Savage v. The Modern Woodmen of America

• Decision Date: 11 February 1911
• Docket Number: 16,847
• Citation: 84 Kan. 63,113 P. 802
• Parties: NORA L. SAVAGE, Appellee, v. THE MODERN WOODMEN OF AMERICA, Appellee, and RUSSELL SAVAGE et al., Appellants
• Court: Kansas Supreme Court

113 P. 802

84 Kan. 63

NORA L. SAVAGE, Appellee, v. THE MODERN WOODMEN OF AMERICA, Appellee, and RUSSELL SAVAGE et al., Appellants

No. 16,847

Supreme Court of Kansas

February 11, 1911

Decided January, 1911.

Appeal from Wyandotte district court.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. PLEADINGS--Departure--Immaterial Error. A judgment will not be reversed because new matter in a reply constitutes a departure from the petition, although timely objection has been made thereto in the trial court, where notwithstanding the fault in the pleading the contention of each party has been made clear, and each has had full opportunity to develop the facts.

2. INSURANCE -- Beneficiary Designated under Agreement -- Vested Right--Change of Beneficiary. Where the designation of the beneficiary in a certificate issued by a mutual benefit association is made in pursuance of an agreement founded upon a sufficient consideration, the person so designated acquires a vested interest, and, unless by reason of countervailing equities, can not be displaced although the rules of the order permit the member to change the beneficiary at will.

3. INSURANCE--Acceptance by Wife of Husband's Offer to Name Her as Beneficiary--Consideration--Change of Beneficiary. Where a husband agrees that if his wife will help to pay the assessments upon a certificate in a mutual benefit association in her favor he will not change the beneficiary, and in consequence of such agreement she makes a part of the payments thereon, using for the purpose what are in fact the proceeds of her own labor outside of her ordinary household duties, she can not be displaced as such beneficiary without her consent, notwithstanding she commingles her earnings with those of her husband as soon as received, keeping no separate account thereof, and then takes the money for the assessments from the common fund.

4. EVIDENCE--Transactions with Persons Since Deceased--Beneficiary of Insurance Certificate. The statutory rule that no party shall testify in his own behalf in respect to any transaction had personally with a person since deceased, where the adverse party is the heir at law, next of kin or assignee of such deceased person, does not apply where the adverse party claims as the beneficiary of a certificate issued by a mutual benefit association to such decedent, because the beneficiary named in the certificate is not the assignee of the member to whom it was issued, and the circumstance that he is in fact his heir or next of kin is not material where his claim is not founded on that relationship.

Nathan Cree, E. Y. Blum, and C. O. Littick, for the appellants.

W. L. Wood, and J. O. Fife, for Nora L. Savage.

OPINION

MASON, J.:

In 1898 George T. Savage obtained a benefit certificate in the Modern Woodmen of America in favor of his wife, Nora L. Savage. The rules of the association authorized him to change the beneficiary at his pleasure. On July 13, 1908, he elected to constitute his son, Russell Savage, and his daughter, Mabel Sebree, the beneficiaries. Upon complying with the prescribed forms he obtained, on July 16, a new certificate designating them as such. Three days later he died. His widow brought action for the amount of the certificate, making the son and daughter parties. The association admitted indebtedness under one certificate or the other, and asked that the rights of the rival claimants be determined. A trial resulted in a judgment in favor of the widow, and the son and daughter, who will be referred to as the defendants, appeal.

The plaintiff's petition declared upon the original certificate. The defendants each filed an answer and cross-petition setting out the change of beneficiary and the issuance of the new certificate. The plaintiff filed replies alleging in effect that George T. Savage had agreed with her that if she would help pay the premiums he would never change the beneficiary; that she had done so for a term of years, thereby acquiring a vested right in the certificate; and that the attempted change was therefore ineffectual. The defendants demurred, and now urge that a reversal should be ordered upon the ground that the new matter in the replies constituted a departure from the petition; that to have been available to the plaintiff the allegations regarding the accrual of a vested right should have been inserted in the petition instead of in the replies. As the issues were framed the contention of each party was made clear, and in the trial neither was denied a full opportunity to develop the facts. Whether or not the plaintiff's pleadings presented a departure, and whether or not she should have been required to reshape them, the error, if any, did not prejudice the substantial rights of the defendants, and does not justify a reversal.

While there is some conflict on the subject, the weight of authority supports the view, which we think well founded in reason, that where the designation of the beneficiary in a certificate issued by a mutual benefit association is made in pursuance of an agreement, founded upon a sufficient consideration, the person designated acquires a vested interest, and, unless by reason of countervailing equities, can not be displaced, although the rules of the association permit the member to change the beneficiary at will. (12 L.R.A. N.S. 1207, note; 12 Ann. Cas. 944, note; see, also, opinion in Great Camp K. O. T. M. v. Savage, 135 Mich. 459, 98 N.W. 26.)

"Where the member, upon taking out the certificate, makes an agreement with the beneficiary that the latter should pay the assessments, and that no substitution should be made, the beneficiary, upon performing this agreement, acquires a vested right." (3 A. & E. Encycl. of L. 993.)

"Equities may exist in favor of the original beneficiary which will preclude the member from substituting a new beneficiary who has no equity superior to that of the person originally designated. . . . An equity in favor of the original beneficiary precluding the substitution of another in his place may rest on a contract between him and the member, based on a sufficient consideration, by which he is to receive the benefits. Thus if a member designates a beneficiary, or, having designated a beneficiary, delivers the certificate to him, on an agreement that he shall receive the benefits, in consideration of past advances made by him, or present or future advances, or in consideration of his promise to pay dues and assessments, which promise is fulfilled, the member can not thereafter substitute a different person as beneficiary." (29 Cyc. 128.)

The defendants claim that there was no substantial evidence of any agreement on the part of George T. Savage to name and retain his wife as the beneficiary of his membership certificate. The argument is in part a challenge of the credibility of a portion of the testimony. A daughter of the plaintiff testified that she heard her father tell her mother that he intended to take out insurance for her if she would assist in paying the dues, and he would never change it. The plaintiff testified that he said substantially the same thing to the children in her presence. Her testimony is objected to as a...