Supreme Lodge v. Reyman

Mr. Presidins Justice Smith

delivered the opinion of the court.

The assignments of eryor present the questions whether Denmark Lodge Mo. 112, Knights of Pythias, at the time it was appointed beneficiary in the Madsen benefit certificate, was a lawful beneficiary, qualified to receive the benefit therein provided for, or not. And if it was a lawful beneficiary, what effect did the subsequently enacted bylaws of the Supreme Lodge, or the Acts of 1893 and 1895 of the Illinois Legislature, or the Act of Congress of 1894, have upon the certificate and the power and right of Denmark Lodge to receive the benefits under the certificate, at the death of Madsen?

When the benefit certificate in which the Denmark Lodge was designated as beneficiary was issued to Madsen, the by-laws of the Supreme Lodge, Knights of Pythias, expressly provided: “ That an applicant may name as beneficiary his betrothed, his subordinate lodge, his Endowment Rank Section, or a Brother Knight.”

It appears from the record that the Supreme Lodge, Knights of Pythias, is a secret benevolent society. Denmark Lodge Mo. 112, Knights of Pythias, the beneficiary named in the certificate in question, is a subordinate lodge of the Supreme Lodge, through the Grand Lodge from which it receives its charter. It is organized for the purpose of initiating applicants into the Order of the Knights of Pythias, and to confer the ranks of Page, Esquire and Knight, and assisting the sick brothers and their families. It has no connection with the Endowment Rank Section which is the insurance branch or section of the Supreme Lodge.

At the time of the appointment of the Denmark Lodge as beneficiary in the certificate, the laws of the Supreme Lodge expressly authorized such appointment. The laws of Illinois then in force did not prohibit the appointment, so far as we are advised, but on the contrary permitted the funds of fraternal beneficiary societies to be paid to strangers or persons in no way related to or connected with the member. We are of the opinion that Denmark Lodge at the time of the issuing of the certificate in question was a lawful beneficiary, and qualified to receive the benefit on the authority of the following cases and the reasoning of the courts therein, which it is not necessary here to repeat: The Bloomington Mutual Benefit Ass’n v. Blue, 120 Ill. 121; Martin v. Stubbings, 126 id. 387; Bacon v. Brotherhood of Railroad Brakemen, 46 Minn. 303; Finch v. The Grand Grove of U. A. O. of Druids, 60 Minn. 308; Delaney v. Delaney, 175 Ill. 187.

The next question is, did the amendment of the by-laws of the Supreme Lodge made subsequently to the date of the certificate, or the Acts of the Legislature of Illinois passed in 1893 and 1895, or the Act of Congress of 1894, disqualify the Denmark Lodge to receive the benefits under the certificate on the death of Madsen ?

The portion of the by-law which authorized the appointment of a subordinate lodge, Endowment Rank Section, or a brother knight as beneficiary was repealed in 1892. The by-law in force at the time of Madsen’s death- provided that, “each applicant for membership, and each applicant for re-admission in the Endowment Rank shall designate in his application some person or persons, related to or dependent upon him for support, as hereinafter provided, to whom the benefit shall be paid when due.”

We think it is evident from the language used that the amended .by-law was not intended to have any effect upon existing certificates. It was intended to apply and by its terms applies to “ each applicant for membership and each . applicant for re-admission in the Endowment Rank ” whose application was made after the amendment went into effect, and therefore the certificate and the beneficiary therein named were in no wise affected by the amendment to the by-law.

As to the effect of the Act of June 22,1893, Voigt v. Kersten, 164 Ill. 314, is decisive. At page 320 it is said in that case: “It would seem that the construction of the Act passed in June, 1893, giving it the effect to destroy that right of appointing a beneficiary or naming another beneficiary, which existed in favor of the deceased under his contract prior to the passage of the act, would be to give the act a retrospective effect and destroy the obligation of the contract entered into between the deceased and the complainant. It is a recognized "rule in the construction of statutes that they should be so construed as to give them a prospective operation only, and they should be allowed to operate retrospectively only where the legislative intention to give them, such operation is clear and undoubted. Benton v. Brotherhood of Railroad Brakemen, 146 Ill. 570. * * * "We think that the right to make this change was one of the considerations entering into the contract at the time that the deceased obtained his certificate from the complainant, and that it was a material right, and one that could not be taken away by the legislature, and we do not think that the legislature intended, by the Act of June 1893, to affect certificates of insurance issued prior thereto.” The case of Delaney v. Delaney, supra, is also in point. And to the same effect are Moore v. Guarantee Fund Life Society, 178 Ill. 202, and Peterson v. Gibson, 191 id. 365.

By the Act of 1895, a clause prohibiting the transfer of benefits by will or assignment to any other persons than those named in the Act of 1893 was eliminated. In our opinion it had no effect upon the certificate or beneficiary therein named. For the reasons above expressed the Act of Congress of 1894 did not disqualify Denmark Lodge as beneficiary under the certificate.

It is contended by appellees in support of the decree that the Denmark Lodge was merely the nominal beneficiary and attempted to secure the proceeds of the benefit certificate and distribute the same contrary to the constitution and by-laws of the order and the statutes of the state, and • that the Supreme Lodge and its Endowment Rank had legal notice thereof.

This contention is not tenable upon the facts shown by the evidence. The Denmark Lodge either paid or caused to be paid Madsen’s board, lodging, medicine bills, lodge dues to several societies, and insurance assessments in accordance with agreements entered into with Madsen. This gave the Denmark Lodge such a vested interest in the certificate as a court of equity will protect and enforce, al-though the certificate was not assignable at law. Supreme Council Royal Arcanum v. Tracy, 169 Ill. 123; McGrew v. McGrew, 190 id. 604; Jarvis v. Binkley, 206 id. 541.

- It is insisted that Madsen by the paper dated December 18, 1901, called his last will, changed the beneficiaries in his certificate to the devisees named in the paper, in violation of the by-laws of the order, and therefore the persons named in the so-called will took nothing thereby.

This paper or document was never proved up and probated as and for Madsen’s will. It was filed with Denmark Lodge simply and has remained there. Whether it amounts to a will, or what its legal effect is, cannot be material here, for it did not in any way legally change the certificate or the beneficiary under the certificate. That the Denmark Lodge followed the directions contained in the document and paid the debts of Madsen which it had obligated itself" to do, did not and could not give the document the legal effect contended for by appellees. The lodge had the legal right to use the money due at the time' of Madsen’s death on the certificate in question for the purposes shown by the evidence; and in thus disbursing the money it was not acting as the agent of the Supreme Lodge. When that body paid the amount of the certificate to Denmark Lodge, the beneficiary therein named, it . had discharged its obligation under the certificate, and it had no further duty to discharge in connection with the matter. Consequently' it cannot be held accountable to complainants, appellees, in this proceeding for accounting for the money called for by the certificate. It follows that the original bill and the cross-bill do not present grounds for equitable relief.

The decree of the Circuit Court is erroneous and is reversed and the cause is remanded with directions to dismiss the bill and cross-bills.

Reversed and remanded.