Mosaic Templars of America v. Hearon

• Decision Date: 22 May 1922
• Docket Number: 1
• Citation: 241 S.W. 35,153 Ark. 568
• Parties: MOSAIC TEMPLARS OF AMERICA v. HEARON
• Court: Arkansas Supreme Court

241 S.W. 35

MOSAIC TEMPLARS OF AMERICA v. HEARON

153 Ark. 568

No. 1

Supreme Court of Arkansas

May 22, 1922

Appeal from Nevada Circuit Court; J. H. McCollum, special judge reversed.

Judgment reversed.

Scipio A. Jones, for appellant, Mosaic Templars.

The constitution and by-laws of a fraternal beneficiary association are part of the contract between the member and the association. 109 Ark. 400; 113 Ark. 400; 174 S.W. 1197 105 Ark. 140; 135 Ark. 65. The policy in suit was not "willed or assigned" according to the by-laws, and there is no liability on appellant.

H E. Rouse, for appellant, Rowton.

The association knew the relationship existing between the insured and this appellant; knew that he had willed the insurance to Rowton, and demanded the payment of premiums from Rowton, and it cannot now be permitted to take advantage of its own wrong to claim that there is no beneficiary named. 99 Ark. 204; 67 Ark. 506; 71 Ark. 242; 52 Ark. 11; 111 Ark. 435; 142 Ark. 132; 132 Iowa 513. The association having knowledge of facts which would avoid the policy, in justice to the assured and the honest conduct of its business, should have notified the assured of the facts. 127 Ark. 133. By its failure to notify the insured, and the acceptance of the premiums, under the conditions, the association is estopped to claim a forfeiture. 85 Mo. 302; 66 N.Y. 23; 82 N.E. 692; 147 N.C. 339; 74 N.H. 334; 57 Ga. 469; 116 Mass. 321. Forfeitures are not favored. 2 May on Ins., sec. 361; 96 U.S. 577; 53 Ark. 499; 206 S.W. 970; 103 Ark. 171; 107 Ark. 102; 130 Ark. 12.

MCCULLOCH C. J. HART, J. dissenting.

OPINION

MCCULLOCH, C. J.

Appellant Mosaic Templars of America is an incorporated fraternal society, which issues benefit certificates, or policies of insurance, to its members in accordance with the terms of its constitution and by-laws.

The certificate, or policy, issued to members of the society does not designate the beneficiary, but merely states that the amount stipulated in the policy will be paid at the death of the member named, if in good standing financially at that time, to the "widow, widower, mother, father, sister, brother or relative by blood to fourth degree ascending or descending, to whom this policy may be willed or assigned."

The by-laws, which are made a part of the contract, contain the following provisions:

"Section 2. Members holding certificates in this order and dying without designating in their own writing or mark thereof, attested by the worthy scribe of their temple, or chamber, to whom the benefits shall be payable, then in such event the benefits provided in their certificates or polices will not be paid, under any condition or circumstances."

"Section 7. Members holding policies in this order and dying without making some disposition of the same by will or assignment, will not, under any consideration, be paid; and said will or assignment must be made in their own writing, or mark thereof, attested by the scribe of their temple, chamber or palace, and must be sent to the National Grand Scribe on final proof of death."

B. G. Bryant became a member of said society, through its local organization at McNeil, Arkansas, and a certificate or policy was issued to him on February 6, 1913, and he died while in good standing financially on September 13, 1919.

Bryant executed his last will and testament on July 21, 1916, whereby he bequeathed his policy in appellant society to his daughter, Minnie L. Hearon, the appellee, who was the plaintiff below. Bryant's will was duly attested by two witnesses in accordance with the laws of this State and was duly probated, but the instrument was not attested by the local scribe of appellant society as provided in the by-laws.

Subsequent to the execution of his said will, Bryant executed an assignment of the policy to his illegitimate daughter, Frances Rowton, who is one of the appellants here. The instrument was signed by Bryant and witnessed by two persons, but not by the local scribe as provided in the by-laws.

This action was instituted on the policy by appellee, claiming to be the designated beneficiary under the last will and testament of Bryant.

Appellant Frances Rowton was made a party defendant in the action on the allegation that she was claiming some interest in the policy as beneficiary, and she filed her answer and cross- complaint against the Mosaic Templars of America, asking for recovery of the amount of the policy under the assignment to her by Bryant.

Appellant Mosaic Templars of America answered, denying liability to either of the parties.

The cause was tried before a jury, but the court gave a peremptory instruction in favor of appellee.

Each of the appellants filed a separate motion for a new trial, which was overruled, and each has duly prosecuted an appeal to this court.

The by-laws of the society constitute a part of the contract, and there was no liability for the payment of benefits unless there was a designation in the manner prescribed. Baker v. Mosaic Templars of America, 135 Ark. 65, 204 S.W. 612. In the case just cited, we said:

"It is insisted by appellant that the failure to designate a beneficiary by will or assignment in the manner provided in the policy cannot prevent a recovery. The policy specifically provides that the laws of the order shall become a part of the contract. The clause in question is law No. 7 of the organization. It was therefore necessary for the insured to comply with it before any liability would accrue on the contract."

The words "will or assign" in by law No. 7 were manifestly used synonymously as meaning the designation of the beneficiary under the policy, and the requirement was for the purpose of certainty and to prevent conflicts, and required that such designation should be in writing, signed by the assured, either in his own handwriting or by mark and attested by the scribe of the local society. No particular form was prescribed for the designation, except, as before stated, that it must be in writing and attested by the scribe. The designation could be by a last will and testament, executed in accordance with the laws of the State, or by a written instrument of assignment, but in either event the instrument must be attested by the local scribe.

In the present instance there was no attestation by the local scribe, either to the last will of Bryant, under which appellee claims, or to the written instrument under which appellant Frances Rowton claims.

The assignment to Frances...