Mitchell v. Langley

• Citation: 143 Ga. 827,85 S.E. 1050
• Decision Date: 14 August 1915
• Docket Number: (No. 535.)
• Parties: MITCHELL. v. LANGLEY.
• Court: Supreme Court of Georgia

85 S.E. 1050

143 Ga. 827

MITCHELL.

v.LANGLEY.

(No. 535.)

Supreme Court of Georgia.

Aug. 14, 1915.

(Syllabus by the Court.)

3. Motion for New Trial—Error—Reversible Error.

While some of the grounds of the motion for a new trial may have presented inaccuracies in the charge or rulings, none of them show error requiring a reversal.

Error from Superior Court, Rockdale County; C. S. Reid, Judge.

Action by Georgia Langley against C. G. Mitchell. Judgment for plaintiff, and defendant brings error. Affirmed.

Georgia Langley brought suit against Cora G. Mitchell, alleging in substance as follows: The plaintiff and the defendant were sisters, and they had another sister. They had a half-brother who had resided for some time in the state of Colorado, and who had been in feeble health, weak in body and mind, and liable to be influenced. In 1904, he took out a benefit certificate in the Royal Arcanum for $3,000, payable at his death to his three half-sisters, one-third each. In 1911, in order to induce the member to surrender the certificate and obtain a new one excluding the plaintiff as a beneficiary and in which the defendant would be the sole beneficiary, the defendant falsely and fraudulently, and with intent to deceive him, wrote to the member a letter in which she represented that all her two-half sisters cared for was to get all they could from the member; and in another letter defendant made certain representations tending to show that her two half-sisters did not agree to pay their part of what was necessary to keep the certificate in force, and that "it seems like they didn't care or want to help brother." These representations were knowingly false and fraudulent, and the defendant maliciously intended to injure the plaintiff in the good opinion and affection of her half-brother, and to bring about an estrangement between them and cause it to be believed by him that the plaintiff had been guilty of misconduct and of entertaining feelings imputed to her, and thus to cause him to surrender and cancel the benefit certificate in which she was a beneficiary. By these means the defendant induced her half-brother to surrender and cancel the benefit certificate, which would have remained in force at his death, and from which the plaintiff would have received $1,000 principal, and to cause a new certificate to be issued, making the defendant the sole beneficiary. In doing this he believed the false representations and statements of the defendant, and was influenced by them. The member died after the change had been made, and the defendant collected the amount due under the second certificate. The plaintiff laid her damages at $1,000. She also alleged that the written statement constituted a libel. By amendment it was alleged that the change in the beneficiary was procured by fraud and was void, and that the defendant was liable to the plaintiff for money had and received. No objection appears to have been made to adding these allegations to an action based on tort.

The plaintiff recovered; the jury making, in the verdict, a deduction on account of certain expenses which had been incurred by the defendant. A motion for a new trial was denied, and the defendant excepted.

A. C. & J. H. McCalla, of Conyers, and Little, Powell, Smith & Goldstein, of Atlanta, for plaintiff in error.

J. R. Irwin, of Conyers, and Rogers & Knox, of Covington, for defendant in error.

LUMPKIN, J. (after stating the facts as above). [1] 1. It is well settled that, in the absence of a clause of defeasance, or one providing for a change of beneficiaries, the beneficiary in an ordinary policy of life insurance has a vested interest which the insured cannot divest at his mere volition. In benefit societies, it is generally held, the beneficiary named in the certificate does notstand in the same position as the beneficiary named in an ordinary life insurance policy. It has frequently been said that a beneficiary in such a certificate has only an expectancy, and not a vested interest, so as to prevent the member from making a change and substituting another beneficiary. Some of the courts announce this as if it were the result of something inherent in the nature of benefit societies. Others treat it as the result of some provision in the statute under which the society operates, or in its charter or by-laws, or in the certificate itself. In other words, the latter class of courts hold that the beneficiary takes what the contract (including in that term the statute law, the charter and by-laws, and the certificate) gives him; and that, by virtue of the authority derived from such sources to make a change, the member has that right. Sometimes the member has been referred to as having a power of appointment, with a power of revocation or substitution, and the beneficiary has been referred to as the appointee. Nib. Acc. Ins. & Ben. Soc. (2d Ed.) § 212; 1 Bac. Ben. Soc. (3d Ed.) § 289 et seq.; note to Union Central Life Ins. Co. v. Buxer, 19 L. R. A. 737, 749, et seq. (62 Ohio St. 385, 57 N. E. 66); Smith v. Locomotive Engineers', etc., Ass'n, 138 Ga. 717, 76 S. E. 44; 29 Cyc. 125 (c), and citations; Locomotive Engineers', etc., Ass'n, v. Winterstein, 58 N. J. Eq. 189, 44 Atl. 199.

In Hoeft v. Supreme Lodge Knights of Honor, 113 Cal. 91, 45 Pac. 185, 33 L. R. A. 174, it was held that fraud inducing the insured to change the beneficiaries in his certificate of life insurance in a benefit society, when he has a right to make the change, does not give the former beneficiaries any right to claim the proceeds as against the new beneficiary, where the insurer does not contest the validity of the insurance. This was based on the argument that the beneficiary in such a certificate has no vested right, but only a mere expectancy, or an incomplete gift, which is revocable at the will of the insured, and which does not become vested until the death of the latter; that a right of action for fraud is personal and not transferable; that one cannot be defrauded of that in which he has no vested right; and that such a beneficiary has no right of property to be protected. In that case the benefit society paid the money into court, and the controversy was between the widow of the member and his children; the latter claiming that the widow, their stepmother, had fraudulently procured the member to surrender the certificate, in which they were named as beneficiaries, and to have issued another, in which she was named as the beneficiary. The statement that the views expressed are sustained by a multitude of authorities may be true to the extent that a beneficiary has no such vested interest as to prevent the member from substituting another beneficiary. But the cases cited in support of the proposition do not establish the contention that a beneficiary named in a certificate has no such interest as to authorize him to attack a fraudulent procurement of a change by a third party who receives the amount specified, upon the death of the member. In Alfsen v. Crouch, 115 Tenn. 352, 89 S. W. 329, a similar ruling was made.

Hahn v. Supreme Lodge of the Pathfinder, 136 Ky. 823, 125 S. W. 259, was cited by counsel for the plaintiff in error, as making a like ruling. But, when carefully examined, that decision will be found not to sustain the two decisions above cited, but to contain a strong intimation to the contrary. It was held that a beneficiary in a certificate of insurance in a fraternal order had not a vested interest in the sense that a change in the beneficiary by the husband (who was a member) from the wife to some one else will of itself constitute a fraud on her marital rights. The opinion contains this statement (page 829 of 136 Ky., and page 261 of 125 S. W.):

"Furthermore, the evidence, if any, which was heard in the court below, is not now before us. There is therefore no proof of actual fraud; and, for aught we know, the conduct of the wife may have been sufficient to justify the husband in making the change. In the absence of a bill of exceptions, the presumption is that the proof heard supports the finding of the chancellor."

The inference is that if there had been proof of actual fraud, and a finding by the chancellor of its existence, the decision might have been otherwise. While the beneficiary named in a certificate of this character has not such a vested interest as will prevent the member from substituting another beneficiary in his stead if the statute, the charter, by-laws, or certificate so authorizes, it would seem to be the sounder rule that this would not prevent the original beneficiary from proceeding by equitable petition to have a trust declared in his favor, if the benefit which would have accrued to him was diverted from him and the fund went into the possession of another by means of fraud. It is not necessary in all cases that there should be a vested right in property or a fund in order to have one who fraudulently diverts it from another, who would have received it, declared to be a trustee ex maleficio.

In Cassels v. Finn, 122 Ga. 33, 49 S. E. 749, 68 L. R. A. 80, 106 Am. St. Rep. 91, 2 Ann. Cas. 554, note, it was held that the mere failure to perform an oral promise made by the sole heir at law of one desiring to dispose of her estate by will to a third person, that he would dispose of her estate as she desired, did not make the heir at law, in case of an intestacy, a trustee ex maleficio as to the property inherited by him, in the absence of actual fraud. It was recognized that, if there had been actual fraud and interference, the heir would be declared a trustee ex maleficio.

In Cason v. Owens, 100 Ga. 142, 28 S. E. 75, certain children brought suit against their mother, alleging that their father was holding policies in his lifetime in certain insurance, or benefit, or assessment, companies, to the amount of $7,500, payable to his three children as beneficiaries, one of them, for $3,000, being in a company called the Golden Chain; that shortly...