beneficiary. The certificate provided that, upon receipt of satisfactory proof of decedent's death, insurer would pay his beneficiary a death benefit of $2,000. By the certificate, insurer's by-laws were declared to be a part of the contract between insurer and decedent. The bylaws provided:

"Sec. 113. Should any member in good standing desire to change his beneficiary or beneficiaries, he may do so by returning his certificate to the Local Secretary of his Homestead, together with his written request endorsed thereon for the proposed change, giving the name of the desired beneficiary or beneficiaries, together with their relation to the member. Said request shall be sent to the Secretary, and the Secretary shall endorse on said certificate said change and return said certificate to the said member.

"Sec. 114. If for any cause a beneficiary named in the certificate is barred by law from receiving the benefits provided for in said certificate or in case the member makes his spouse the beneficiary in his certificate and said member and his spouse are divorced, or legally separated by order of a court of competent jurisdiction before the death of the member, and said member makes no other disposition of the benefits, then the benefits which said barred beneficiary would have taken, had he not been barred, or which the surviving spouse would have taken but for said divorce or order of separation, shall be paid to the person or persons who would have been entitled to receive the same if the beneficiary barred or divorced or spouse separated by order of court, as the case may be, had pre-deceased the insured and the insured had named no other beneficiary. * * *

"Sec. 115. In case a benefit certificate is lost or destroyed or otherwise out of the possession or control of the member insured a new certificate may be issued upon the filing of a sworn statement and written request by the member with the Secretary who shall thereupon issue a duplicate certificate, provided the explanation contained in the sworn statement is satisfactory to the Secretary. The Secretary will furnish on request a proper form for said request and affidavit."

On February 20, 1929, decedent and appellant were divorced by decree of a State court of Montana, admittedly a court of competent jurisdiction. Theretofore, on the same date, decedent and appellant had made a contract for the settlement of their property rights. The divorce decree mentioned the contract and stated that the settlement effected thereby appeared to the court to be just and equitable. The contract provided, among other things: "That decedent agrees that he will pay the premium on a certain policy of life insurance in the sum of Two Thousand Dollars ($2,000) in which appellant is beneficiary and she shall remain the beneficiary, said policy of insurance being known as a Yeomen Beneficiary certificate." The certificate referred to was the one here involved. It was then, and remained thereafter, in appellant's possession.

Decedent was married to appellee on March 11, 1929. On September 9, 1930, he made a new contract with appellant and, in connection therewith, paid appellant $1,000 in cash and gave her his promissory note for $3,000 payable in monthly installments of $50 each, commencing October 9, 1930. The trial court found that, by this contract, appellant, in consideration of said cash payment and promissory note, agreed, among other things, that she would give up and deliver to decedent the above mentioned certificate, and would renounce any right which she then had or claimed to have therein or thereunder. Appellant, if she made any such agreement, never complied with it. The certificate remained, thereafter as theretofore, in her possession.

On August 26, 1931, decedent executed and delivered to insurer an application for change of beneficiary, wherein he notified insurer that he thereby revoked the designation of appellant as his beneficiary, appointed appellee as such beneficiary, and requested insurer to acknowledge such change. Not having the certificate in his possession, decedent could not and did not return it to insurer, as provided in § 113 of the bylaws. On March 5, 1932, decedent executed and filed with insurer a sworn statement that the certificate was out of his possession, and requested insurer to issue him a duplicate certificate, as provided in § 115. This request was complied with on March 10, 1932. The change of beneficiary from appellant to appellee was acknowledged by insurer and by it endorsed on the duplicate certificate on March 11, 1932.

On May 1, 1932, insurer, by amending its articles of incorporation and otherwise complying with statutory requirements,² transformed itself into a legal reserve level premium life insurance company,...