Thomas v. Locomotive Engineers' Mutual Life & Accident Ins. Ass'n

• Decision Date: 14 July 1921
• Docket Number: 33542
• Parties: LEOTA W. THOMAS, Appellee, v. LOCOMOTIVE ENGINEERS' MUTUAL LIFE & ACCIDENT INSURANCE ASSOCIATION, Appellee; MARGARET BARR HOPKINS et al., Interveners, Appellants
• Court: Iowa Supreme Court

183 N.W. 628

191 Iowa 1152

LEOTA W. THOMAS, Appellee, v. LOCOMOTIVE ENGINEERS' MUTUAL LIFE & ACCIDENT INSURANCE ASSOCIATION, Appellee; MARGARET BARR HOPKINS et al., Interveners, Appellants

No. 33542

Supreme Court of Iowa, Des Moines

July 14, 1921

Appeal from Polk District Court.--GEORGE A. WILSON, Judge.

THE cause tried was to determine the ownership of the proceeds of a certificate issued by the defendant insurance association. The insurance association paid the money into court on interpleading for determination between plaintiff and interveners as to the ownership. Plaintiff claimed the fund as the original beneficiary. Intervener Margaret Barr Hopkins claimed the fund as the new beneficiary, alleging that insured had made a change of beneficiary from plaintiff to her; and also, she claimed the fund as the only heir at law of the insured. Intervener W. T. Barr, administrator of insured's estate, also claimed to be entitled to the insurance money. The facts appear in the opinion.--Reversed.

Reversed and remanded.

Lee & Garfield, Roy E. Cubbage, and Bert B. Welty, for appellants.

W. H McHenry, for appellee.

ARTHUR J. EVANS, C. J., WEAVER, STEVENS, and FAVILLE, JJ., concur.

OPINION

ARTHUR, J.

I.

There is practically no dispute concerning the facts involved in this case. Defendant Locomotive Engineers' Mutual Life & Accident Insurance Association was a corporation organized and existing under the laws of Ohio, engaged in business as a mutual benefit insurance company. On June 20, 1904, the defendant association issued a certificate of membership to J. F. Barr in the amount of $ 1,500. The policy provided:

"All payments or benefits that may accrue or become due by virtue of this policy shall be payable to Margaret Barr, sister, or his lawful heirs."

On May 24, 1905, insured, having, in the meantime, married plaintiff in this case, applied for a change of beneficiary, and a new certificate was issued to him, which provided that the payments were to be payable to "Leota W. Barr, wife, or the insured's lawful heirs." On April 30, 1908, the plaintiff and insured were granted a decree of divorce by the district court of Polk County, Iowa. On November 9, 1916, J. F. Barr died intestate, never having remarried, without issue, and leaving no parents surviving him. On the trial, plaintiff introduced evidence tending to show that Barr and she had become reconciled, and were engaged to be remarried at the time of Barr's death.

Defendant association interpleaded, admitting its liability on the policy sued on, and stated that it did not know to which of claimants the proceeds of the policy should be paid; that it had no claim on the proceeds of the certificate; and that it had paid the money to the clerk of the district court, to be awarded as the court, under the facts, should direct.

Fifteen days before the death of J. F. Barr, on October 25, 1916, and after Barr had undergone the first of two critical surgical operations, he wrote to the insurance secretary of the division to which he belonged, requesting that the beneficiary in his insurance policy be changed from his former wife, Leota W. Thomas, to his sister, Mrs. P. F. Hopkins, and stating that his former wife had the policy in her possession, and asking if he had to send in the policy, and enclosing $ 1.00 as fee for making the change. On October 29, 1916, the secretary of the insurance company, answering Barr's letter of October 25th, wrote Barr, acknowledging receipt of his letter and inclosure of $ 1.00, and telling Barr that it was necessary for him to return the old policy; that, if he could not get the old policy, it was necessary for him to make a request to him (Canney, secretary), explaining the reason Barr could not produce the old policy, so that Canney could send the letter of explanation with his request for the change desired. On October 31, 1916, 10 days before he died, in reply to the secretary's letter of October 29th, Barr wrote the secretary that his former wife had the old policy, and that he could not get it; that he was divorced from his former wife; and that he wanted the policy made out to his sister, Mrs. Margaret Barr Hopkins.

Testimony was introduced, showing that it required about 4 1/2 hours for a letter to go from Des Moines to Ottumwa, where the secretary had his office, and that it required about 36 hours for a letter to go from Des Moines to Cleveland, Ohio, the home office, and would take a little less than 36 hours for a letter to go from Ottumwa to Cleveland, Ohio.

Section 24 of the constitution and by-laws of the defendant provides as follows:

"Any member wishing to change his beneficiary in his policy or policies can do so by returning, through the insurance secretary of the division to which he belongs, the policy or policies in his possession, with a written request over his own signature, giving full name and relationship of present beneficiary or beneficiaries, and those of the new beneficiary or beneficiaries who must be in one of the classes designated in Section 1. Being unable to return old policy or policies, duplicates will be granted by member's making affidavit of the facts on a form supplied by the home office, executed before an officer authorized by law to administer oaths, and waiving all benefits or rights to himself and his beneficiaries named in former policy or policies held by him, such change to be effective from the date borne by the request, providing the new beneficiaries are in one of the classes designated in Section 1, for which a fee of 25 cents will be charged for each policy changed."

The information regarding loss of the policy was not furnished on the form provided by the home office. No blank form, as required by the by-laws of the defendant, on which to write the information as to the loss of the old policy, was ever furnished Mr. Barr, but information as to the loss of the policy was furnished in the letter written by Barr to the secretary, of date of October 31, 1916.

Section 1 of the by-laws of defendant order contained the following, regarding the payment of benefits:

"The object of this association is to pay to the 'family, heirs, relatives by blood, marriage or legal adoption, affianced wife, or to a person or persons dependent upon the members' of said association, stipulated amounts of $ 1,500, $ 3,000, and $ 4,500."

At the time of the adoption of the constitution and by-laws of the defendant, the above, contained within the single quotations, was an exact copy of the laws of the state of Ohio. This is shown by a portion of the by-laws, which reads as follows:

"Benefits must be limited to the classes named in Section 1 of the by-laws which is a verbatum copy of the laws of Ohio under which we are incorporated."

In 1911, the laws of Ohio were changed, so as to read as follows:

"The payment of death benefits shall be confined to the wife, husband, relative by blood to the fourth degree, father-in-law, mother-in-law, daughter-in-law, stepfather, stepmother, stepchildren, children by legal adoption, or to a person or persons dependent upon the members."

This change in the law of Ohio removed an affianced wife from the class of persons permitted to receive payment of death benefits.

Defendant association, on an interpleading, was ordered to and did pay into court the proceeds of the policy, with interest thereon, and on its motion was discharged from liability.

The Ohio court, in the case of Brotherhood of Railroad Trainmen v. Taylor, 29 Ohio C. C. 171, holds:

"The effect of divorce seems to be to terminate the relation of 'wife' under a mutual benefit certificate, so that if a wife is designated and she obtains a divorce, she loses her right to claim any part of the fund."

And: "Having secured a divorce subsequent to the issuance of the certificate, that fact precluded her from recovering benefits as wife or beneficiary." This is from the syllabus.

It further appears in evidence that the insured did not have the certificate in suit in his possession; that plaintiff, whom Barr charged with having in her possession the certificate, testified upon the trial that she did not have the policy, and that she did not know where the policy was, and did not know what became of it.

Plaintiff bases her right to the avails of the insurance policy which had been paid into court upon conclusions asserted: That J. F. Barr, insured, made no valid change of beneficiary from the plaintiff to Margaret Barr Hopkins, intervener; that there never was a change of beneficiary; that there was no waiver by defendant company; that, upon the death of J. F. Barr, she became vested in her right to the fund; that Barr never did the things which the contract required him to do in order to make change of beneficiary from his former wife to his sister; that, plaintiff being eligible, at the time the certificate was issued, to be a beneficiary under the certificate, she remains the beneficiary until the certificate has been changed in the manner provided in the by-laws of the order; that the rights of the parties are governed by the laws of the state of Iowa; that, by reason of a re-engagement of marriage, she became eligible to be a beneficiary; that a change of the policy, specifically making her the beneficiary, was not necessary, for the reason that she was the identical person named in the policy, which had never been changed with respect to beneficiary.

Intervener Margaret Barr Hopkins' claims to the avails of the policy of insurance are, and she asserts conclusions under the facts, as follows: That, by reason of the divorce, the plaintiff ceased to be the beneficiary under the policy that, after the divorce was granted, plaintiff and insured never became engaged to remarry;...