The Masonic Benevolent Association v. Bunch

• Decision Date: 28 March 1892
• Parties: The Masonic Benevolent Association v. Bunch et al.; Anderson, Executor, Appellant
• Court: Missouri Supreme Court

19 S.W. 25

109 Mo. 560

The Masonic Benevolent Association v. Bunch et al.; Anderson, Executor, Appellant

Supreme Court of Missouri, Second Division

March 28, 1892

Appeal from Hannibal Court of Common Pleas. -- Hon. Thomas H. Bacon Judge.

Reversed and remanded.

F. H Bacon and Anderson & Schofield for appellant.

(1) Under the charter, constitution and by-laws of the respondent association, Lewis W. Bunch had no power to designate David W. Bunch as his beneficiary, because said David was neither the widow, orphan, heir or devisee of Lewis. The contract between an association like the one at bar and its members is to be found in its certificate, if one be issued, taken in connection with the constitution and by-laws of the society. Bacon on Benevolent Societies, sec. 161, and cases cited; Britton v. Supreme Council, 46 N.J.Eq. 102; 18 A 457; Lodge v. Knight, 117 Ind. 489; Lorcher v. Supreme Lodge, 72 Mich. 316; 40 N.W. 545; Lamont v. Legion of Honor, 31 F. 177. (2) It is settled law that a member of a benefit society cannot designate as beneficiary one of a class not named in its charter, nor can the society agree to pay one of a class not embraced in such charter. Masonic Ass'n v. Miller's Adm'r, 13 Bush, 489; Legion of Honor v. Perry, 140 Mass. 580; Aid Ass'n v. Gonser, 43 Ohio St. 1. (3) It follows that the designation of David was void. (4) If this be so the benefit would go to the estate of the deceased, and the executor would take under the will, because the original designation being void, it is the same as if no designation had been made. Britton v. Sup. Council, 46 N.J.Eq. 102; 18 A. 675; Keener v. Grand Lodge, 38 Mo.App. 543. (5) Moreover, under the constitution (art. 4, sec. 3), the directors of the association have simply the power to issue a naked certificate of membership without provision as to beneficiary. If the certificate contains provisions unauthorized by the laws of the society, such provisions are void, because ultra vires, and no estoppel can arise because the member is supposed to know the laws. Legion of Honor v. Perry, 140 Mass. 580; Ben. Ass'n v. Hoyt, 46 Mich. 473; Supreme Council v. Smith, 45 N.J.Eq. 466; 17 A. 770; Knights of Honor v. Nairn, 60 Mich. 44. (6) In any way that the contract is viewed Lewis W. Bunch had under it the right to change the beneficiary at any time and at his pleasure, because under the contract he had simply the power of appointment which could be exercised freely so long as he lived, and the beneficiary had no vested interest in the benefit. First. The authorities agree in holding that a member of a beneficial organization has no property in the benefit to be paid, but only the right to designate a recipient. Ben. Soc. v. Clendenin, 44 Md. 433; Arthur v. Ben. Ass'n, 29 Ohio St. 557; Ass'n v. McAuley, 2 Mackey, 70. Second. This being so it follows that Lewis W. Bunch could at any time revoke his first designation and make a new appointment, for powers are by their very nature revocable. Supreme Council, etc., v. Franke, 27 N.E. 86; 34 Ill.App. 651; Supreme Conclave v. Cappella, 41 F. 1; Supreme Council v. Morrison, 16 R. I. 468; 17 A. 57. Third. The right to change the beneficiary is not affected by the fact that the first beneficiary paid the assessments. Fisk v. Aid Union, 11 A. 84; Appeal of Beatty, 15 A. 861; 122 Pa. St. 428; Byrne v. Casey, 70 Tex. 247; 8 S.W. 38. (7) Possession of the certificate by the beneficiary makes no difference, for the status of the beneficiary is a mere expectancy and not property, nor has the beneficiary any vested interest. Brown v. Grand Lodge, 80 Iowa 287; 45 N.W. 884; Masonic Society v. Burkhart, 110 Ind. 189; Richmond v. Johnson, 28 Minn. 447; Splawn v. Chew, 60 Tex. 534. The certificate being to Lewis, "his executors, administrators or assigns," he could devise or assign it, because the contract, by its terms, recognizes such a right. Hamilton v. McQuillan, 82 Me. 204; Stoelker v. Thornton, 88 Ala. 241. (8) Lewis W. Bunch, having the right to change the designation of beneficiary and control the disposition of the benefit, did, by his last will, effectually change the beneficiary, divest David W. Bunch and his heirs of all rights (except the lien for assessments paid), and vested the title to the money in his executor, R. E. Anderson. First. Ordinarily policies of life insurance are assignable informally, and any act carrying out the intention of the insured and communicated to the insurer is sufficient in equity. Marcus v. Ins. Co., 68 N.Y. 625; Brown v. Grand Lodge, 80 Iowa 287; Schmidt v. I. K. P. Ass'n, 82 Iowa 304. Notice to the insurer is not necessary unless required by the terms of the contract. May on Insurance, secs. 388, 396. Second. It has been held that, even where the rules of the society require the change of beneficiary to be made in compliance with certain formalities, a change made in a different manner is effectual, the society not objecting. Manning v. A. O. U. W., 5 S.W. (Ky.) 385; Splawn v. Chew, 60 Tex. 532; Knights of Honor v. Watson, 64 N.H. 517. (9) At the time of the issue of the certificate in question David W. Bunch had no insurable interest in the life of Lewis W. Bunch, and, even taking the certificate as a policy of life insurance, the designation is illegal as against public policy. Morever, the certificate recites that the money is only payable to David on proof of interest. David had not in his character of brother an insurable interest in the life of David. "At common law the insurable interest in the life of another person must be a direct and definite pecuniary interest, and a person has not such an interest in the life of his wife or child, merely in the character of husband or parent." Ins. Co. v. Brant, 47 Mo. 424; Gambs v. Ins. Co., 50 Mo. 47; Chisholm v. Ins. Co., 52 Mo. 213. (10) Policies of life insurance cannot be assigned to one not having an insurable interest, because this would allow parties to obtain indirectly what is forbidden them to get directly. Cammack v. Lewis, 15 Wall. 643; Warnock v. Davis, 104 U.S. 775; Ins. Co. v. Hazzard, 41 Ind. 116. (11) If David had no insurable interest in the life of Lewis W. Bunch, and the designation of him as beneficiary was void, the fund, less the amount of assessments paid, goes to the personal representatives, the executor of Lewis. Rice v. Society, 15 N.E. 624; Rindge v. Society, 146 Mass. 286; Flynn v. Ben. Ass'n, 25 N.E. 716; Tateum v. Ross, 150 Mass. 440.

Harrison & Mahan and Horace D. Clark for respondent.

(1) It is conceded that in benefit societies the contract is in the certificate in connection with the constitution and by-laws. However, in the case at bar, a by-law seems to restrict the contract to the certificate. David W. Bunch, being a brother was one of a class named in the charter, and, hence, Lewis W. Bunch had full authority to designate him as beneficiary. David was an "heir" of Lewis. Elsey v. Relief Ass'n, 142 Mass. 224; Lamont v. Legion of Honor, 31 F. 177. Hence, when Lewis W. Bunch named David W. Bunch as beneficiary in the certificate dated March 19, 1879, it was both as "heir" and "devisee," and clearly within the terms of section 1, article 2, of plaintiff's constitution. (2) The appellant cannot raise this objection. McFarland v. Creath, 35 Mo.App. 124. Appellant Anderson does not claim the fund under the certificate on which it was deposited in court, but under certificate dated February 19, 1879. The fund was deposited in court on certificate dated March 19, 1879, and in doing so the association expressed a willingness that it should go to the beneficiaries named in the certificate. Under the pleadings there is no one to object but the association, and it consents. Knights of Honor v. Watson, 15 A. 125; Brown v. Mansur, 64 N.H. 39. (3) The right to change the contract by mutual consent is not derived from the charter and by-laws, and when the contract, charter and by-laws are silent the right to so change exists. The mutual cancellation of the certificate, dated February 19, 1879, in March, 1879; and the issuance of the certificate dated March 19, 1879, was a lawful exercise of power. Appellant has no right to the fund in court under and by virtue of the canceled certificate of February 19, 1879. Benefit Society v. Burkhart, 11 N.E. 449. (4) While Lewis W. Bunch never attempted to change the beneficiary in the certificate of membership under consideration and upon which the money was deposited; and while appellant, R. E. Anderson, in his pleadings only claims by will under the canceled certificate of February 19, 1879, as a matter of law Lewis W. Bunch did not have the right to change the beneficiary in the certificate of membership, dated March 19, 1879, by will. Block v. Mut. Ass'n, 52 Ark. 201; Van Bibber v. Van Bibber, 82 Ky. 347; Weisert v. Muehl, 81 Ky. 336; Holland v. Taylor, 12 N.E. 116; Mut. Ben. Ass'n v. Burkhart, 10 N.E. 81; Kentucky Co. v. Miller's Adm'r, 13 Bush, 494; Duvall v. Goodson, 79 Ky. 229; Mulroy v. Knights of Honor, 28 Mo.App. 471. (5) The question of "insurable interest" is not involved in this case. In the certificate of membership David W. Bunch was the "heir" and "devisee" of Lewis W. Bunch, and, therefore, clearly within the class named in the constitution or charter of the association. Freeman v. Ben. Society, 42 Hun, 252. (6) The insured himself made the contract with the insurer, and for this reason alone "insurable interest" is not involved. May on Insurance, 112; Coke on Life Insurance, p. 94, sec. 60; Vivar v. Knights of Pythias, 20 A. 41; Campbell v. Ins. Co., 98 Mass. 381; Olmstead v. Keyes, 85 N.Y. 593, 599; Scott v. Dickson, 108 Pa. St. 6. (7) Appellant Anderson did not in his interplea set up that the certificate is a "wagering contract." He did not make it an issue in the case. The trial...