Supreme Council of Royal Arcanum v. McKnight

• Decision Date: 19 February 1909
• Citation: 238 Ill. 349,87 N.E. 299
• Parties: SUPREME COUNCIL OF ROYAL ARCANUM v. McKNIGHT et al. McKNIGHT v. LITTLE.
• Court: Illinois Supreme Court

238 Ill. 349

87 N.E. 299

SUPREME COUNCIL OF ROYAL ARCANUM

v.McKNIGHT et al.

McKNIGHT

v.LITTLE.

Supreme Court of Illinois.

Feb. 19, 1909.

Appeal from Appellate Court, First District, on Appeal from Circuit Court, Cook County; J. W. Mack, Judge.

Bill of interpleader by the Supreme Council of the Royal Arcanum against Luella M. McKnight and Emma Little. From a decree of the Appellate Court (140 Ill. App. 421) affirming a decree of the circuit court in favor of Emma Little, Luella M. McKnight appeals. Reversed and remanded.Willard R. Powers, for appellant.

W. S. Oppenheim, for appellee.

The Supreme Council of the Royal Arcanum, a corporation organized under the laws of the state of Massachusetts and doing business in the state of Illinois, filed its bill of interpleader in this case, in which it was alleged that Luella M. McKnight and Emma Little each claimed to be entitled to the payment of the benefits mentioned in a certificate issued to James H. Little as a member of Garden City Council, one of the subordinate bodies of the Royal Arcanum, in 1898, in which Luella M. McKnight was designated as the beneficiary. The bill alleged that the society was willing and desirous of paying the amount named in the certificate to the person who, in the judgment of the court, was entitled to it, and asked that it be permitted to pay said sum into court for the benefit of such of the contending parties as the court should decide was entitled to it and upon such payment the society should be released from further liability.

Luella M. McKnight answered the bill, alleging that she was a daughter of a sister of Little's deceased wife and was therefore his niece; that she had been a member of his family and dependent upon him for support since 1887, when she was 10 years of age; that after the death of Little's wife, who was designated as the beneficiary in the original certificate, he applied for a change of beneficiary in the certificate, and explained to the officers of Garden City Council, agents of the supreme council, that she was eligible to be named as beneficiary in the certificate, and this was so done. The old certificate was surrendered and the one designating Luella M. McKnight as beneficiary was issued in May, 1898. She further alleged in her answer that, after said certificate was so issued, Little became financially embarrassed and unable to pay his dues and assessments and was in arrears $14.98; that he wrote her if she wished to keep up his dues and keep the certificate in force he was willing she sould do so; and that thereupon she called upon the collector of the subordinate council, showed him the letter, explained fully her relationship to Little, and was informed that, if she made the payments, she would receive the benefits, whereupon she paid the arrears and afterwards paid all assessments up to the time of Little's death, aggregating $300.

Emma Little, after admitting the allegations of the bill about which there was no controversy, in her answer averred that the Supreme Council of the Royal Arcanum was without authority to pay any part of its beneficiary fund to any one who did not bear the relation to the deceased member of wife, child, relative of or person dependent upon such member, and set out the constitution and by-laws defining the persons who might be designated as beneficiaries. Her answer further alleges that she was married to Little in December, 1899, and is his widow, and as such is entitled to the benefit mentioned in the certificate, and that Luella M. McKnight is not entitled to said benefit for the reason that she was not the niece of said Little nor in any manner related to or dependent upon him.

Upon the hearing the court found and decreed that Luella M. McKnight was not the niece of Little, and could not under the laws of the order be named a beneficiary under the certificate; that Emma Little was the wife of the said James H. Little at the time of his death, October, 1904, and under the laws of the order was entitled to the sum deposited by it with the clerk; and that Luella M. McKnight was not entitled to any part thereof. From that decree Luella M. McKnight, who will hereafter be referred to as appellant, appealed to the Appellate Court. That court affirmed the decree of the circuit court, and she has prosecuted a further appeal to this court.

FARMER, J. (after stating the facts as above).

When the original certificate was issued to James H. Little in 1895, his then wife, Olivia S. Little, was named as beneficiary. Shortly after her death, in 1898, Little surrendered the original certificate in accordance with the rules of the organization and procured another one, dated May 13, 1898, in which Luella M. McKnight, ‘niece,’ was designated as beneficiary. The objects of the Royal Arcanum as defined by its charter are: ‘To establish a widows' and orphans' benefit fund, from which, on the satisfactory evidence of the death of a member of the order who has complied with all its lawful requirements, a sum not exceeding $3,000 shall be paid to the wife, children, relatives of or persons dependent upon such member, as limited and described in the laws of said order relating to benefit certificates, as he may direct in accordance with said laws.’

When Little became a member of the Royal Arcanum, section 324 of the by-laws provided that ‘a benefit may be made payable to any one or more persons of any of the following classes only: Grade 1st.-Member's wife. * * * Grade 8th.-Member's nieces and nephews.’ That by-law remained in force until August 1, 1904, when it was amended to read as follows: ‘A benefit may be made payable to any one or more persons of any of the following classes only: Grade 1st.-Member's wife. * * * Grade 8th.-Member's nieces and nephews, (children of brothers and sisters of the whole blood.) Grade 9th.-Member's nieces and nephews, (children of brothers and sisters of the half blood.) * * * Grade 13th.-Member's relatives other than those named in the precedent grades who might be distributees of the personal estate of such member upon his death intestate, in either of which cases no proof of dependency of the beneficiary designated shall be required; but in case of adoption, proof of the legal adoption of the child or parent designated as beneficiary, satisfactory to the supreme secretary, must be furnishedbefore the benefit certificate can be issued. All relatives of a member to whom a benefit may be payable as above provided must be blood relatives.’ Section 330 of the by-laws reads as follows: ‘If at the time of the death of a member who has designated as beneficiary a person of class second, the dependency required by the laws of the order shall have ceased or shall be found not to have existed, or if the designated beneficiary is his wife and they shall be divorced upon the application of either party, or if any designation shall fail for illegality or otherwise, then the benefit shall be payable to the person or persons mentioned in class first, section No. 324, if living, in the shares and order of precedence by grades as herein enumerated, the persons living of each precedent grade taking in equal shares, per capita, to the exclusion of all persons living of subsequently enumerated grades, except that in the distribution among persons of grade second the children of deceased shall take by representation the share the parent would have received, if living. If no one of said class first shall be living at the death of the member, the benefit shall revert to the widows' and orphans' benefit fund.’ It is by virtue of this by-law that Emma Little, hereafter referred to as appellee, claims to be entitled to the money; her contention being that under the laws of the Royal Arcanum appellant could not be designated beneficiary, and, that such designation of her having failed for illegality, appellee, as a person mentioned in grade 1, in the classification of persons who may be named as beneficiaries under section 324 of the by-laws, is entitled to the money.

There is no dispute about the facts. The controversy relates only to questions of law. The principal points of controversy may be stated as follows: Appellant contends that she was a proper person to be designated as beneficiary in the certificate when it was issued, and that her rights are not affected by the change in the by-laws in 1904; also, that, when the Royal Arcanum filed its bill in this case, it waived any defense it might have against the payment of the money to appellant; and that appellee cannot set up any matter against the payment of said money to appellant so waived by the...