Smith's Adm'r v. Hatke

• Decision Date: 12 June 1913
• Citation: Smith's Adm'r v. Hatke, 115 Va. 230, 78 S.E. 584 (1913)
• Court: Virginia Supreme Court
• Parties: SMITH'S ADM'R. v. HATKE.

(115 Va. 230)

78 S.E. 584

SMITH'S ADM'R.

v.HATKE.

Supreme Court of Appeals of Virginia.

June 12, 1913.

1. Executors and Administrators (§ 46^*)— Assets—Death Benefit—Insurable Interest.

Where an unincorporated association organized wholly for eleemosynary purposes provided for a death benefit fund to be voluntarily donated by members, the contract providing that the total amount of the subscription was to be paid to such beneficiary as the member should designate, and that he might change the beneficiary on notice to the district agent of the association, such benefit formed no part of the member's estate, and hence was not recoverable by his administrator from the beneficiary on the theory that the latter had no insurable interest in the member's life.

[Ed. Note.—For other cases, see Executors and Administrators, Cent. Dig. § 297; Dee. Dig. § 46.*]

2. Insurance (§§ 767, 777, 778, 785*)—Interest in Fund.

Neither the estate of a member of a beneficial association nor his next of kin has any interest in a death benefit fund where the member fails to designate a beneficiary, or where the beneficiary designated predeceases the member, has no insurable interest in his life, or for any other reason is not entitled to the fund, which thereupon reverts to the association.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 1929-1931, 1942-1944, 1945, 1974; Dec. Dig. §§ 767, 777, 778, 785.*]

Error to Circuit Court of City of Richmond.

Action by Thomas Smith Jr.'s administrator against Louis B. Hatke. Judgment for defendant, and plaintiff brings error. Affirmed.

Edward L. Ryan and O'Flaherty & Fulton, all of Richmond, for plaintiff in error.

Sands & Swartwout and Leon M. Bazile, all of Richmond, for defendant in error.

WHITTLE, J. The plaintiff in error, as administrator de bonis non of Thomas Smith, Jr., deceased, brought this action of assumpsit against the defendant in error, Louis B. Hatke, to recover $1,297.80, which sum was paid to the defendant in the following circumstances: On November 25, 1907, Thomas Smith, Jr., who was a subscriber to an association entitled the "Voluntary Subscription Fund of Pullman Conductors and Office Men, " in accordance with the contract, rules, and regulations of the association, designated the defendant as his beneficiary in case of his death. Smith died March 6, 1909, and thereupon the association paid the fund to the defendant.

Upon the trial of the case the defendant demurred to the plaintiff's evidence, and to the action of the circuit court sustaining the demurrer and rendering judgment thereon for the defendant in error, Hatke, this writ of error was granted.

The following is the form of the contract out of which the transaction arose:

"Whereas, it has been deemed advisable that a mutual and voluntary agreement be entered into by the subscribers of these presents and all other like subscribers, that an association be formed to be entitled—

"Voluntary Subscription Fund of Pullman Conductors and Office Men.

"Therefore, be it agreed, that in the event of the death from any cause whatsoever of a subscriber to this fund each and every other subscriber shall give and donate the sum of one dollar. The total amount of such subscription to be paid to such beneficiary as may be designated by said subscribers; it being understood that subscriber can at any time change the name of beneficiary upon due notice to district agent. It is further agreed, that if any subscriber default in any single call for subscription, that his name be stricken from the list of subscribers, and that he shall forfeit any claims for benefits under the terms of this agreement."

Rule 6: "All subscriptions must be paid within thirty days after notice of death is received, and when subscriptions are completedin each district a personal check or draft will be made out in the name of the beneficiary and sent to general agent, who will forward same to home station of deceased."

The association is not a party to this litigation, and the plaintiff in error asserts no demand against it.

The entire fabric of plaintiff's case rests upon the propositions (1) that the contract between the association and his intestate is to be regarded as an ordinary life insurance policy upon the life of the latter, which upou his death constituted an asset of his estate; and (2) that the title of the estate to the fund was not affected by Smith's designation of Hatke as his beneficiary, since, it is said, Hatke had no insurable interest in Smith's life, either as creditor or in any other capacity. Therefore, that his designation as a beneficiary was a mere wager contract on the life of Smith and was void as contrary to public policy. Unless the first proposition can be maintained, there will be no occasion to concern ourselves about the second. In other words, unless the fund is an asset of Smith's estate, the action cannot be maintained by his administrator for its recovery, whatever may be the...