Stoelker v. Thornton

• Decision Date: 07 November 1889
• Citation: 6 So. 680,88 Ala. 241
• Parties: STOELKER v. THORNTON ET AL.
• Court: Alabama Supreme Court

6 So. 680

88 Ala. 241

STOELKER v. THORNTON ET AL.

Supreme Court of Alabama

November 7, 1889

Appeal from city court of Montgomery; T. M. ARRINGTON, Chancellor.

Tompkins, London & Troy, for appellant.

Watts & Son, for appellees.

STONE C.J.

The present bill seeks to bring Stoelker, the executor, to a settlement of the estate of Charles J. Watson, deceased, and to have certain described funds distributed to complainants who are next of kin to Watson. Stoelker resists the recovery and insists that the entire funds in controversy are his property. This is $5,000; $2,000 of it being a benefit secured to Watson in a benevolent society known as the "Ancient Order of United Workmen," and the other $3,000 being the sum of two like benefits or policies due to Watson from the society known as the "Knights of Pythias." Each of these sums was payable on the death of Watson, with certain provisos, which were complied with. After the death of Watson and the probate of the will, the two societies severally paid to Stoelker the amounts called for in the policies. Stoelker was the only creditor, and his claim, exclusive of the funeral and administration expenses, was a little less than $1,000.

The one certificate declared that Watson was "entitled to all the rights and privileges of membership in 'Ancient Order of United Workmen,' and to participate in the beneficiary fund of the order to the amount of two thousand dollars," payable to his estate at his death, with conditions which, as we have said, we need not state here. The other two certificates or policies, aggregating $3,000, were issued by the society or order known as the "Knights of Pythias." These, also, had conditions not necessary to be noticed here. They severally secured the sums of one and two thousand dollars, to be paid "to the estate of the said Charles J. Watson, as directed by said brother in his application, or to such other person or persons as he may subsequently direct, by will or otherwise, and entered upon the records of the supreme master of the exchequer, upon due notice and proof of death and good standing in the rank at the time of the death." These several certificates or policies were issued in 1880; and by their terms, and by the rules of said societies, the member holding them was bound to make certain payments when called on, as a condition of keeping them alive. It is neither averred nor shown that Watson, when he made his application for membership in the society known as "Knights of Pythias," directed or designated therein any person to whom the benefit money was to be paid at his death, nor is it averred or shown that any direction, given by will or otherwise, was ever "entered upon the records of the supreme master of the exchequer."

Until 1883, Watson paid all the calls made upon him, and kept each of said policies alive.

At that time, his health having failed, and desiring to travel, as a means of restoring it, he entered into the following agreement with Stoelker: He owed Stoelker over $400, and, in payment of said indebtedness, and in consideration of other $500, paid, and agreed to be paid, by Stoelker to him, he agreed to sell said three policies or benefit certificates to Stoelker, he (Stoelker) assuming to pay all calls that might thereafter be made on said policies or benefit certificates. Pursuant to this agreement, Watson petitioned the two societies to have Stoelker substituted as the beneficiary in each of the policies.

The society known as the "Ancient Order of United Workmen" conformed to Watson's directions, and substituted Stoelker as the beneficiary in the policy it had issued. The Knights of Pythias had a regulation that policies issued by that society could not become the subject of sale for a valuable consideration, but could pass to a beneficiary for love and affection only. It refused to recognize the sale and transfer to Stoelker, and refused to substitute him as the beneficiary. In March, 1884, Watson executed his last will and testament, and therein bequeathed to Stoelker said two policies issued by the Knights of Pythias, describing him as a friend who had befriended him, and making no allusion to the debt, nor to the transfer. It appointed Stoelker executor; and, Watson dying in June afterwards, the will was proven and established. There is no averment nor proof that Watson was not mentally capable of making a will, nor is there imputation of fraud or undue influence in its procurement. The assault made upon it will be stated further on. It is not charged or pretended that Stoelker did not perform all he promised, and did not pay the $500 to Watson, and did not meet all calls that were made a condition on which the vitality of said policies was to be preserved. Each society paid the amount of the policies to Stoelker; and, as we have said, the present suit was instituted to obtain the distribution of the fund among Watson's next of kin. He died without lineal descendants.

The right of recovery in this case is based on the following propositions: That the benefit certificates are, in substance, life-insurance policies on Watson's life; that a stranger, such as Stoelker was, has no insurable interest, and can neither sue out, nor lawfully acquire, insurance on his life, while he (Watson) was living; that, as a consequence, the attempted sale of the policies to Stoelker in 1883 was against public policy, and was void; and that the transaction shows on its face that the will of 1884 was executed simply as a means of carrying into effect the illegal agreement of sale made in 1883. On these grounds it is contended that Stoelker can only claim to the extent he was a creditor of Watson, for to that extent only had he an insurable interest. We will first consider this case on the agreement of sale made in 1883, and independently of the will.

It is very clear that the attempted contract of sale of the benefit certificate issued by the society of the Knights of Pythias was inoperative and void. It was against public policy for Stoelker to...