Supreme Council of Royal Arcanum v. Heitzman
| Decision Date | 08 June 1909 |
| Citation | 120 S.W. 628,140 Mo.App. 105 |
| Parties | SUPREME COUNCIL OF THE ROYAL ARCANUM, Plaintiff, EFFIE HEITZMAN, Appellant, v. SUSIE HEITZMAN, Respondent |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. Moses N. Sale Judge.
AFFIRMED.
Judgment affirmed.
Bass and Brock for appellant.
(1) Section 1417 of the Revised Statutes of Missouri is unconstitutional and void because it is in violation of section 15, article 2, and section 30 of article 2 of the Constitution of Missouri in that it impairs the obligation of contracts and attempts to deprive the insured in fraternal organizations of his right and liberty to enter into a contract, reasonable and salutary in its purposes, without due process of law. State v. Tie and Timber Co., 181 Mo. 536; State v. Julow, 129 Mo. 163. (2) The constitutionality of the above statute can be attacked in this court for the first time on appeal, because said statute is not raised in the issues, but is involved in the case only by way of argument in the brief of counsel for interpleader Susie Heitzman, and it is necessarily and incidentally involved in this case in said manner for a correct decision of the same and cannot be shown from the record. This is also an equity cause. Kreyling v. O'Reilly, 97 Mo.App. 384. (3) Under the contract between Mr. Heitzman and plaintiff order entered into in the year 1895, he became vested with a valuable property right, the right to pay the agreed consideration and to appoint a person to take the benefit and to convey to said beneficiary by contract a vested interest in the fund. Bacon on Benefit Societies (3 Ed.), 1904, p. 531; Hysinger v. Supreme Lodge, K. L. of H., 42 Mo.App. 627; Loysaght v. Stone Masons, etc Assn., 55 Mo.App. 538; Froelich v. Musicians' Mut. Ben. Assn., 93 Mo.App. 383. (4) Under this contract with the order and under the common law applying to it, Mr. Heitzman had an undoubted right to make the contract alleged in appellant's interplea conveying to appellant a vested right in the fund due under the certificate issued solely in her favor. Smith v. Mut. Ben. Society, 123 N.Y.S. 932; Leaf v. Leaf, 92 Ky. 167; Bacon on Ben. Societies (3 Ed.), 295; Sup. Council v. Murphy, 55 A. 497; Conselyou v. Sup. Council, 38 N.Y.S. 248; Grumbley v. Harrold, 125 Cal. 24; Goodrich v. Bohan, 52 S.W. 1105; Bernard v. Grand Lodge, 13 So. Dak. 132. (5) Neither the fraternal orders nor the State can abridge the essential rights of the member existing under the law and the contract entered into between the member and the fraternal order at the time of the creation of the membership, which contract is composed not only of the certificates issued to the member, but the then existing laws of the order. Morton v. Sup. Council, 100 Mo.App. 76; Rheinhold v. Kerrigan, 85 Mo.App. 256; Elsea v. Pryor, 87 Mo.App. 157; Huff v. Woodmen of the World, 85 Mo.App. 96; Collins v. German American Mut. Life Assn., 84 Mo.App. 555, also id., 85 Mo.App. 242; Leete v. Bank, 115 Mo. 184; St. Charles v. Hackman, 133 Mo. 634; Ellerbe v. Ben. Assn., 114 Mo. 501; State ex rel. v. Greere, 78 Mo. 188. (6) A contract between husband and wife will now be upheld and enforced in this State either in equity or in law. Grimes v. Reynolds, 184 Mo. 679; Rice, Stix & Co. v. Sally, 176 Mo. 107. (7) Section 1418 of the Revised Statutes of Missouri, 1899, has no application to this case. Grand Lodge A. O. U. W. v. Dister, 77 Mo.App. 608; McGrew v. McGrew, 190 Ill. 604. (8) In any event, under the appellant's interplea, she is entitled to so much of the fund, $ 2,000,000 payable to Susie Heitzman under the last certificate issued as will make her whole in case the contract of Susie Heitzman is sustained. Leaf v. Leaf, 17 S.W. 354; Grand Lodge A. O. U. W. v. O'Malley, 89 S.W. 74.
J. C. Shaner and Frederick H. Bacon, for respondent, filed argument.
Plaintiff is a fraternal association incorporated under the laws of Massachusetts, and authorized to do business in this State. On January 10, 1905, Joseph Heitzman applied for and received a certificate of membership in plaintiff company, binding him to comply with all the laws, rules and regulations of the order and binding plaintiff, if he did, to pay his children Bessie, Katy and Susie, the sum of three thousand dollars at his death. In 1896 Heitzman surrendered said benefit certificate and obtained a new one payable to the same beneficiaries. On July 20, 1901, he surrendered the second benefit certificate for a new one payable one-third to his wife, Effie, and two-thirds to Susie Heitzman. Plaintiff alleges the said surrender of the certificates and issuance of others in their place was according to the by-laws of the order. On November 9, 1905, Joseph Heitzman died and plaintiff then became liable to pay $ 3,000 to his legal beneficiaries. After his death Effie Heitzman demanded the entire amount of the benefit certificate, to-wit, $ 3,000, asserting that in order to comply with the formalities required for a change of beneficiaries, the insured fraudulently had obtained possession of the certificate issued in her favor July 20, 1901, and that Susie Heitz man demanded of plaintiff $ 2,000, which she asserted was payable to her under the terms of the certificate last issued. These facts were set up in a petition in the nature of a bill of interpleader filed by plaintiff, the amount of the certificate was paid into court and plaintiff prayed defendants be enjoined from bringing action against it on the certificate and be required to interplead for the money among themselves. Pursuant to a stipulation entered into by the parties, the court discharged plaintiff, ordered the defendants to interplead for the fund and to bring their certificates into court to be held by the clerk until final disposition of the case. Appellant, Effie Heitzman, filed her interplea in which she alleged most of the facts stated supra regarding transactions between Joseph Heitzman and the company until the date of the certificate issued July 20, 1901; alleged the certificate issued to Heitzman in 1896, wherein his three children were beneficiaries was surrendered by him to the company and a new one taken out payable to her (appellant) pursuant to an agreement between her and him entered into in July, 1901, that she should pay plaintiff all dues and assessments to fall due and Heitzman should cause a new benefit certificate to be issued by the company in which she (appellant) should be the beneficiary to the amount of $ 3,000; that it was agreed by the insured and herself the former should not thereafter change the beneficiary so that any other person would become interested in the proceeds of the certificate, so long as she should continue to pay the dues and assessments and take care of said Joseph Heitzman in his last days; pursuant to said arrangement between her and Joseph Heitzman, the latter caused the certificate issued July 20, 1901, to be issued in said Effie's favor for the full amount of $ 3,000, and afterwards she paid all dues and assessments accruing on said certificate and took care of said Heitzman in fulfillment of her agreement; on or about March 11, 1905, said Joseph Heitzman, during her absence from their home, secretly took said benefit certificate from her custody without her knowledge or consent, it having been delivered to her under the contract between the two; said Joseph surrendered the same and caused a new certificate to be issued by the company, whereby he attempted to divest said Effie of her vested interest in the $ 3,000 and to make $ 2,000 of the benefit payable to Susie, his daughter, and only $ 1,000 payable to her, said Effie; that she paid to the order a large sum of money, the exact amount she could not state, to keep up the dues and assessments on the certificate, and paid out also a large sum for the support, maintenance and medical treatment of her husband. On those facts and others corresponding to what we have recited from plaintiff's petition, appellant prayed the court to decree the whole $ 3,000 be paid over to her and for further proper relief. Susie Heitzman moved the court to enter judgment in her favor on the interplea filed by Effie Heitzman, on the ground the facts stated in said interplea gave said Effie no right to more than $ 1,000 of the proceeds of the certificate. This motion was sustained, the court entered judgment on the pleadings in favor of Susie for $ 2,000 of the fund and in favor of Effie Heitzman for $ 1,000. Said Effie (appellant) moved the court to arrest the judgment for various reasons, the sum of which is she was entitled to the entire fund on the facts stated in her interplea. This motion was overruled and she appealed.
A statute of this State was enacted in 1897, which concerns the matter in hand. Said act declared no contract between a member of a fraternal society and his beneficiary that the latter, or any one for him, should pay such member's assessments and dues, should give the beneficiary a vested right in the benefit certificate, or in the benefit, or deprive the member of the right to change the name of the beneficiary and revoke the certificate; further, that the money or other benefit, charity, relief or aid already paid or to be paid, provided or rendered by any fraternal association, should not be liable to attachment or execution by trustee, garnishee or other process, and should not be seized, taken or applied, by any legal or equitable process or by the operation of law, to pay any debt or liability of the certificate holder, or of any beneficiary named in the certificate, or any person who might have a right thereunder. [Laws 1897, p. 132; R. S. 1899, sec 1417, 1418.] Appellant's counsel concede if those statutes govern the case, they...
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