Urick v. Western Travelers Accident Association

• Decision Date: 10 April 1908
• Docket Number: 15,086
• Citation: 116 N.W. 48,81 Neb. 327
• Parties: AGNES URICK, APPELLEE, v. WESTERN TRAVELERS ACCIDENT ASSOCIATION, APPELLANT
• Court: Nebraska Supreme Court

116 N.W. 48

81 Neb. 327

AGNES URICK, APPELLEE, v. WESTERN TRAVELERS ACCIDENT ASSOCIATION, APPELLANT

No. 15,086

Supreme Court of Nebraska

April 10, 1908

APPEAL from the district court for Douglas county: WILLIS G. SEARS JUDGE. Affirmed.

AFFIRMED.

Brome & Burnett, for appellant.

Jacob Fawcett and McIndoe & Thurman, contra.

EPPERSON C. DUFFIE and GOOD, CC., concur.

OPINION

EPPERSON, C. J.

November 14, 1903, defendant, a mutual insurance company, issued to Ray P. Brock the following contract or policy of insurance "No. 12,792. $ 5,000. The Western Travelers Accident Association, Omaha, Neb. This certifies that Ray P. Brock is, while in good standing, a member of the Western Travelers Accident Association, and is entitled to all its benefits under the provisions on the back of this certificate, and named in the constitution and by-laws, and subject to the warranties contained in the application for membership. In witness whereof, we have here into affixed our official signatures and impressed the corporate seal of the association this 17th day of Nov., A. D. 1903. (Signed) A. L. Sheetz, Secretary. (Corporate seal.) (Signed) E. S. Streeter, President." The provisions upon the back of said contract, which are relevant to the present inquiry, are the following: "Payments will be paid under this certificate for all injuries received through external, violent, and accidental means, and resulting in death, loss of both hands, both feet, or both eyes--$ 5,000. * * * Membership certificate. The Western Travelers Accident Association, Omaha, Neb. For traveling men. No. 12,792. Issued to Ray P. Brock, Columbus, Kan. Beneficiary, Agnes Brock, wife."

Said Brock, while a member in good standing of the defendant company, and on August 17, 1904, received accidental injuries from which he died the next day. Plaintiff, who was the wife of assured, and was named as beneficiary in the application for membership and in the indorsement made upon the contract, sued for and recovered judgment for the full amount named in said contract of insurance. Defendant admits a liability of $ 1,000 only under the contract, and further denies the plaintiff's right to recover any sum, alleging that the son of assured and plaintiff had been substituted as beneficiary. The defendant company operates under the provisions of section 6631 et seq., Ann. St. 1903. Section 6638 provides: "The beneficiary under said certificate shall be the member insured, a husband, wife, relative, dependent, or legatee of such insured member, nor shall any such certificate issued be assigned or willed to any person of a class other than herein designated. Any member of any corporation, association or society operating under this act shall have the right at any time with the consent of such corporation, association, or society to designate a new and different beneficiary without requiring the consent of such beneficiary." The by-laws, adopted by the defendant company, contain the following provision: "The beneficiary under any certificate may be changed upon application of member, in writing, to the secretary." No change was ever made in the certificate of insurance; but on July 25, 1904, the assured addressed a letter to the defendant herein which is as follows: "Gentlemen: Kindly change the beneficiary in my accident policy from Agnes Brock, my wife, to Sam S. Brock, my son, and send policy or notice of change to Eagleville, Mo., care E. E. Moore. Yours truly, (Signed) Ray P. Brock, Columbus, Kansas." Upon receipt of the above letter, and on July 27, 1904, the defendant company, acting through an employee, wrote to the assured as follows: "Mr. Ray P. Brock, Eagleville, Mo., care E. E. Moore. Dear Sir: Your letter of the 25th inst., requesting a change in the beneficiary under your certificate of membership, is received. In reply we would request that you fill up the blank on the back of your certificate provided for this change, and forward to us, when we will indorse the change, and return to you. Yours truly, Western Trav. Accident Ass'n, A. E. T., Cashier." The above correspondence is all the evidence pertaining to the alleged change of the beneficiary. The certificate was found among Brock's papers after his death. Upon the conclusion of the trial the defendant requested the court to direct the jury to return a verdict in its favor. This request was refused, and the court's ruling thereon is the first assignment of error presented for our determination.

In the construction of contracts of insurance made by mutual insurance companies it is a well-established rule that the statutes under which the company is organized, its constitution and by-laws, and the application for membership are to be considered as a part of the contract. It is apparent from the reading of the statute above quoted that the change of the beneficiaries is not left entirely with the assured, but the insurance company is concerned in the changing of the beneficiaries, and that it must consent before the change becomes a part of the contract for insurance. It was apparently the intention of the legislature that the assured should have the power in the first instance to name, and thereafter the right to change, the beneficiary of his contract to any one included within the several classes prescribed by the statute, and undoubtedly the insurance company would have no right to refuse to grant a request unequivocally made in accordance with the statute and the rules of the company, so long as such rules are not contrary to or inconsistent with the statute, which in all instances must prevail. Upon reading the statute and the by-laws of the defendant company the conclusion is irresistible that to effectually substitute one beneficiary for another an application must be made therefor by the member in writing, and, if approved by the company, they should consent thereto, and thereby complete a change of the contract by the substitution of a different beneficiary. The association, regardless of the provisions of its by-laws quoted, would have the right to refuse its consent to the substitution of a beneficiary not dependent upon or related to the assured. It would have the right to require the application for change to be sufficiently authenticated that the genuineness thereof should appear reasonably certain. That its consent should be obtained is a reasonable provision, and necessary for its own protection, for, otherwise, it would probably be subjected to numerous suits by adversary claimants. It is true that a beneficiary has no vested interest in a mutual policy of insurance and is not a party to the contract, and cannot legally prevent a substitution of another. But neither has the substituted beneficiary a vested interest, and a contemplated beneficiary has not even a contingent interest until substituted or named in some contract made by the insurer and the assured. Brock's letter to the company was an application for the substitution of his son instead of his wife as beneficiary. There is no evidence that the defendant ever consented thereto. Its answer to his letter must be taken as a refusal to consent to the change until he should comply with the suggestion there made.

In Counsman v. Modern Woodmen of America, 69 Neb. 710 96 N.W. 672, the court had before it an attempted change of the beneficiaries under an insurance policy. The contract in that case, as it was found to exist, provided that "no change in the beneficiary shall be of effect until the delivery of the new certificate, and until then the old certificate shall be held in force." There an application for a change was made in the manner provided, but it was not approved until after the death of the assured. As will be observed from the reading of the opinion in that case, two beneficiaries were named in the certificate. The assured desired to change both. Under the contract or rules of the company one of the changes was prohibited. For that reason the insurance company refused to make any change whatever. The litigation was, in fact, between the parties not affected by the attempted illegal change, but who were interested in the other fund. In the opinion it is said: "The learned trial court seems to have regarded the matter of beneficiary as wholly within the disposal of the assured. We cannot so regard it. It is a matter of agreement between the assured and the association." In Freund v. Freund, 75 N.E. 925 (218 Ill. 189), it was held: "A New York statute (laws 1892, p. 2015, ch. 690, sec. 211) requiring the consent of the insurance company to a change of beneficiary by insured becomes a part of a New York policy issued while such statute is in force, and is controlling on the subject covered thereby, although the policy is silent concerning the same." The statute of New York under which the insurance company was organized provided that "membership in any such corporation, association or society shall give to any member thereof the right, at any time, with the consent of such corporation, association or society, to make a change in his payee or payees, or beneficiary or beneficiaries, without requiring the consent of such payee or beneficiaries." The similarity of this statute with our own is apparent. The contract there involved contained a provision that the assured may, at any time, change the beneficiary by written notice to the company, accompanied by the policy, such change to take effect on...