Eves v. Sovereign Camp, Woodmen of the World

CAULFIELD, J.

(after stating the facts). — Plaintiff has raised a number of questions upon appeal but they all finally resolve themselves into one: Did Theodore Eves have the power to change the beneficiary in his benefit certificate so as to substitute Adelia Kerls for the plaintiff? If he did, then the judgment of the trial court should be affirmed as to plaintiff. If he did not. then the court erred in its conclusions of law and the judgment should be reversed and the cause remanded.

It is clear that -without some statutory provision to the contrary Theodore Eves had the power mentioned.

In the case of Grand Lodge A. O. U. W. v. McFadden, 213 Mo. at page 284, 111 S. W. 1172, the court said:

“It is the universal law that a beneficiary named in a fraternal benefit certificate has no .vested interest therein (and cases cited). The designation of .the beneficiary in a certificate issued by a fraternal beneficiary association is but a present expression of the member’s will, revocable at any time, and unless there is to be 'found, either in the laws of the state where the association was incorporated or in its charter or by-laws or in the terms of the certificate itself, some provision prohibiting or restraining the right of the member to change the name of the beneficiary, he may do so with the same freedom as he may change the name of a legatee in his will by the making of a new will before the first one takes effect; provided, that where the rules and regulations of the association provide a specific method of changing the name of the beneficiary, such rules and regulations must be substantially complied with in order to effect a new designation. The laws of the association read in evidence expressly provide for the mak-' ing of a new designation.”

In the case at bar there does not appear to be found “either in the laws of the state where the association was incorporated or in its charter or by-laws or in the terms of the certificate itself,” any “provisions prohibiting or restraining the right of the member to change the name of the beneficiary.” The rules and regulations of the association providing the method of changing the name have been complied with, and “the laws of the association read in evidence expressly provide for the making of a new designation.”

Plaintiff’s counsel concedes the foregoing, but asserts that having issued the certificate in question, while the Act of 1897 was in force, without having qualified to do business under it, tbe defendant association was not exempt from, but was subject to, the provisions of the general insurance statutes relating to old line insurance policies just the same as if it were an ordinary insurance company and the benefit certificate an ordinary insurance policy, citing Gruwell v. Knights and Ladies of Security, 126 Mo. App. 501, 104 S. W. 884, and other cases. He then asserts that by section 7895 of the Eevised Statutes of 1899, now section 6944, Eevised Statutes of 1909, plaintiff became vested at the time of its issuance with an absolute, unconditional, indefeasible interest in the benefit certificate and all moneys represented thereby, which could not be divested or affected by the member, Theodore Eves, changing the beneficiary. Upon the proper answer to this last assertion this case depends.

If said section affects this case it will do so in the form it was in when this certificate issued, August 26, 1897. The amendments changing the section to its present form are not retrospective in their operation. [Blum v. New York Life Ins. Co., 197 Mo. 514, 523, 95 S. W. 317.] Said section was then section 5854, Eevised Statutes 1889 as follows:

“Section 5854. Policy for Benefit of Married Women. — Any policy of insurance heretofore or hereafter made by any insurance company on the life of any person, expressed to be for the benefit of any married woman, whether the same be effected by herself or by her husband, or by any third person in her behalf, shall inure to her separate use and benefit, and that of her children, if any, independently of her husband and of his creditors and representatives, and also independently of such third person effecting- the same in her behalf, his creditors and representatives; and a trustee may be appointed by the circuit court for the county in which such married woman resides, to hold and manage the interest of any married woman in such policy, or the proceeds thereof. In the event of the death of such married woman before her husband, the said policy shall inure to the children of such marriage, to the exclusion of creditors and executors and administrators of said husband, any technical words or phrases in the policy to the contrary notwithstanding.”

Now as to an ordinary life insurance policy, where no power of divestiture is reserved, there is no doubt-that under this statute the wife and children upon the issue of the policy would have a vested right therein. [Blum v. New York Life Ins. Co., supra.]

And there would seem no reason for applying any ‘different rule as to a beneficiary certificate where no power of divestiture is reserved to the member by the constitution, or by the laws of the association or by the terms of the certificate. [Bacon, Benefit Societies and Life Insurance (3 Ed.), sec. 304, vol. 1.]

In the case at bar, the right to change the beneficiary is given by the constitution and laws of the order and forms part of the contract under which plaintiff must claim. The right to reserve such power of divestiture is complete and unrestricted unless the statute forbids it. It would seem then that the case resolves itself into this: Does the statute relied upon by plaintiff make the policy or certificate inure to the wife as it is written, that is, subject to such power of divestiture or substitution as may be contained in the contract, or does the statute deny the right to reserve such power? In determining this question it is our duty to uphold the contract if we can do so and still give effect to the law, as courts will not abridge the freedom of contract without cause. [Price v. Connecticut Mutual Life Ins. Co., 48 Mo. App. 281, 295].

Now when we turn to the section under discussion we do not find any language calculated to abridge the freedom of the insurer and insured to make their contract of insurance as they see fit; neither does plaintiff’s counsel attempt to guide us to any such language. The language used is, “Any policy of insurance heretofore or hereafter made by any insurance company on the life of any person, expressed to be for the benefit of any married woman . . . shall inure to her separate use and benefit.” It is the policy, as it may have been or may be made by the insurance company, that inures. There is no attempt disclosed to vary the terms of the contract of insurance or to derogate from the right to contract freely with regard to the beneficiary. On the contrary, before the policy inures it must be expressed to be for the benefit of the married woman. That is, the insured and insurer must first of their own free will make their contract so that it will be expressed to be for her benefit. They may omit her altogether if they desire; or they may give her an interest only in common with others. Their poiver in that respect is left general and unrestricted. Being so, it includes the power to make a qualified appointment and to reserve the power to revoke and to substitute. [Am. and Eng. Ency. of LaAV (2 Ed.), vol. 22, p. 1138; Bacon, section 290, 291.]

It is significant, as bearing upon the proper construction to be given this section of the statutes, that out of all the decisions holding unanimously that a beneficiary in a fraternal beneficiary certificate may be changed at the will of the member, no case has been brought to our attention placing the decision upon the ground that the association had been exempted by statute from the operation of the general insurance laws. Nor out of all the very numerous cases holding that the beneficiary has a vested interest in an old line policy, lias our attention been called to any so holding, where the policy reserved the right to change the beneficiary.

And our Supreme Court has said that the doctrine that the beneficiary. in a benefit certificate may be changed is predicated upon the form of the benefit certificate. [Westerman v. Supreme Lodge K. of P., 196 Mo. l. c. 737, 94 S. W. 470.] In that case the court used this somewhat significant language:

“It is clear, under the well settled law of this state, that plaintiff had no vested fight in the benefit certificate in suit at the time of the passage of the Act of 1897. This was expressly decided in Masonic Ben. Assn. v. Bunch, 109 Mo. 560, 19 S. W. 25, and in that case the certificate involved was issued by a foreign benevolent association prior to the Act of 1881, which is referred to in the case of Kern v. Legion of Honor, 167 Mo. 471, 67 S. W. 252, and which authorized fraternal associations to do business in this state and exempted them from the general insurance laws. Hence, we take it that the doctrine announced in the Bunch case was predicated upon the form of the benefit certificate.”

We have also found that the following Missouri cases, which state the proposition that the beneficiary in an ordinary life insurance policy takes a vested, indefeasible interest, state it with the qualification, “where no power of divestiture is reserved:” Blum v. New York Life Ins. Co., 197 Mo. 513, 523, 95 S. W. 317; United States Casualty Co. v. Kacer, 169 Mo. 301, 313, 315, 69 S. W. 370; Diehm v. North Western Mut. Life Ins. Co., 129 Mo. App. 256, 261, 108 S. W. 139.

We do not regard the cases cited by the plaintiff and holding that the suicide statute is binding against fraternal associations which had not qualified under the Act of 1897 as being any guide to us in this case. That statute provides that “it shall be no defense that the insured committed suicide, . . . and any stipulation in the policy to the contrary shall be void.” The section we are considering does not provide that it shall be no defense that the insured has changed the beneficiary and that any reservation in the policy of the right to make .such change shall be void. There is no discoverable analogy between the sections.

We have no hesitation in holding that this statute has left the parties free to contract as they pleased in regard to the beneficiary and the quality of her interest and that the policy inured to her only as it was made, in this case subject to the right of the member to change the beneficiary. It follows that the plaintiffs interest' and that of Yernetta Eves were extinguished by the changes of beneficiaries effected by the member and that the court was right in holding that Adelia Kerls alone was entitled at the time the member died.

As to the question raised by the cross-appeal of interpleader Kerls, the taxation of costs in this proceeding was a matter within the sound discretion of the trial court, with the exercise of which we see no-reason to interfere. [Supreme Council Legion of Honor v. Nidelet, 85 Mo. App. 283, 284.]

The judgment of the circuit court is affirmed.

Reynolds, P. J., and Norloni, J., concur.