Widows Fund of Sudan Temple v. Umphlett ( 1957 )

99 S.E.2d 791 (1957) 246 N.C. 555

The WIDOWS FUND OF SUDAN TEMPLE
v.
Charlotte Nixon UMPHLETT and Daniel Charles Umphlett.

No. 24.

Supreme Court of North Carolina.

September 18, 1957.

Walter G. Edwards, Hertford, for defendant appellant.

C. R. Holmes, Hertford, for defendant appellee.

RODMAN, Justice.

When the findings of fact are compared with the solemn admissions in the answer of appellant, it develops that the only facts found by the court and not admitted by appellant in her answer are the findings that she and her husband were estranged in November 1955 and the request for change of beneficiary was in writing.

We deem the finding that insured and his wife were estranged immaterial to the decision of the case; hence, any exception to the finding in that respect, even if erroneous, is harmless.

The statement in the case on appeal that the pleadings "and other documents" were submitted to the court suffices to support the finding that the request for change of beneficiary was in writing since the documents are not included in the record, and we are therefore unable to determine what the "other documents" do show. The statement in the case on appeal that the evidence submitted tended to establish certain facts is not a statement that the evidence did not suffice to establish additional facts found by the court. The burden of establishing error is on appellant. Hodges v. Malone & Co., 235 N.C. 512, 70 S.E.2d 478; Shelly v. Grainger, 204 N.C. 488, 168 S.E. 736. If it should be conceded that the finding was not supported by the evidence, we would not regard it as material to the decision of this case.

Plaintiff was meticulous in its compliance with the rule of impartiality required of an interpleader. Supreme Lodge Knights of Honor v. Selby, 153 N.C. 203, 69 S.E. 51.

The right of the insured to change the beneficiary, in conformity with the requirements of plaintiff's bylaws, is not challenged. Not only was the right granted by the bylaws, it was declared and guaranteed by statute. G.S. § 58-281. Hence anyone named as beneficiary had, during the life of the insured, no vested right in the certificate. It was a mere expectancy. Parker v. Potter, 200 N.C. 348, 157 S.E. 68; Wooten v. Grand United Order of Odd Fellows, 176 N.C. 52, 96 S.E. 654; Walser v. Gate City Life & Health Insurance Co., 175 N.C. 350, 95 S.E. 542; Pollock v. Household of Ruth, 150 N.C. 211, 63 S.E. 940; 29 Am.Jur. 952.

The statute defines the class who may be beneficiaries in a certificate issued by a fraternal benefit society. G.S. § 58-281. An attempt to name a beneficiary outside of the class limited by the statute confers no right on the person so designated. National Council, Junior Order United American Mechanics v. Tate, 212 N.C. 305, 193 S.E. 397, 113 A.L.R. 1514; Equitable Trust Co. v. Widows' Fund, 207 N.C. 534, 177 S.E. 799; Andrews v. Most Worshipful Grand Lodge, etc., of Masons, 189 N.C. 697, 128 S.E. 4; Applebaum v. Order of United Commercial Travelers, 171 N.C. 435, 88 S.E. 722.

Appellee is within the class permitted by statute. He is not within the class which the insured had, under the bylaws, and unconditional right to name as his beneficiary. The statute expressly grants to the insurer the right to circumscribe the statutory permissive class. Having the right to circumscribe, the insurer of course had the right to make its limitation absolute or it could, as in this case, fix a permissive class of beneficiaries. Manifestly the person originally named as beneficiary had no right to prohibit the insurer from selecting one in the permissive class. The provision with respect to obtaining consent of the board of directors to designate someone other than wife, mother, sister, or issue was inserted in the bylaws not for the benefit of the original beneficiary but for the insurer. The provision requiring a request for change of beneficiary to be in writing was likewise for the protection of the insurer. It had a right to waive provisions inserted for its benefit and prescribe the conditions under which the consent of the board of directors would be given. Wooten v. Grand United Order of Odd Fellows, supra; Swygert v. Durham Life Insurance Company, 229 S.C. 199, 92 S.E.2d 478, 479; Arrington v. Grand Lodge, 5 Cir., 21 F.2d 914; Home Mut. Ben. Ass'n v. Rowland, 155 Ark. 450, 244 S.W. 719, 28 A.L.R. 86, and cases cited in the annotation, pages 95-96; Cantala v. Travelers Ins. Co., Sup., 107 N.Y.S.2d 24; 29 Am.Jur. 991.

It has been broadly stated in many cases that an insurer waives compliance with policy provisions inserted for its benefit by interpleading the original and substituted beneficiary and payment of the sum owing into court. Equitable Life Insurance Company v. Fourman, Ohio App., 135 N.E.2d 878; Metropolitan Life Ins. Co. v. Sandstrand, 78 R.I. 457, 82 A.2d 863; Mutual Life Ins. Co. of New York v. Patterson, D.C., 15 F. Supp. 759; 19 A.L.R. 2d 108, and cases cited in § 42. As pointed out in McDonald v. McDonald, 212 Ala. 137, 102 So. 38, 36 A.L.R. 761, this does not impair any vested right which the original beneficiary had. It is but a recognition that insurer had, in the lifetime of the insured, consented to a change in its contract between them.

The court, in New York Life Insurance Company v. Lawson, D.C., 134 F. Supp. 63, 66, speaking with respect to the effect to be given to an interplea, said: "The clear wishes of a dead woman should be respected, especially where a corporate insurer has by the nature of the institution of its own litigation insulated itself from a duality of liability."

The undisputed facts in this case permit us to decide it without determining the effect of an interplea by an insurer when, as here, it has acted on the request of the insured and issued to him a certificate or policy naming a new beneficiary.

We are not dealing with a case where the beneficiary is beyond the statutory permitted class, Equitable Trust Co. v. Widows' Fund, supra, nor a case where the bylaws positively restrict the class. National Council, Junior Order United American Mechanics v. Tate, supra.

Here the insured had the right to change the beneficiary by the express provisions of the bylaws. The certificates are issued by the secretary. A certificate was issued to insured, naming appellee as beneficiary, by the secretary, who thought he was acting in good faith. The insurer so asserts. Insured held the certificate some six weeks before his death. He was never notified that the secretary acted without authority. Although it had the opportunity both before and since the death of the insured, insurer has not denied that the secretary was in fact lacking in authority. It does not seek to void the contract. It does not allege that it is invalid. It has never asserted that the contract is invalid. It merely alleges: "* * * the Secretary of the Widows Fund, without a meeting of the Board of Directors and without notification of the Board of Directors, but acting in good faith * * *" issued the certificate. It might well be that in factual situations similar to the case presented the board of directors had expressly authorized the secretary to act for them and to permit the naming of the father as beneficiary. It is not suggested that the board of directors were not, during the lifetime of insured, informed of the act of the secretary.

If appellee had brought suit on the certificate issued to him and insurer had admitted the issuance of the certificate, insurer would have to plead facts sufficient to establish its invalidity. The allegations of the complaint would not have sufficed to defeat such an action by appellee. His rights cannot be diminished by changing the position of insurer from defendant to plaintiff. Wright v. Mercury Ins. Co., 244 N.C. 361, 93 S.E.2d 438; Tolbert v. Mutual Benefit Life Ins. Co., 236 N.C. 416, 72 S.E.2d 915; Strigas v. Durham Life Ins. Co., 236 N.C. 734, 73 S.E.2d 788; Griffin v. United Services Life Ins. Co., 225 N.C. 684, 36 S.E.2d 225; Green v. Inter-Ocean Casualty Co., 203 N.C. 767, 167 S.E. 38; 46 C.J.S. Insurance § 1635, pages 1020-1021.

Affirmed.