Modern Woodmen of America v. Lottie Headle

• Decision Date: 09 May 1914
• Citation: 90 A. 893,88 Vt. 37
• Parties: MODERN WOODMEN OF AMERICA v. LOTTIE HEADLE ET AL
• Court: Vermont Supreme Court

90 A. 893

88 Vt. 37

MODERN WOODMEN OF AMERICA v. LOTTIE HEADLE ET AL

Supreme Court of Vermont

May 9, 1914

Special Term at Rutland, November, 1913.

APPEAL IN CHANCERY. This is a bill of interpleader. Answers were filed and the defendants ordered to interplead, which they did. Heard on the pleadings and the facts found by the chancellor at the March Term, 1913. Rutland County, Butler Chancellor. Decree that the claimant, Lottie Headle, the beneficiary named in the original certificate, is entitled to the disputed fund. The other claimants appealed. The opinion states the case.

Decree affirmed and cause remanded.

T. W Moloney and G. W. Platt for the appellee.

Present POWERS, C. J., MUNSON, WATSON, HASELTON, and TAYLOR, JJ.

OPINION

TAYLOR

This is a bill of interpleader. The orator is a fraternal beneficiary society organized under the laws of Illinois with the principal office at Rock Island, Illinois, and doing business throughout the United States. The defendants are Lottie Headle, widow of William D. Headle, a deceased member of the society, and Guy Milo Headle and Carrie Elsie Headle, minor children of the said William D. by a former marriage and their guardian George H. Granger. The defendants answered, the fund in controversy was paid into court, the orator was discharged and the defendants ordered to interplead. The case was heard by the chancellor who decreed the fund to Lottie Headle, from which decree the other defendants appeal.

The chancellor finds that in May, 1901, William D. Headle, then a resident of Rutland in this State, applied for membership in the society through the local camp at Rutland and on July 4, 1901, the orator issued to him a benefit certificate in the sum of $ 2,000.00 payable in case of death while a beneficial member of the society in good standing, subject to all the terms and conditions thereof, to his wife, the said Lottie Headle, as beneficiary. Said benefit certificate contained, among others not necessary to be noted, the provision that "all the conditions contained in this certificate, and the by-laws of this society, as the same now exists, or may hereafter be modified or enacted, shall be fully complied with." The said William D. Headle died at Rutland on the 6th day of March, 1911, and was a member of said society in good standing at the time of his death.

Section 47 of the by-laws of said society then in force--and so far as appears, in force during all the time he was a member thereof--provided: "If a member in good standing at any time desires a change in his beneficiary or beneficiaries and to obtain a new certificate, he shall pay to the camp clerk a fee of 50 cents and deliver to him his benefit certificate, with the surrender clause on the back thereof duly filled out and executed by him, designating therein the change desired in the beneficiary or beneficiaries. The execution of such surrender clause by the neighbor shall be in the presence of, and attested by his camp clerk. If, however, the member be so situated that he cannot execute the said surrender clause in the presence of the clerk of his camp, the signature of the member thereto may be attested by the jurat or acknowledgement of any person authorized by law to administer oaths and take acknowledgements, and the same shall be forwarded to the clerk of his local camp. The local clerk shall deposit one-half of said fee of 50 cents in the general fund of the camp, and forward said certificate, with said surrender clause indorsed thereon, and the remaining half of said fee to the head clerk, who shall thereupon issue a new benefit certificate payable to the beneficiary or beneficiaries named in said surrender clause, depositing the fee of 25 cents in the general fund of the society. No change in the designation of beneficiary or beneficiaries shall be effective until the old certificate shall have been delivered to the head clerk and a new certificate issued during the lifetime of the member, and until such time the old certificate shall remain in force. The new beneficiary or beneficiaries so named shall be within the description of beneficiaries contained in Section 45 hereof. Any attempt by a member to change the payee of the benefits of his benefit certificate by will or other testamentary document, contract, agreement, assignment or otherwise than by strict compliance with the provisions of this section relating to change of beneficiary, shall be absolutely null and void. Any agreement entered into by the member, by the terms of which he attempts to assign the benefits agreed to be paid under the certificate, or any part thereof, to any other person or persons than the beneficiary or beneficiaries designated in the certificate, shall be absolutely void; as shall any agreement entered into by which the member agrees not to change his beneficiary if he afterwards violates such agreement and exercises his right to at any time before death change his beneficiary."

A few days previous to his death William D. Headle had an interview with one Owens, consul of the local camp, in which he expressed a desire to change the beneficiary named in his certificate, making it payable in case of his death one-half to his wife and one-half to his children. Not wishing to acquaint his wife with this change, it was arranged that the son Guy should get the certificate in the absence of the wife and send it to said Owens. Subsequently and some time previous to signing the order for change of beneficiary, Clarence L. Dye, clerk of the local camp, had an interview with said Headle in which he expressed a like purpose and indicated the change he wished to make in the certificate; whereupon Dye wrote on the back of the certificate in a blank provided for that purpose the order for the change which Headle desired. Said order reads as follows:

CHANGE OF AMOUNT OR BENEFICIARY.

I. W. D. Headle, the Neighbor to whom this Benefit Certificate was issued, do hereby surrender and request the cancellation of this Benefit Certificate, and order that a new one shall be issued upon the conditions and subject to all of the provisions contained in my original application for membership, in the amount of Two Thousand Dollars, and the same be made payable One Thousand to Lottie Headle, my wife; and One Thousand to Guy Milo Headle and Carrie Elsie Headle, who is related to me as son and daughter. W. D. HEADLE.

Signed in my presence, at Rutland, State of Vermont, this 4th day of March, 1911. CLARENCE L. DYE, Clerk of Camp No. 8581, M. W. A.

Dye was not present when this order for change of beneficiary was signed by Headle.

On March 4, 1911, the certificate bearing the order signed by Headle was delivered to Dye with the required fee of 50 cents. Thereupon Dye indorsed the order as appears above and immediately forwarded the certificate with the required fee by mail to C. W. Hawes, the head clerk of the society, accompanied by a request from him as clerk of the Rutland Camp that the beneficiary be changed according to the indorsement on back of the certificate. The certificate was received by said Hawes at Rock Island, Illinois, March 6, 1911, at 8:30 o'clock a. m., central standard time. After looking up the records in his office to ascertain if Headle was a member of the society in good standing, Hawes immediately (12 minutes later) issued a new certificate to said Headle in all respects like the original one except that in case of death one thousand dollars was to be paid to Lottie Headle, his wife, and one thousand dollars to Guy Milo Headle and Carrie Elsie Headle, his son and daughter. The new certificate was forwarded by mail to the clerk of the camp at Rutland, who received it in due course of mail.

William D. Headle died at Rutland, Vermont, at four o'clock a. m. eastern standard time, equivalent to three o'clock a. m. central time, or five and a half hours before the original certificate reached the office of the head clerk at Rock Island.

The only question presented is whether, on the foregoing facts, the new certificate became effective. The defendant Lottie Headle claims that the new certificate is null and void because not issued in accordance with the by-laws of the society in the lifetime of Headle and that she is entitled to the full amount. The other defendants claim that Headle having performed every duty incumbent upon him under the by-laws, in equity the change of beneficiaries was complete upon the delivery of the original certificate to the local camp clerk; that the by-law in question was not made for the benefit of the beneficiary, and so cannot be taken advantage of by one seeking to defeat the express intention of the member to effect a change of beneficiaries; that the by-law being for the protection of the society it could and did waive its requirements; and that the issuing of the new certificate was only a formal ministerial act which, to give effect to the intention of the member should in equity be treated as having been done as of the time when the certificate was delivered to the camp clerk at Rutland. They ask one thousand dollars of the fund be decreed to them.

By the express terms of the certificate the by-laws of the society are made a part of the contract. The certificate provides that the member while in good standing is entitled to the privileges of the society and that his beneficiary therein named, in case of his death while a beneficial member in good standing, shall be entitled to participate in the benefit fund of the society to the amount of two thousand dollars subject to all the conditions contained in the certificate and by-laws of the society. Sec. 49 of the by-laws provides: "The contract for beneficial membership between the society and the beneficial member shall include...