Wooten v. Grand United Order of Odd Fellows

• Decision Date: 11 September 1918
• Docket Number: 23.
• Parties: WOOTEN v. GRAND UNITED ORDER OF ODD FELLOWS.
• Court: North Carolina Supreme Court

96 S.E. 654

176 N.C. 52

WOOTEN v. GRAND UNITED ORDER OF ODD FELLOWS.

No. 23.

Supreme Court of North Carolina

September 11, 1918

Appeal from Superior Court, Beaufort County; Connor, Judge.

Action by Sofrony Wooten against the Grand United Order of Odd Fellows. Judgment for defendant, and plaintiff appeals. No error.

It was competent for the secretary of a local lodge to state what the insured said to him when he was asked by the insured to write out a request to the lodge for a change of the beneficiary, and the issuance of a new certificate, and to sign it for him.

The plaintiff sued to recover the amount of a life policy issued to Thomas Whitaker, by the defendant, and payable, at first to his sister, the plaintiff, as beneficiary, and afterwards changed so as to be payable to his wife, Colorado Whitaker under a clause reserving the right to change the beneficiary. The right to make this change was not disputed by the plaintiff, but she contends that the change was not actually or legally, made, so as to make it effective, before the death of Thomas Whitaker. The latter was a member of the Stone Square Lodge No. 1688, at Washington, N. C., where he lived, and the policy was issued by the District Grand Lodge and was made subject to its laws, rules, and regulations, one of which was that:

"The beneficiary may be changed on the face of the policy by returning it to the endowment office, certifying change desired and enclosing ten cents."

The evidence tends to show that, a short time before his death, Thomas Whitaker applied in writing for a change of the beneficiary from his sister, Sofrony Wooten, to his wife, Colorado Whitaker, whom he had married since the policy was issued. This application was duly received by the Grand Lodge, and as there was some objection to the form, though substantially correct, another was made in the form prescribed for the purpose, and was also received by the lodge before his death, and accepted as a full compliance with the rules and regulations; and, after the death of the insured, Thomas Whitaker, the amount of the policy was paid to his widow, who was the new beneficiary. The policy had been lost, and the change on its face could not be made at the time of the application, but on October 21, 1916, a new policy was issued by the lodge. This was after the death of Thomas Whitaker, which occurred on September 18, 1916. The "Laws, Rules and Regulations" of the lodge provide that:

"A duplicate policy may be secured in case of loss of policy, by making application signed by the member, and countersigned by the N. G. and P. S., with lodge seal attached, upon payment of ten cents, which application shall be attached to the policy when so issued."

Thomas Whitaker, in his application asking for a change of the beneficiary, also requested that a new policy be issued to his wife. It appeared that the change of beneficiary was made in the office of the secretary of the Grand Lodge on September, 1916. The policy register, at the time of Thomas Whitaker's death, showed that Sofrony Wooten was the beneficiary in the policy, but that an application for change of beneficiary had been made, and that at that time only one policy had been issued. There were objections by the plaintiff to certain evidence of the witnesses Daniel Roberson and P. A. Richardson, respectively secretaries of the local lodge and the Grand Lodge, and a motion to strike out the testimony of the latter, which were overruled. They will be noticed hereafter.

The plaintiff tendered these issues:

"(1) Did the defendant, prior to death of Thos. Whitaker, reissue a policy upon life of Thos. Whitaker, making Colorado Whitaker the beneficiary thereof?

(2) If so, was the said change of beneficiary in said policy authorized by application of Thos. Whitaker."

The court submitted issues upon which the jury rendered the following verdict:

"(1) Did Thomas Whitaker, the insured, prior to his death direct the secretary of the local lodge, Daniel Roberson, to sign an application for him and arrange that the beneficiary under his insurance policy should be changed from Sofrony Wooten, his sister, to Colorado Whitaker, his wife? Answer: Yes.

(2) Was the original policy then misplaced or lost so that the insured, Thomas Whitaker, could not surrender it with his application for charge of beneficiary? Answer: Yes.

(3) Did the insurance company make the change of beneficiary, as requested, prior to the death of Thomas Whitaker, waiving the requirement for the surrender of the original policy? Answer: Yes." Judgment for defendant, and appeal by plaintiff.

John G. Tooly, of Belhaven, and Harry McMullan, of Washington, N. C., for appellant.

Small, MacLean, Bragaw & Rodman, of Washington, N. C., for appellee.

WALKER, J. (after stating the facts as above).

It is now considered that an insurance company may make reasonable rules and regulations by which the insured may change the beneficiary named in the policy of insurance, or his certificate in the case of benefit societies, and that such rules and regulations become a part of the contract. Where the policy or rule of the company, or society, provides that such a change may be made in a particular way, the method prescribed should be followed; but if the insured has done substantially what is required of him, or what he is able to do, to effect a change of beneficiary, and all that remains to be done are ministerial acts of the association, the change will take effect, though the formal details are not completed before the death of the insured. It must be understood, however, that some affirmative act on the part of the insured to change the beneficiary is required, as his mere unexecuted intention will not suffice to work such a change. When the right to substitute another beneficiary exists by express reservation, or otherwise, the insured, or member of a benefit society, may, without the consent of the original beneficiary, and subject only to the rules of the association, change his beneficiary at will. Pollock v. Household of Ruth, 150 N.C. 211, 63 S.E. 940. This is true, because the beneficiary whose right under the policy, or certificate, may thus be taken away, has only a contingent interest therein, which will not vest until the death of the insured. The revocation of his appointment as beneficiary does not require his consent, as the power to displace him is vested solely in the insured, provided he proceeds in substantial compliance with the rules of the association, which may be waived by the company, or society, where they are made for its benefit or protection.

The general rule is that the right to a policy of insurance, at least to one of the ordinary character, and to the money which may become due under it, vests immediately, upon its being issued, in the person who is named in it as beneficiary, and that this interest, being vested, cannot be transferred by the insured to any other person (Central National Bank v. Hume, 128 U.S. 195, 9 S.Ct. 41, 32 L.Ed. 370) without his consent. This does not hold true however, when the contract of insurance provides for a change of the beneficiary by the insured, or such a right arises in some other way; for in such a case the right of the beneficiary vests conditionally only, and is subject to be defeated by the terms of the very contract, or instrument, which created it, and is destroyed by the execution of the reserved power. These principles, we take it, are well settled by the highest authority and great weight of judicial opinion. 4 Cooley's Briefs on the Law of Insurance, pars. 3762-3772; Nally v. Nally, 74 Ga. 669, 58 Am. Rep. 458; McGowan v. Supreme Court of Ind., Order of Foresters, 104 Wis. 173, 80 N.W. 603; Schoenan v. Grand Lodge, 85 Minn. 349, 88 N.W. 999; Sanburn v. Black, 67 N.H. 537, 35 A. 942; St. L. Pol. Ass'n v. Strode, 103 Mo.App. 694, 77 S.W. 1091; Luhrs v. Luhrs, 123 N.Y. 367, 25 N.E. 388, 9 L. R. A. 534, 20 Am. St. Rep. 754; Donnelly v. Burnham, 86 App.Div. by Hun, page 226, 83 N.Y.S. 659; (affirmed in same case, 177 N.Y. 546, 69 N.E. 1122); Hancock Mut. L. Ins. Co. v. White, 20 R.I. 457, 40 A. 5. From these cases, which very strongly and, we may say, conclusively, support the defendant's contention, it seems to be now well settled that one who is insured, with the right to change the beneficiary, and who wishes to exercise this right, must make the change in the manner required by his policy and the rules of the association, and that any material deviation from this course will render the attempted change ineffective. It is equally well settled that there are cases where literal and exact conformity with the requirements of the policy may be excused. The subject was fully considered in McGowan v. Supreme Court of Ind. Order of Foresters, supra, where it was said that Supreme Conclave v. Cappella, 41 F. 1, exhaustively reviewed this question, in its entire phase, and the court there reached the conclusion that there were three exceptions to the rule of exact compliance with the terms of the policy or certificate: First, where the society has waived strict compliance by issuing a new certificate without insisting on the performance of all the intermediate steps; second, where, by loss of the first certificate without fault, its surrender becomes impossible, a court of equity will not require an impossibility, but will treat the change as made if the insured has taken all the other necessary steps and done all in his power to make the change; third, where the insured has pursued the course required by the policy and the rules of the association, and done all in his power to make the change, but before the new certificate is actually issued he dies, a court of equity will decree that to be done which...