Sage v. Finney

• Decision Date: 21 March 1911
• Citation: 156 Mo. App. 30,135 S.W. 996
• Parties: SAGE v. FINNEY et al.
• Court: Missouri Court of Appeals

135 S.W. 996

156 Mo. A. 30

SAGE v. FINNEY et al.

St. Louis Court of Appeals. Missouri.

March 21, 1911.

Rehearing Denied April 4, 1911.

1. INSURANCE (§ 767)—INSURABLE INTEREST —INTEREST OF BENEFICIARY.

A person may insure his own life, paying premiums thereon himself in favor of another, who has no insurable interest therein.

2. INSURANCE (§ 767)—INSURABLE INTEREST —WAGERING POLICIES.

Where insurance is procured with the consent of the insured in favor of one who has no insurable interest, but who undertakes to pay the premiums therefor, it is a wagering contract, obnoxious to public policy, though not unlawful in the sense that it is immoral.

3. INSURANCE (§ 767)—INSURANCE WITHOUT INTEREST—EFFECT.

Where insurance is procured with the consent of the insured, but in favor of one without insurable interest, such agreements, though obnoxious to public policy, in so far as they purport to give the beneficiaries any precise or definite amount of the insurance without regard to the amount of the indebtedness which the insured may owe to the beneficiaries, or to the premiums and interest thereon which the beneficiaries may have invested under the agreements, afford the beneficiaries equitable rights to the proceeds of the insurance to the extent of compensating the indebtedness, if any, existing in favor of the beneficiaries against the insured, together with such premiums and interest as the beneficiaries have expended in keeping the insurance in force.

4. INSURANCE (§ 719)—MUTUAL BENEFIT INSURANCE —BENEFICIARIES—STATUTORY PROVISIONS.

Rev. St. 1909, § 7119 (Laws 1897, p. 132), pertaining to benefit societies, and providing that no contract under which a beneficiary may pay a member's assessments shall give the beneficiary a vested right in the benefit certificate, is without effect upon the accrued rights of an insured and his beneficiary without interest under a contract made in 1894.

5. INSURANCE (§ 767)—MUTUAL BENEFIT INSURANCE — INTEREST — BENEFICIARIES— DESIGNATION OF BENEFICIARY BY CONTRACT.

Where a party without insurable interest in a certificate of insurance makes a contract with the insured and with the insurer to pay the assessments and dues thereon for an agreed part of the proceeds, his rights are only those given by the contract.

6. ESTOPPEL (§ 78)—GROUNDS—INCONSISTENCY OF CONDUCT AND CLAIMS.

A member of a mutual benefit society, being unable to pay his dues, surrendered his certificate for $2,000, with the consent of the society, and a new certificate was issued payable to defendant, who had no insurable interest in the life of the insured, in consideration of and under a written agreement that defendant should pay the dues and assessments of the insured until his death, and should then receive $1,000 out of the proceeds, and should act as agent of the insured's grandson in collecting and paying over to him the remaining $1,000 of the insurance. The defendant under this agreement paid dues and assessments to the death of the insured amounting to $1,400, which, with interest to trial, amounted to $1,800, and in a proceeding to distribute the proceeds which had been paid into court defendant stipulated with the insured's grandson for an award of $1,000 and asserted claims to the remaining $1,000. Held that, while the defendant's contract was invalid, his only equities accrued under it, and that he could not claim rights under it without accepting it cum

onere, and was estopped from inconsistently repudiating the limitation as to the amount to which he was entitled.

7. ESTOPPEL (§ 78)—GROUNDS OF ESTOPPEL— CONTRACTS—INVALID CONTRACT.

An invalid contract affords no ground of estoppel unless it has been fully executed.

8. ESTOPPEL (§ 92) — GROUNDS — ACQUIESCENCE — ACCEPTANCE OF BENEFITS — CONTRACTS.

One who has accepted the benefits of an invalid contract is estopped from asserting its invalidity.

9. ESTOPPEL (§ 92)—GROUNDS—ACCEPTANCE OF BENEFITS.

Where a person accepts benefits under invalid judicial proceedings, he is estopped from asserting their invalidity, since that would be inconsistent with his acceptance of benefits.

Appeal from St. Louis Circuit Court; Eugene McQuillin, Judge.

Bill in equity by Patrick D. Sage against the Supreme Council Catholic Knights of America and Alexander Finney, in which the Supreme Council interpleaded and was discharged. Judgment for plaintiff, and defendant Finney appeals. Affirmed.

Frank R. Ryan, for appellant. Frederick W. Imsiepen and Chester H. Kern, for respondent.

NORTONI, J.

This is a suit in equity upon and for the reformation of a benefit certificate and as to defendant Finney to the end as well of restraining him from collecting the entire fund vouchsafed in the certificate. Defendant Supreme Council answered by way of a bill of interpleader, asserted it was a mere stakeholder of the fund of $2,000, and that both plaintiff and its codefendant, Finney, claimed portions thereof. It therefore prayed permission to pay the fund into court, and that the court require the parties to litigate the matter between themselves. After the Supreme Council was discharged in accordance with its prayer, the court found the issue for plaintiff, and defendant Finney alone prosecutes the appeal.

It is unnecessary to determine whether the case is properly one of interpleader, as the two claimants, plaintiff and defendant Finney, agreed it was, and stipulated that the court should discharge defendant Supreme Council upon its paying the fund into court, and permitting them to litigate their claims thereto. The controversy in the cause therefore relates alone to the claim of plaintiff pertaining to $1,000 of the insurance money and the claim of defendant Finney to nearly or about all of the same amount, for by the same stipulation above mentioned it was agreed that Finney should have $1,000 of the fund on which plaintiff made no claim whatever. So it is, though $2,000 was paid by the Supreme Council in extinguishment of the insurance certificate, but $1,000 thereof is involved here; the other half having been paid to defendant Finney under the agreement of the parties.

The facts out of which the controversy arises are as follows: The Supreme Council of Catholic Knights of America was in 1881, and has at all times since been, a mutual benefit society doing business in this state, and plaintiff's grandfather, Patrick D. Sage, was a member of that order. In 1881 Patrick D. Sage became a member of the order referred to, and it issued to him its certificate of insurance payable at his death to his wife, Catherine Sage, in an amount of $2,000, but stipulated that the beneficiary therein might be changed at any time in accordance with the directions of the insured. Sage paid all of the assessments and dues thereon for a period of some 13 years until 1894, when, because of advancing years and decrepitude, he found himself unable to conveniently further continue such payments. Defendant Alexander Finney was a member of the same order, and it appears that he and Sage belonged to the same local council, No. 99, in the city of St. Louis. Upon Sage finding it inconvenient to further continue payment of his assessments and dues, he entered into an arrangement with defendant Finney to the effect that Finney should assume and discharge that duty until his death and receive $1,000 of the proceeds of the insurance thereafter. In accordance with this arrangement, Sage surrendered his benefit certificate to the local council, No. 99, of the order of which the two parties were members, and directed that a new one for the full amount of $2,000 be issued payable to defendant Alexander Finney. But as part of this transaction and in consideration thereof Finney agreed that he would act as agent for Catherine Sage, the wife of the insured, and, in event of her prior death, then as agent for this plaintiff in collecting $1,000 of such insurance and in paying it over immediately to the wife of the insured if living, and, if not, to the plaintiff grandson. It may be said here that, though defendant Finney was in no way related to the insured and was otherwise wholly without an insurable interest in his life at the time, the constitution and laws of the Supreme Council of Catholic Knights in no respect required the beneficiary to have an insurable interest in the life of the member. In other words, so far as the order is concerned, defendant Finney was a competent beneficiary, and the parties acted upon this theory. It appears that the entire arrangement as to substituting Finney as the beneficiary in the certificate in consideration of his paying all future assessments and dues thereon and as agent collecting and paying over $1,000 of the insurance to the insured's wife, if living, if not, then to plaintiff, was had with the knowledge and consent of the order, for the local lodge, Council No. 99, voted upon and approved it. Furthermore, it appears the new certificate for $2,000, payable to Finney, together with the written agreement executed between him and Sage, the...