Derrington v. Conrad

The opinion of the court was delivered by

.Clark, J. :

The plaintiffs in error contend that the legislation of the grand lodge in 1889 resulted in the dissolution of the aid association, and the organization of a new association entirely independent of the former, and that any rights accruing by virtue of membership therein should be measured solely by the laws then adopted for its government, and that, although Mrs. Scholl might, by complying with certain prescribed conditions, become a member of the benefit association, any directions made by her under the certificate in the aid association would be of no valid*731ity after the issuance in her favor of a new certificate in the benefit association ; and that while she might at the time of making her application for membership, or at any subsequent period, while living, have designated a person to whom the fund arising by virtue of such membership should be paid, as no such designation was made, under the by-laws of the association the fund should be paid to her children ; and further, that even though Mrs. Scholl had in her lifetime directed that the fund should be paid to O. S. Conrad, such designation'would be of no avail, as he did not belong to the particular class of persons for whose benefit the association was formed, and had no insurable interest in the life of Mrs. Scholl.

We think from an examination of the record that no formal application for membership in the benefit association was required of Mrs. Scholl, as at the time of the issuance of her certificate she held a valid certificate of membership in the aid association, which, in conformity to the requirements of the by-laws, she surrendered to the secretary, and at the same time signified in writing her acceptance of the provisions of the laws governing the benefit association, and accompanied the same by an agreement to pay all subsequent assessments that might be made against the surrendered certificate. This seems to have been all that was necessary to be done in order to entitle her to a new certificate which, as provided in the by-laws, was to be issued “in lieu of the surrendered certificate,” and we are of the opinion that the legislation of the grand lodge above referred to, so far as it concerned members of the aid association who might desire certificates in the benefit association, and who should comply with the by-laws then adopted governing the issuance of certificates to such members, *732amounted only to a reorganization under a new name of the then existing association, and that when the benefit association issued its certificate to Mrs. Scholl it adopted entire her status in the aid association, and as she was not required under the by-laws to designate a beneficiary, any directions which she may have given before the surrender of her former certificate should be given full force and effect, in the' absence of a clear showing of an intention to change the beneficiary.

The written acceptance by Mrs. Scholl of the provisions of the by-laws of the benefit association, and her agreement to pay all assessments that might be levied against her certificate in the aid association, which was attached thereto, and which appears to have formed the basis for the issuance of the certificate of membership in the benefit association, had noted thereon the words “ assigned in favor of C. S. Conrad.” and the evidence shows that these words were on that document when it was executed. Mr. Bishop testified that Mrs. Scholl executed an assignment of her certificate in 1885, about two weeks prior to the death of her husband, and that he forwarded it to the secretary. The register of members of the aid association which was turned over to and formed a part of the records of the benefit association had noted therein that the beneficiary fund under Mrs. Scholl’s certificate was to be paid to “son-in-law, C. S. Conrad.” This and the written acceptance and agreement above mentioned constitute the entire record in the office of the association of any directions having been given by Mrs. Scholl that the beneficiary fund due under her certificate should be paid to any particular person. An objection is interposed by the plaintiffs in error to the consideration of this entry in *733the register of members from the fact that the words “son-in-law, C. S. Conrad” are written in pencil, while all other entries'on that particular page, save one, are written in ink. The other entry referred to is a similar one opposite the name of the husband of Mrs. Scholl, whose certificate was paid to C. S. Conrad. We think the record of the entries on the register of members above referred to was properly admitted in evidence in support of .the contention of the defendants in error that Mrs. Scholl had in her lifetime directed the association to pay the amount of her certificate to Conrad, and that that entry was competent evidence of such direction.

While the certificate was by its terms made payable “to the heir or heirs of deceased, or as directed by the by-laws,” there is nothing in the record to indicate that Mrs. Scholl desired that her heirs, as such, should be the beneficiaries, unless, as claimed by the -plaintiffs in error, her written acceptance upon the certificate itself should be construed as an acquiesence on her part in the designation thus made by the association. The document which served as an application for membership, and which is referred to in the certificate as forming a part thereof, contained no such direction, but, on the other hand, it contained upon its face a notation that, in our opinion, amounted to a statement that the certificate was being taken out for the benefit of C. S. Conrad, and, as the by-laws provided that the sum called for by the .certificate should be paid to such person or persons as the member may have directed while living, we think the acceptance of the certificate, as written by the association, ought not to be construed as an intention on the part of the member to change the beneficiary, but that, as the words ‘ ‘ to the heirs of the deceased or ’ ’ *734were inserted in the certificate without authority, any former directions given 'by her with reference to the payment should be held to govern as to the disposition of the fund. And it is .evident from the statements made to Mr. Bishop by Mrs. Scholl, after the issuance to her by the benefit association of the $1,500 certificate, that such was her understanding.and desire. The record shows that Mrs. Scholl delivered her certificate of membership in the aid association to Conrad in May, 1885 ; that the latter held it until it was surrendered to the benefit association and the new certificate was issued, in 1887; that soon thereafter Mrs. Scholl delivered to him the new certificate, which he held until the time of her death; that notices of assessments were sent to him by the secretary of the association, and that he paid all assessments levied against both certificates during all the time the latter were in his possession. We think there is sufficient competent evidence in the record to sustain the finding of the trial court that Mrs. Scholl in her lifetime directed that the proceeds of her certificate of membership should be paid to C. S. Conrad.

This leaves but one further question for our determination : Are the parties to this action bound by the directions given to the association by Mrs. Scholl? The statutes of this state provide that persons may associate themselves together for the purpose of forming'a mutual life association for the protection and relief of each other and for the payment of stipulated sums of money to the widows, orphans, heirs or relatives by consanguinity or affinity of the deceased members thereof. (Gen. Stat. 1889, ¶3450.) What the lawmaking power of the state declares may be lawfully done cannot be said to be contrary to public policy; and as a member of an association which is *735organized under the general law of the state may designate a relative by affinity as a beneficiary, we think the same rule should apply to members of an unincorporated fraternal association. While the declared object of the benefit association was to secure a provision for the families of deceased Odd Fellows,” this is only the statement of the general purpose, which is no doubt accomplished in most cases. But we find no restriction in the by-laws upon the right of a member to designate as beneficiary one who is not a member of the. family of the deceased Odd Fellow. If it had been intended that no one who did not belong to a particular class of persons could be named as beneficiary, it is evident the by-laws would have so declared ; but for aught that appears in this record the declared object of the association may be as fully accomplished by designating Conrad as the beneficiary, he being the husband of one of the children of the deceased Odd Fellow, W. B. Scholl, as would have resulted had Mrs. Conrad been named, or had no directions been given and the fund had been distributed equally among the surviving children of Mrs. Scholl. It is at least more than probable that Mrs. Conrad will derive some benefit from the payment of the fund to her husband; but at any rate we are ele'arly of the opinion that, as the absolute right was given to Mrs. Scholl to designate whomever she desired as beneficiary, and as she did name one who under the statute had an insurable interest in her life, such direction cannot be disregarded and the fund paid to some one else. (Highland v. Highland, 109 Ill. 366; Supreme Lodge v. Martin, 12 Ins. L. J. 628 ; Gentry v. Supreme Lodge, 23 Fed. Rep. 718 ; Brown v. Brown, 27 N. Y. Sup. 129; Mitchell v. Grand Lodge, *73670 Iowa, 360 ; Walter v. O. F. Mut. Ben. Soc., 44 N. W. Rep. 57; Maneely v. K. of B., 115 Pa. St. 305.)

After a careful examination of the record and the authorities, we have reached the conclusion that the judgment should be affirmed, and it is so ordered.

Gilkeson, P. J., concurring. Garver, J., not sitting, having been of counsel.