Van Bibber's Adm'r v. Van Bibber

• Decision Date: 11 December 1884
• Citation: 6 Ky.L.Rptr. 393,82 Ky. 347
• Parties: Van Bibber's Adm'r, & c., v. Van Bibber.
• Court: Kentucky Court of Appeals

82 Ky. 347

6 Ky.L.Rptr. 393

Van Bibber's Adm'r, & c., v. Van Bibber.

Court of Appeals of Kentucky.

December 11, 1884

O. V B. became a member of the Presbyterian Mutual Assurance Fund designating his brother, H. V. B., as the beneficiary. The latter died March 7, 1880. On March 11, 1880, O. V. B designated his wife as the party entitled to the insurance.

Held --That under the charter of the association, O. V. B., after his brother's death, had the right to nominate his wife as the party entitled to the insurance money, and that after his death the money must be paid to her.

APPEAL FROM LOUISVILLE CHANCERY COURT.

B. W. DUKE AND J. B. BASKIN FOR APPELLANTS.

The change upon the books of the Presbyterian Mutual Assurance Fund is in violation of their charter, and void. The association could not, under their charter, make or permit the change from the brother of the assured to his wife without authority, and the assured, having no control over or right in the policy, could not direct such a change (Robinson v. Duvall, MS. opinion, September, 1880; Masonic Ins. Co. v. Miller's adm'r, 13 Bush, 494; Goodson v. Duvall, MS. opinion; Cooley Const. Lim.)

WARD & MCAFEE FOR APPELLEE.

1. Appellee is entitled to the insurance fund in controversy.

2. O. Van Bibber had the right, under the charter of the association, to designate his wife after the death of his brother.

3. O Van Bibber could not pledge the certificate of insurance to appellant to secure a debt. (Acts of 1878, page 200; Duvall v. Gordon, MS. opinion, September, 1880; 13 Bush, 494.)

OPINION

HOLT JUDGE:

On November 5, 1879, O. Van Bibber became a member of the corporation known as the " Presbyterian Mutual Assurance Fund."

His application for membership directed that " the sum due at my death I desire to be paid to my brother, Harvey Van Bibber; " while the certificate of membership provided that the benefit of not exceeding $2,000 should, upon his death and the surrender of the certificate, be paid " to such person or persons as he may designate, by will or upon the books of this corporation."

By an entry upon the company's books also, Harvey Van Bibber was designated as the beneficiary. He died on March 7, 1880. On March 11, 1880, O. Van Bibber, by letter, requested the company to enter his wife's name upon its books as the beneficiary, and it did so, and furnished him a certificate of the fact. He died on May 26, 1880, intestate and childless.

The benefit is now claimed by his widow, E. L. Van Bibber, by the administrator of Harvey Van Bibber and also by his sister, he having died unmarried and intestate.

The said administrator also seeks, in the event he is not entitled to the entire fund, to recover so much of it as will pay what he alleges was owing his intestate by O. Van Bibber upon the ground that the insurance had been effected to secure it, and was in pledge for it.

The fourth section of the company's charter provides that " the object of this corporation is to create and provide a beneficiary fund for the families or relations of deceased members, or for the benefit of members in sickness."

The sixth section says:

" Upon the decease of any member of this Association, the fund to which his family is entitled shall be paid as may be designated in the application for membership; this being changed by death, or otherwise impossible, it shall go--

First. To the widow and infant children.

Second. To his mother and sisters.

Third. To his father and brothers.

Fourth. To his grandchildren.

Fifth. To his legal heirs.

Section 7. The fund due deceased members shall not be subject to the claims of creditors, and shall not be reached by attachment, garnishment or other process of law, so as to divert from the family of such members."

The above are all the provisions of the charter that bear upon the questions presented by this appeal.

A beneficiary under an insurance policy must have an insurable interest in the life of the insured. It is well settled, however, that a creditor has such an interest in the life of the debtor, while upon the other hand, a mere wager policy is void. (Bliss on Life Ins., section 27; Conn. M. L. Ins. Co. v. Schaefer, 94 United States, 457.)

In this instance, however, there was no power to insure for the benefit of a creditor, or to pledge the policy to secure a debt.

The seventh section supra forbids it. The Legislature created the corporation for purely benevolent purposes. The object in view was the benefit of the family of the deceased member; and it would be defeated if the insurance fund were liable for the debts of the insured.

It would be idle to permit a pledge of the policy when the contract could not be enforced, or to give a right and withhold the remedy. (Ky. M. M. L. Ins. Co., & c., v Miller's...