Supreme Lodge Knights & Ladies of Honor v. Menkhausen

Mr. Justice Scott

delivered the opinion of the court:

The beneficiary named in a benefit certificate who feloniously takes the life of the insured cannot recover from the fraternal beneficiary society, and it is now urged that public policy also requires us to hold that in such a case there cari be no recovery by any person whomsoever against such a society, and that under such circumstances not only is the certificate void, but the obligation of the society to pay to any one whomsoever is canceled and rendered absolutely inoperative. The cases relied upon by appellant are of two classes: First, where the insured was murdered by the beneficiary and suit was brought by the criminal or some one claiming through him; and second, where the insured was executed in pursuance of the sentence of a court of competent jurisdiction for a crime committed by him or her. Neither class of cases is in point here. The only reason in favor of appellant’s contention that seems to us of weight is found in the fact that the beneficiary might be incited to commit murder by the fact that if unable to collect the benefit himself it would be payable to some other person or persons in whose welfare he was interested. Human experience teaches that those willing to commit murder and assume the risk of punishment for the benefit of others are so few in number that .consideration thereof becomes well-nigh inconsequential. But even were it otherwise, if the rule suggested by appellant were established, it is perceived that the society would then profit by the murder, and an incentive be created for the destruction of the life of the insured that the interest of the insurer might be advanced. The contract between the society and the insured contained no provision absolving the society from liability in the event that she was murdered by the beneficiary, and public policy does not require us to read such a condition into the agreement. If it did, it would also require us to hold that the beneficiary could not recover on the policy if the insured was murdered by another acting independently of and against the desire of the beneficiary, because it is within the realm of possibility that such other, without the connivance or knowledge of the beneficiary, might commit the crime solely for the purpose of enriching the latter. If societies of the character of appellant desire to be protected from such contingency, that object must be accomplished by a condition to that effect written into their contracts, failing which the law will not absolve them from liability. (Cleaver v. Mutual Reserve Fund Life Ass. 1 Q. B. 147; Schmidt v. Northern Life Ass. 112 Iowa, 41.) In the absence of a contract to that effect, public policy will not permit the society to appropriate unto itself the fund which it has agreed to pay, merely because the life of the insured has been unlawfully taken.

It is suggested, however, that this certificate was payable alone to Gustav Menkhausen, and that no recovery can be had thereon except by him or by those claiming through him, and that as he cannot recover no one can recover on the certificate. We do not regard this as a suit upon the certificate. A careful examination of the declaration leads us to conclude that it is a suit to recover the benefit, §1000, which the appellant undertook, by its constitution and by-laws, to pay to the person, within certain classes, who should be designated by Elizabeth Menkhausen, and that the action is upon the obligation of appellant as evidenced by its constitution and by-laws, and not upon the certificate. These rules or laws of this organization recite its purpose to be the establishment of a relief fund, from which, upon the death of a member, a benefit shall be paid to the person designated by the member in the certificate,. ajad that such benefit may be made payable by the member to the wife or husband, the children, grandchildren, parents, certain other persons of the whole or half blood, or the next of kin who would be distributees of the personal estate of the member, in the order above named.

By the act of 1887, which was in force when the certificate in question was issued, it was provided, in substance, that societies of the class to which appellant belongs might be organized for the purpose of furnishing benefits, upon the death of a member, “to the widow, heirs, relatives, legal representatives or the designated beneficiaries of such deceased member.” (Laws of 1887, sec. 1, p. 205.) By the act of 1893, which became effective a few months after the issuance of this certificate, it was provided, so far as material here, that payment of death benefits should be made only to the “families, heirs, blood relations, affianced husband or affianced wife of, or to persons dependent upon, the member.” (Hurd’s Stat. 1895, chap. 73, par. 258.) It will be observed that by the spirit of each of these three enactments the children of the deceased would stand next in order after the husband or wife.

“Upon the death of a member, where the person claiming to be his designated beneficiary is outside of the classes eligible as beneficiaries of his insurance, the member’s heirs-at-law, who are within such classes, are entitled to the insurance. There being no selection of a beneficiary authorized to take, the fund goes to them. Palmer v. Welch, 132 Ill. 141; Alexander v. Parker, 144 id. 355.” Baldwin v. Begley, 185 Ill. 180.

We think the correct view to take is, that Gustav Menkhausen, by his act in taking the life of his wife, placed himself outside the classes from among whom she might designate a beneficiary, and he could not thereafter take the fund, or any part thereof, either as the beneficiary named in the certificate or as heir or heir-at-law of his wife. The situation, so far as his rights and those of appellees and appellant are concerned, we think is precisely the same as though, after the issuance of this certificate, he had been divorced from Elizabeth Menkhausen and she had thereafter died without having any alteration made in the certificate. Under such circumstances he would have no interest in the certificate, but the proceeds thereof would be payable to the heirs of the insured, nothing to the contrary appearing in the certificate, the constitution and by-laws of the order or the laws of the State under which it operates. Tyler v. Odd Fellows’ Mutual Relief Ass. 145 Mass. 134; Schonfield v. Turner, 75 Texas, 324; Order of Railiuay Conductors v. Foster, 55 Mo. App. 186.

In Schmidt v. Northern Life Ass. supra, and in Cleaver v. Mutual Reserve Fund Life Ass. supra, growing out of the Maybrick murder, the same question was presented as is now before us. In both cases it was held that the fact that the beneficiary had murdered the insured did not cancel the obligation of the insurer, and in both cases the administrator of the insured was allowed to recover on the theory that the insurer held'the fund in trust for the estate of the deceased; and in the case at bar it is argued that if there could be a recovery at all, it must, under the authority of these cases, be in the name of the administrator of the estate of Elizabeth Menkhausen. It is very evident that neither the constitution and bylaws of appellant nor the laws of this State contemplate the payment of a benefit of this character to the administrator of the member. The purpose is to pay it directly to the beneficiary, whoever that may be, without the intervention of administration; and where, as here, the la6w determines the persons who are entitled to the fund, the suit is properly brought in the names of such persons, and in this case there is no occasion for a resort to equity.

Rule 15 of this court indicates the manner in which a brief and argument should be prepared for presentation here. Counsel on both sides of this controversy have failed to observe that rule. A compliance therewith is materially helpful in the consideration of causes in this court. It should be followed in every instance.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.