Gibson v. Moore

STATEMENT BY THE COURT.

This suit was instituted in the circuit court of Crittenden County by Emma J. Moore against the Royal Neighbors of America seeking recovery of the proceeds of an insurance policy issued by the Royal Neighbors of America on the 9th day of April, 1925, insuring the life of Myrtle Moore, in which policy of insurance Emma J. Moore was designated as beneficiary. It was alleged that Myrtle Moore died on the 10th day of May, 1932, at which time said policy of insurance was in full force. The defendant, Royal Neighbors of America, answered the complaint of Emma J. Moore. On July 14, 1932, an amendment to the complaint was filed in which it was *Page 898 alleged that one S. O. Gibson was claiming some interest in the insurance policy, the exact nature of which was unknown to plaintiff. Thereupon S. O. Gibson was made a party defendant, and on September 5 filed his answer to the complaint in which he claimed the proceeds of the policy.

The defendant, Royal Neighbors of America, answered plaintiff's complaint by admitting that it was and is a fraternal benefit society, and that on or about March 5, 1925, it issued its reserve benefit plan certificate to Myrtle Moore, payable in the event of death to Emma Josephine Moore; that said certificate was issued subject to the bylaws of said association; that thereafter, without any change of beneficiary, proof of the death of said Myrtle Moore was submitted to it and by it accepted for the sum of one thousand dollars ($1,000); that it offers to pay into the registry of the court said sum of one thousand dollars ($1,000) in satisfaction of liability. Further answering, it was alleged by the society that S. O. Gibson was claiming some interest in the proceeds of said certificate, but denies that any request for change of beneficiary to S. O. Gibson was ever received by it; that in reference to change of beneficiaries it exhibits 212 and 217 of the by-laws of the society, which read as follows:

"Section 212. Beneficiary — Change of. — Any member in good standing who desires to make a change of his or her beneficiary or beneficiaries shall fill out the surrender clause on the back of his or her old benefit certificate designating therein the change desired, and sign the same in presence of two witnesses, one of whom may be any camp recorder or a notary public or any other person authorized by law to administer oaths. The execution of such surrender clause shall also be attested by such recorder or may be acknowledged before the notary or any such other person. The said benefit certificate with said request indorsed thereon shall be delivered to the recorder of the camp where membership is held, or forwarded direct to the supreme recorder together with a fee of fifty cents. When the certificate and fee are *Page 899 delivered to the recorder, she shall immediately forward the same together with the fee to the supreme recorder. The supreme recorder, whether she has received the benefit certificate and fee from the recorder or direct from the member, shall thereon issue a substitute benefit certificate payable to the beneficiary or beneficiaries named in said surrender clause, subject to the provisions of Section 210 thereof. No change in the designation of beneficiaries shall be effected until a substitute certificate has been written by the supreme recorder and within the lifetime of the member, and until such time the old certificate shall be in force. Any attempt by a member to change the payee of the benefits under his or her benefit certificate by will or other testamentary document, or by contract, agreement, assignment, or otherwise than by strict compliance with the provisions of this section, shall be absolutely null and void. Any agreement entered into by a member not to change his or her beneficiary shall be null and void.

"Section 217. Certificate Lost — Substitute therefor. — in case a benefit certificate is lost, destroyed or beyond the member's control, such member on forms furnished by the supreme recorder, may waive all claims thereunder, designate the same or some other beneficiary or beneficiaries, the same or smaller amount of benefits in said waiver request that a substitute benefit certificate be issued. Such waiver shall be signed by the member in the presence of two witnesses, one of whom may be any camp, recorder or a notary public. The execution of such waiver shall be attested by such recorder or may be acknowledged before the notary or any other person authorized by law to administer oaths. The said waiver shall be delivered to the recorder of the camp where membership is held or forwarded direct to the supreme recorder together with a fee of 50 cents. When the waiver and fee are delivered to the camp recorder, she shall immediately forward same together with the fee to the supreme recorder. Upon receipt of such waiver and fee, the supreme recorder shall issue a substitute benefit certificate in the amount and payable to the beneficiary *Page 900 or beneficiaries, subject to the provisions of Section 210 of these bylaws, requested in said waiver. No change in the designation of beneficiary or beneficiaries in a substituted certificate shall be effected until such substitute certificate shall have been written by the supreme recorder during the lifetime of the member, and until such time the provisions of the old certificate in relation to the designation of beneficiary or beneficiaries shall remain in force."

After the filing of the answer aforesaid, S. O. Gibson moved that the cause be transferred from the circuit court to the chancery court, which was granted.

The testimony introduced on the trial of the case in the chancery court was to the following effect:

At the time the policy of insurance was executed, the insured was a single and unmarried person and her mother, Emma J. Moore, was designated as beneficiary. In 1931 the insured married appellant, S. O. Gibson. Sometime in February, 1932, S. O. Gibson requested a change of the beneficiary by making an oral application to the secretary of the local lodge, Mrs. Eberhart. The testimony about this request is in conflict, Gibson saying that his wife was with him when the request was made, but this is denied by Mrs. Eberhart. Gibson further testified that his wife wrote a letter to Mrs. Eberhart requesting a change of beneficiary from her mother to her husband, but the receipt of this letter was denied by Mrs. Eberhart. The testimony shows that some effort was made to change the beneficiary by Mrs. Eberhart, and some communications passed between her and the society in reference thereto.

The chancellor found from the testimony introduced that no change of beneficiary was effected by reason of the negotiations in this regard when measured by the constitution and bylaws of the society. (after stating the facts). Section 6074 of Crawford Moses' Digest in effect provides, that beneficiaries may be changed in accordance with *Page 901 laws, rules or regulations of the society. It is perfectly evident that any change of beneficiary in a policy of insurance issued by a fraternal benefit society must be done in substantial compliance with the constitution and bylaws of such society.

It is perfectly evident that 212 of the bylaws of the society was not substantially complied with. In effect this bylaw provides that the "surrender clause on the back of her benefit certificate, designating therein the change desired, and sign the same in the presence of two witnesses, one of whom may be any camp recorder or a notary public or any other person authorized by law to administer oaths." It is not even contended that the surrender clause on this certificate was executed by the insured.

In behalf of appellant, it is insisted that the purported letter written by the insured requesting the change of beneficiary was a substantial compliance with the constitution and bylaws of the society. The case of Robinson v. Robinson, 121 Ark. 276, 181 S.W. 300, is quoted from in support of this position. The pertinent quotation in this opinion is "the established rule and the one adopted in this State is that the change of beneficiary cannot be made by the insured, unless there is a substantial compliance with the bylaws and regulations of the society."

No substantial compliance with the bylaws of the society in effecting a change of beneficiary is shown in the instant case. The purported letter written by the insured to the secretary of the local lodge was not acknowledged before any officer and was not signed by the requisite witnesses. The fact is the secretary of the subordinate lodge positively denies receiving any such letter. The rule in the Robinson case is sound, but the facts in the instant case do not come within it.

Again, 212 of the bylaws further provides "no change in the designation of beneficiaries shall be effected until a substitute certificate has been written by the supreme recorder and within the lifetime of the member, and until such time the old certificate shall be in force." *Page 902 The rule quoted above further provides: "Any attempt by a member to change the payee of the benefits under her benefit certificate by will or other testamentary document, or by contract, agreement, assignment, or otherwise than by strict compliance with the provisions of this section, shall be absolutely null and void." According to the record, as we understand it, the only substantial thing done by the insured in reference to effecting a change of beneficiary was to pay the fifty cent fee demanded therefor. This cannot be construed as a substantial compliance with the bylaws referred to. The chancellor was eminently correct in holding that no change of beneficiary had been effected.

It is next insisted, on behalf of appellant, that the trial court erred in refusing to grant him a continuance of the cause. It is said that S. O. Gibson is a poor man and had no money with which to employ counsel and pay the expense of litigation. This is not cause for a continuance under our statute. It suffices to say that the trial court did not abuse its discretion in denying the continuance.

No error appearing, the judgment is affirmed.