Price v. Supreme Lodge Knights of Honor

• Citation: 4 S.W. 633
• Court: Texas Supreme Court
• Decision Date: 31 May 1887
• Parties: PRICE v. SUPREME LODGE KNIGHTS OF HONOR and others.

4 S.W. 633

PRICE v. SUPREME LODGE KNIGHTS OF HONOR and others.

Supreme Court of Texas.

May 31, 1887.

Appeal from Limestone county.

T. J. Gibson and Burrow & Kincaid, for appellant. Cobb & Farrar and Herring & Kelley, for appellees.

WILLIE, C. J.

This suit was brought by H. K. Price to recover the amount alleged to be due him on a benefit certificate issued by the supreme lodge of the Knights of Honor to Thomas C. Harper, who had died a member of the order. The other defendants were sued with the lodge because they were the beneficiaries named in the certificate, and set up a claim to the amount due upon it, in opposition to the plaintiff. The lodge made no defense to the action other than to ask the court to determine to whom the benefit money should be paid, and offering to pay it to the parties found by the court to be entitled to receive the money.

The original petition alleged that the lodge was engaged in a mutual aid and life insurance business, and that Harper, by becoming a member, had his life insured to the amount of $2,000, payable to the beneficiaries named by him. The beneficiaries named in the certificate were the defendants, who were the wife and children of Harper. The petition further alleged that it was necessary for Harper to pay certain dues to the lodge, from time to time, to entitle him to a good standing in the order, and his beneficiaries to the insurance money, in case of his death; that Harper paid these charges for a while, but afterwards became so far in arrears that his membership was subject to suspension, and was about to be suspended, and his benefit certificate forfeited; that Harper applied to plaintiff, and offered that if the plaintiff would pay his arrearages, and continue to pay his lodge dues and assessments, he, Harper, would transfer to him his benefit certificate. To this the plaintiff assented, and, with the consent of the lodge, paid up all Harper's arrearages, and kept the certificate alive up to the date of Harper's death, by the payment of all dues and assessments for which he was liable as a member of the order. The appellant complied with his contract by making the payments as agreed, and kept the certificate alive down to the death of Harper. The latter was ready to make the transfer, and the lodge was ready to change the certificate, so as to make it inure to the benefit of the plaintiff; but the certificate could not be found, and was not found till after Harper's death. The dues were received by the lodge from Price, and he was recognized by it as the owner of the certificate. It was further alleged that the constitution and laws of the order allowed a member to make any person he might choose the beneficiary of his certificate, whether he held an insurable interest in the life of the member or not; and that it so contracted in the present instance. The plaintiff alleged that he held an insurable interest in the life of Harper as they were cousins, and plaintiff was a member of Harper's family, and in his employment, and dependent on him for employment and support.

General and special demurrers were filed to the plaintiff's pleading by the defendants other than the lodge, and these were sustained by the court below, and the plaintiff refused to amend. The cause was not dismissed; but, it having been agreed that the plaintiff had paid to the lodge $17.75 in dues, arrearages, and mortuary assessments in behalf of Harper, judgment was rendered for the plaintiff for that amount, and for the defendants for the balance of the $2,000, less the costs, etc. From that judgment this appeal is taken.

The judge below placed in writing his conclusions of law upon the demurrer, and these show that he held, among other things, that the agreement between Price and Harper was a wagering contract, and that it could not be enforced as against the lodge or the other defendants. In our view of this case, this ruling is all that need be considered in determining the appeal. It is too clear for argument that Price had no such interest in the life of Harper as entitled him to insure it for his own benefit. Indeed, it is not claimed here that the fact that they were cousins, and Price an adult male member of Harper's family, and dependent on him for employment and support, gave him such interest as would support a life policy for his own benefit. But the appellant did not procure a policy on the life of Harper, but was the assignee of one which had been previously issued to Harper himself by the Knights of Honor. The consideration which he gave for the assignment was the payment of the money which was owing or might become due from Harper to the lodge in order to keep alive the certificate it had issued to him. The question, then, is, can a party, having no insurable interest in the life of another, receive an assignment of a policy of insurance issued upon the life of the latter, upon an agreement merely to pay the premiums or assessments necessary to keep the policy in force? This question has met with different answers from different courts of the United States. In our own state, no occasion for its determination has heretofore arisen.

It is almost universally conceded that policies procured by persons having no interest in the life of the insured are void at common law, as against public policy. The policy holder has nothing to lose for which he can claim indemnity; on the contrary, his interest is in the early death of the insured. When that occurs he ceases to pay premiums, and receives the amount of the policy. This creates a temptation to destroy human life, and the common law forbids the contract. These are the grounds upon...