Ryan v. Woman's Ben. Ass'n of Maccabees

• Decision Date: 01 November 1921
• Docket Number: No. 13720.,13720.
• Citation: 209 Mo. App. 515,237 S.W. 224
• Parties: RYAN v. WOMAN'S BEN. ASS'N OF MACCABEES.
• Court: Missouri Court of Appeals

237 S.W. 224

209 Mo. App. 515

RYAN v. WOMAN'S BEN. ASS'N OF MACCABEES.

No. 13720.

Kansas City Court of Appeals. Missouri.

November 1, 1921.

Rehearing Denied January 9, 1922.

Certiorari Denied by Supreme Court February 9, 1922.

Appeal from Circuit Court, Buchanan County; L. A. Vories, Judge.

Action by Gertrude Ryan against the Woman's Benefit Association of the Maccabees. Judgment for plaintiff, and defendant appeals. Affirmed.

Randolph & Randolph, of St. Joseph, and Harding, Deatherage, Murphy & Stinson, of Kansas City, for appellant.

Mytton & Parkinson, of St. Joseph, and J. W. McKnight, of King City, for respondent.

TRIMBLE, P. J.

From and after April, 1899, Sarah A. Jones held a $2,000 fraternal insurance policy (called a benefit certificate), issued by defendant, with insured's children named therein as beneficiaries, among whom was the plaintiff, insured's eldest daughter. Becoming unable to keep up the payments on the policy, insured agreed with plaintiff that if the latter would keep them up insured would make plaintiff sole beneficiary and would not thereafter change the beneficiary. Pursuant to that agreement, Mrs. Jones, on October 2, 1903, exchanged the policy for a similar one for $2,000 in which plaintiff was named as sole beneficiary. This new policy was delivered to plaintiff by insured, and plaintiff thereafter paid the dues and rates necessary to keep the insurance in force, as hereinafter stated. On May 27, 1910, for some reason not clearly disclosed by the record, insured exchanged this policy for a similar one for a like amount, and this in turn was, on February 12, 1916, exchanged for another in the same amount. These policies, when issued, were delivered by insured to plaintiff, and in them she was named as sole beneficiary; each policy being held by her until it was exchanged for the succeeding one, and the last, the one dated February 12, 1916, being held by plaintiff until insured's death on March 8, 1918, and up to the bringing of this suit.

On September 10, 1917, when insured was more than 70 years of age, and shortly before her death, which occurred, as stated, on March 8, 1918, insured, without plaintiff's knowledge or consent, and in consideration of the sum of $1,000 paid her by defendant, executed a purported release and discharge of defendant's liability by reason of the policy, and stated in said so-called release that she thereby surrendered the benefit certificate and terminated her membership as a benefit member, but retained her social membership in the defendant association. The policy being in plaintiff's possession, it was not returned to the defendant along with the so-called release. As heretofore stated, plaintiff, from and after her agreement with insured, made all the payments within the proper time up until defendant refused to further accept payments under the policy, on the ground that it "was canceled and adjustment made" by the payment of the $1,000 to insured and the execution of the aforesaid release. Thereafter plaintiff regularly tendered all payments called for by the policy up to the date of insured's death.

The record clearly discloses that the defendant's home office was notified as early as November, 1916, that plaintiff was paying insured's rates; that during the long period plaintiff was paying the dues and rates on said policy the secretary of the local lodge was aware of the situation, and there was a sharp correspondence between this local officer and the head office relative to the proposed settlement with insured; the local officer requesting the head office, nearly a year before the settlement was made, not to make a settlement, but to investigate before doing so. So that it is clear the defendant settled with insured and paid her the $1,000 to obtain a release and discharge of the policy, with full knowledge of plaintiff's having paid the dues and rates under her agreement with insured; and this the court no found, as recited in its finding and judgment.

The question involved in this litigation, as it now stands, is whether plaintiff has any equitable rights, under the particular circumstances of this case, which entitle her to recover the dues and rates she paid on said policy pursuant to her agreement with insured. The suit began with a petition which was a straight suit on the policy to recover the full amount thereof. The answer, however, pleaded the necessary facts to show that defendant was a fraternal beneficiary association organized under the laws of Michigan and licensed to do business in Missouri; and, after admitting the issuance of the policy, the answer set up the payment of said $1,000 to insured, whereby she released defendant and terminated her membership as a benefit member. The answer further alleged that the monthly dues on the policy were not paid after the release, whereby insured was in suspension, and the policy was therefore null and void at the time of Mrs. Jones' death.

The reply set up the payment of the dues by plaintiff as hereinbefore set forth, and that all the facts were well known to defendant; that the policy was a whole life policy payable out of the defendant's benefit fund and only upon the death of the insured; that the same was a trust fund for the payment of such policies as were issued in accordance with defendant's charter, by-laws, and contract of insurance; that the policy contained no provision for its payment or settlement until the death of the insured; and that the pretended settlement by defendant with insured was ultra vices and void and beyond the powers of the company to make. The reply further set up that the pretended settlement, with knowledge of the facts, was a fraud upon the plaintiff, and that the defendant ought not, in equity and good conscience, to be heard to deny liability. The reply further pleaded that defendant accepted dues and rates paid by plaintiff after the date of the pretended settlement, and was therefore estopped to deny liability on that account.

The court in its decree found the facts as hereinabove set forth, and found that in September, 1917, defendant paid said $1,000 to insured, with full knowledge of all the facts, and in an attempted deforcement of plaintiff's rights; that the dues and rates so paid by plaintiff amounted to the sum of $930; and then rendered judgment against defendant for that amount, and defendant appealed.

As stated in appellant's brief, "there is little, if any, dispute over the facts." The question is whether or not plaintiff is equitably entitled to the dues and assessments she paid, which the parties admitted amounted to the sum of $930.

The policy contained the usual provisions to the effect that insured was bound by the laws of the order and that they should be the basis of the contract; also, that in accordance with and subject to the provisions thereof defendant would pay $2,000 out of its benefit fund to plaintiff after satisfactory proof of death and surrender of the certificate, provided said insured was "in good standing in the association at the time of her death, and provided also that this certificate shall not have been surrendered, canceled, or annulled."

Section 368 of the by-laws provided that any transfer of a benefit certificate, or any interest therein, by assignment, to secure indebtedness or otherwise, or any disposition by will, or in any other manner, except as thereinafter provided, should be void.

Section 369 provided that—

"No beneficiary shall have any vested interest in any benefit certificate before its maturity by death, but the member shall have the right, at any time, to designate other beneficiaries in accordance with these laws, and to change the mode of payment of benefits."

Section 259 provided that every member and every person deriving benefits from such member should be bound by the laws of the association, and the rights and interests of every member and those of her beneficiary should be determined by the laws, rules, and regulations in force at the time of the disability or death of such member, and all certificates issued by the association should be subject to such regulations as to amounts, terms, conditions of payment, and contingencies in which the same are payable as the laws of the association may from time to time provide.

In addition to the foregoing, section 6433, R. S. 1919, first enacted in 1897 (see Session Acts 1897, p. 135, § 9), provides that—

"No contract between a member and his beneficiary, that the beneficiary, or any person for him, shall pay such member's assessments and dues, or either of them, shall give the beneficiary a vested right in the benefit certificate, or in the benefit, or deprive the member of the right to change the beneficiary, or revoke the certificate, if any, issued by the association: Provided, that such change or revocation be done by written or printed notice to the association in the manner and form provided by its by-laws."

It is true the beneficiary in a benefit certificate has no vested interest therein before the death of the member on whose account it was issued; such beneficiary has only an expectancy, which may be defeated by the member changing the beneficiary. 14 R. 0. §§ 545, 554, pp. 1378, 1388. And, in this state at least, this Is not affected by the fact that the beneficiary has paid the...