Williams v. Donough
| Decision Date | 04 February 1902 |
| Parties | WILLIAMS v. DONOUGH. |
| Court | Ohio Supreme Court |
Error to circuit court, Hamilton county.
Action by one Williams against Mrs. Donough. Judgment for plaintiff. The Supreme Council of Royal Arcanum was brought in by interpleader. From a judgment dismissing the pleadings plaintiff brings error. Reversed.
The plaintiff in error, who was plaintiff below, obtained a judgment before a justice of the peace against the defendant for $200 and costs. Proceedings in aid of execution, under section 6680, subds. 1-5, Rev. St., were taken to enforce the judgment against the defendant and Ivanhoe Council, No. 284 of the Royal Arcanum, located in the city of Cincinnati, and the Supreme Council of the Royal Arcanum, a corporation having its principal place of business in the city of Boston in the state of Massachusetts. On motion of the defendant the justice dismissed the proceeding in aid of execution, on the ground that the fund sought to be reached was exempted under section 3631-18, Rev. St. Appeal was then taken to the common pleas, and the Royal Arcanum brought in by interpleader. The fund was the proceeds of a membership certificate held by one John O. Donough, deceased husband of defendant. By consent the court fixed the interest of the defendant in the fund owing by the Arcanum at $1,350, and further ordered that $400 be retained and held to await the final disposition of the case, and the balance, including the remainder of the fund be distributed to the defendant and the children of the said deceased. Thereupon, on hearing, the court sustained the judgment of the justice, dismissing the proceedings and awarding judgment for defendant. This judgment was affirmed by the circuit court. Plaintiff brings error.
Syllabus by the Court
Section 3631-18, Rev. St., which provides that the benefits rendered by associations organized under the act of which that section is a part, entitled ‘ An act regulating fraternal beneficiary societies, orders, and associations,’ passed April 27, 1896 (92 Ohio Laws, 360), shall not be liable to be appropriated in any way to the debts of the members or beneficiaries, confers privileges upon some of a class not enjoyed by others of the same class, and is invalid, because in conflict with section 2 of article 1 of the constitution.
Ed. H. Williams, for plaintiff in error.
Byron M. Clendening, for defendant in error.
SPEAR, J. (after stating the facts).
The question, and the only one, brought to this court, is as to the exemption claimed by the defendant and allowed by the courts below. Is the statute allowing it constitutional? The Royal Arcanum is such a society or association as is defined by the act of April 27, 1896 (92 Ohio Laws, 360; sections 3631-11 to 3631-23, Rev. St., being a part of the general laws relating to life insurance companies), and, having complied with the requirements of said act, is entitled to conduct its business in the state. It is a fraternal beneficiary association, organized and carried on for the sole benefit of its members and their beneficiaries. The section providing exemption (3631-18) is as follows: ‘ The money or other benefit, charity, relief or aid to be paid, provided or rendered by any association authorized to do business under this act, shall not be liable to attachment by any trustee, garnishee, or other process, and shall not be seized, taken, appropriated or applied by any legal or equitable process; or by operation of law, to pay any debt or liability of a certificate holder, or of any beneficiary named in the certificate, or any person who may have any rights thereunder.’ In support of the contention that the attempted exemption is invalid, three propositions are advanced: First, that the debt due from the defendant to the plaintiff is property which by the constitution he has an inalienable right to acquire, possess, and protect, and the section quoted, if operative, takes the property of the creditor and transfers it to the debtor; second, that the act unlawfully discriminates in favor of certificate holders in these associations, or their beneficiaries, giving to them advantages and privileges which are not accorded to holders of certificates or policies of other associations of a similar character, viz., ordinary life companies, and other beneficial associations; and, third, that the section unlawfully discriminates in favor of these fraternal associations, by permitting them to offer advantages to members denied to ordinary life companies and to associations not organized under this act.
1. The debt, it is true, is, in a sense, property. But the realization of advantage from the debt, when not accorded voluntarily by the debtor, depends upon the will of the lawmaking power. It may provide adequate laws for the full collection of debts, or it may omit to do so. It has power, within limits of the constitution, to declare what property shall be exempt from the force of the collection laws, and when that power has been lawfully exercised the effect is to make the law a part of subsequently executed contracts. In the present case it does not appear that the debt was incurred prior to the passage of the act recited. This point, therefore, seems not well taken.
2. Does the section unlawfully discriminate in...
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