Supreme Council of Royal Arcanum v. Wishart

• Decision Date: 08 January 1912
• Docket Number: 53 (1,526).
• Citation: 192 F. 453
• Parties: SUPREME COUNCIL OF ROYAL ARCANUM v. WISHART.
• Court: U.S. Court of Appeals — Third Circuit

192 F. 453

SUPREME COUNCIL OF ROYAL ARCANUM v. WISHART.

No. 53 (1,526).

United States Court of Appeals, Third Circuit.

January 8, 1912

Joseph A. Langfitt (Langfitt & McIntosh, on the brief), for plaintiff in error.

J. Roy Dickie (Wishart & Dickie, on the brief), for defendant in error.

Before GRAY, BUFFINGTON, and LANNING, Circuit Judges.

GRAY Circuit Judge.

Action was brought in the court below by the defendant in error against the plaintiff in error (hereinafter called the defendant), to recover, as beneficiary in a certain benefit certificate issued by the defendant to Otho Milton Hartzell as a member of one of its councils, the sum of $3,000 covenanted to be paid upon the death of the said Hartzell to the said beneficiary, such certificate being dated the 12th day of September, 1908. The defendant is a beneficial association, with the fraternal and secret features common to such organizations. The certificate sued upon was one issued upon the surrender of a prior certificate, for the same amount, dated the 10th day of April, 1890, in which the wife of the insured was named as beneficiary.

The rules of the society permitted a member holding a benefit certificate to change the beneficiary, upon a written request and in compliance with certain regulations and conditions prescribed in relation thereto. Upon the surrender of the former certificate, it issued a new one, with the new beneficiary named therein. It is not denied that the certificate sued upon was issued to the decedent in pursuance of his right, as a member of the association, to change the beneficiary named in the original certificate.

At the time of Hartzell's initiation as a member of the society in 1890, the by-laws of the same were silent as to the suicide of a member, and its effect upon his beneficiary's right to collect the amount of insurance stated in the certificate. On August 1, 1904, 14 years after Hartzell's initiation, the laws of the order were amended, and the following section was added:

'Section 473A. The taking of his own life by a member within five years from and including the date of his initiation, whether he be then sane or insane, shall cancel and render null and void the benefit certificate and terminate all rights and privileges of all persons thereunder and under his membership in the order.'

On August 1, 1908, this section was amended by adding to it the following paragraph:

'The taking of his own life by a member, whether he be then sane or insane, after five years from the date of his initiation, and within five years from and including the date of his changing from a lower to a higher certificate, shall cancel and render null and void the benefit certificate, to the extent of the increased amount of the benefit, and terminate the rights of all persons thereto.'

It is not disputed that, under the stipulation contained in the benefit certificate, that the insured must 'comply with the laws, rules and regulations now governing the said council and fund, or that may hereafter be enacted by the Supreme Council to govern said council and fund,' the amendments above quoted would apply to and modify the contract sued upon, if they were applicable thereto. But it is obvious that neither of these by-laws apply to the case in hand. The first does not, because Hartzell's death by his own hand took place 18 years after his initiation as a member of the society, and the second does not, because the new certificate issued by the society was not a change from a lower to a higher amount of insurance. We therefore cannot agree to the proposition urged on the part of the appellee, if the question could be raised on this record, that 'where a life insurance company or a beneficial society fixed a period in its policy, certificate or by-laws, within which, if the insured commit suicide, the policy or certificate should be avoided, death of the insured by suicide after the expiration of such period does not constitute a defense to an action on the policy.'

We must assume from reason as well as authority that, prior to the adoption of the by-laws in question, it was not 'within the contemplation of either party to the contract, that the company shall be liable upon its promise to pay, where the insured, in sound mind, by destroying his own life, intentionally precipitates the event upon the happening of which such liability was to arise. ' 'Suicide' by one of sound mind 'does not 'avoid' the policy; against this event, the policy does not exist. ' Ritter v. Insurance Co., 169 U.S. 139, 18 Sup.Ct. 300, 42 L.Ed. 693. The effect of the suicide upon the liability of the insurer is of course predicated upon the determination of the question, whether the insured was sane or insane. Davis v. Supreme Council of the Royal Arcanum, 195 Mass. 402, 81 N.E. 294, 10 L.R.A. (N.S.) 722; Burt v. Union Cent. Ins. Co., 187 U.S. 362, 23 Sup.Ct. 139, 47 L.Ed. 216. In this case the principle is applied where the insured has brought about his own death by capital execution as the result of the crime of murder of which he was convicted. Hopkins v. Northwestern Life Assur. Co. (C.C.) 94 F. 729.

By the amendment to the by-laws, it is provided (as we are given to understand is now the case in most, if not all, life...