Sovereign Camp, W.O.W., v. Feltman, 6 Div. 124.

• Decision Date: 30 March 1933
• Docket Number: 6 Div. 124.
• Parties: SOVEREIGN CAMP, W. O. W., v. FELTMAN.
• Court: Alabama Supreme Court

147 So. 396

226 Ala. 390

SOVEREIGN CAMP, W. O. W., v. FELTMAN.

6 Div. 124.

Supreme Court of Alabama

March 30, 1933

Appeal from Circuit Court, Marion County; Norman Gunn, Special Judge.

Action on a policy of life insurance by Mary W. Feltman against the Sovereign Camp of the Woodmen of the World. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Ernest B. Fite, of Hamilton, and Arthur F. Fite, of Jasper, for appellant.

Wm. L Chenault, of Russellville, for appellee.

BROWN Justice.

The case was submitted to the jury under counts 1, 6, and 7, the plea of the general issue, special pleas 4, 5, and 6 addressed to counts 1 and 7, plea 7 to count 6, and replications 1 and 2 to pleas 4, 5, and 6 as an answer to count 1.

Count 1 is in Code form (Code 1923, § 9531, form 12) for suits on policies of life insurance. Count 7 is of like import, with the following averment added, no doubt in anticipation of the defendant's defense, to wit: "And plaintiff avers that the defendant, through its servant or agent, while acting within the line and scope of his employment represented to the said Hayne Feltman that said policy was no good and that the interest had eaten it up and by said representations, which were false and fraudulent, induced the said Hayne Feltman to deliver said policy here sued on to the defendant, or its said agent or servant aforesaid, to the plaintiff's damage to the amount of this policy."

Count 6 is in tort, alleging that in June, 1929, the defendant acting through its servant or agent, by fraud and deceit, obtained from the possession of plaintiff's husband, Hayne W Feltman, a life insurance policy insuring his life, in the sum of $1,000, for the benefit of plaintiff who was named as beneficiary therein, on which all premiums had been paid up and through the year 1929; and that, during the life of said policy, her said husband died, and, in consequence of said fraud and deceit, plaintiff was damaged in the sum claimed.

The appellant's first contention is that, under counts 1 and 7, plaintiff was not entitled to recover on a "Beneficiary Certificate" issued by the defendant, "a Fraternal Beneficiary Association," and there was a fatal variance between the averments and the proof, citing in support of this contention Gilliland v. Order of Ry. Conductors of America, 216 Ala. 13, 112 So. 225, 227, and United States Health & Accident Ins. Co. v. Savage, 185 Ala. 232, 64 So. 340.

Before the adoption of rule 34 of Circuit Court Practice, it was repeatedly ruled that a complaint in Code form in an action on a life insurance policy would not justify a recovery on such special contract, and that the question was properly presented by requesting the affirmative charge. United States H. & A. Co. v. Veitch, 161 Ala. 630, 50 So. 95; United States Health & Accident Ins. Co. v. Savage, supra. But the purpose of that rule was to prevent reversals on the ground of a variance, if the defect in the pleading could be cured by amendment, unless the question was specifically called to the attention of the trial court. Woodmen of the World v. Maynor, 209 Ala. 443, 96 So. 352.

The appeal in Gilliland's Case, supra, was by the plaintiff, and the observation in that case was made in passing on the ruling against the appellant on a demurrer to a count in his complaint.

The question was not raised, as required by the rule, and the court will not be put in error for refusing the affirmative charge as to counts 1 and 7 of the complaint.

Appellant's next contention is that the averments of count 6 show that the plaintiff's interest, as beneficiary, in the policy was not a vested interest, but a mere expectancy, and that its procurement and cancellation by the defendant through fraud and deceit practiced on the insured will not support an action on the case by her.

As against the right of the insured to change the beneficiary, in accordance with the "laws, rules or regulations of the society," it is well settled that a beneficiary named in the policy has no vested interest. This is the effect of the statute, which, after stating certain restrictions as to who may be named as beneficiary, provides: "Within the above restrictions each member shall have the right to designate his beneficiary, and, from time to time, have the same changed in accordance with the laws, rules or regulations of the society, and no beneficiary shall have or obtain any vested interest in the said benefit until the same has become due and payable upon the death of the said member." Code 1923, § 8445; Slaughter v. Grand Lodge, 192 Ala. 301, 68 So. 367; Ex parte Mosaic Templars of America (Parker et al. v. Mosaic Templars of America), 212 Ala. 471, 103 So. 65; Summers v. Summers, 218 Ala. 420, 118 So. 912.

In the last-cited case, it was held that imposition or fraud practiced by the insured against the insurer-the society-in effecting a change of the beneficiary, could not be availed of by the former beneficiary, who had been supplanted, to cancel the insured's last designation. However, the supplanted beneficiary was held to have an equity in the proceeds to the extent of premiums paid by her in maintaining the policy in force.

While this is so, the cases are agreed that a beneficiary, so long as the status or relation is not changed by the binding consent of the insured, has such substantial interest in the policy contract as affords a just basis for a right of action. Meyerson v. New Idea Hosiery Co., 217 Ala. 153, 115 So. 94, 55 A. L. R. 1231; Barnett v. Boyd, 224 Ala. 309, 140 So. 375; North Carolina Mut. Life Ins. Co. v. Martin, 223 Ala. 104, 134 So. 850.

The fact that the plaintiff's interest was contingent dependent upon the death of the insured to convert it into a legal title, is no reason why the insurer could, through fraud and deceit practiced on the insured, destroy such right. The law operating on the relation of the...