Pollock v. . Household of Ruth

Hoke, R, after stating the case: It is very generally recognized that in these mutual benefit societies and fraternal orders, carrying an insurance feature as an incident of membership, a member holding a policy of insurance may designate anyone whom he may select as beneficiary, unless this right of selection is confined or restricted by some provision of law or some rule *213 of tbe company affecting tbe contract. Bacon on Benefit Societies and Life Insurance (3d Ed.), Yol. 1, sec. 246. In tbe present case neither tbe policy nor tbe rules of tbe order seem to contain any stipulation affecting tbe matter, and we* find no statutory provision of tbe kind suggested, for it will not be contended tbat tbe mere reference to fraternal societies contained in tbe Revisal, sec. 4794, amounts to sucb a restriction. Cooley’s Briefs on tbe Law of Insurance, Yol. 1, page 797. Tbis position in no way conflicts witb the principle wbicb obtains witb us, tbat to justify the taking' out of a life insurance policy there must exist an insurable interest. Sucb a principle is recognized in cases where one takes out a policy on the life of another, but does not apply when the insured takes out' a, policy on bis own life and pays or arranges for the payment of the premium himself and on bis own account (Albert v. Insurance Co., 122 N. C., 92; Union Fraternal League v. Walton, 109 Ga., 1), and unless such an arrangement is a mere “cloak or cover for a wagering transaction.” 29 Cyc., 116. It is further established, certainly by the weight of authority, tbat, in the absence of some restriction of the kind indicated, some inhibitory provision of the general law or the charter, or some rule of the company affecting the matter, a member bolding a policy or benefit certificate may change the beneficiary at bis election. If certain formalities are required, they must, as a rule, be observed, but unless restrained, as indicated, the member may change the beneficiary at will, and the last bolder properly designated will be entitled to the fund. Niblack on Benefit Societies, pp. 331-409; Bacon on Benefit Societies and Life Insurance, Yol. 1, 291a, 308. In this last reference (section 291a) tbe author says: “Beneficiaries have no property in benefit, but a mere expectancy. Under tbe contract entered into between a - beneficiary society and tbe member, or wherever tbe right to change tbe beneficiary is reserved -in tbe contract, tbe designated beneficiary has no property in tbe benefit to be paid, but a mere expectancy. Tbe Supreme Court of California has thus stated tbe rule: ‘The beneficiary named in tbe certificate has no interest or property therein tbat her heirs could succeed to. Her interest was a mere *214 expectancy of an incomplete gift. It was revocable at tbe will of tbe insured and could not ripen into a right until bis death. Her right under the certificate was not unlike that of an heir apparent, and that is not to be deemed an interest of any kind.’ The same doctrine was fully set forth by the Court of Errors and Appeals of New Jersey, where the court said: 'Ey the terms of such contracts (those of benefit societies) the beneficiary may be changed by the mere will of "the member and without the beneficiary’s consent. In such case the right of the beneficiary is not property, but a mere expectancy, dependent on the will of the member to whom the certificate is issued. For this reason the beneficiary’s interest in the certificate and contract evidenced thereby differs totally from the interest of a beneficiary named in an ordinary life insurance policy containing no provision for the designation of a new beneficiary. The cases, so far as I can discover, are agreed upon this doctrine.’ This principle is now so well settled that no further authorities need be cited.” There may be, and not infrequently are, facts and circumstances existing which would raise an equity in the original beneficiary and which would justify and require a court 'to interfere for his protection; but the authorities are very generally to the effect that the mere payment of the premiums and dues for a time, without more, and in the absence of a binding contract that the beneficiaries then designated should receive the proceeds of the policy or the benefits arising therefrom, would not support such a claim. Thus, in 29 Cyc., pp. 128-129, the author says: “An equity in favor of the original beneficiary precluding the substitution of another in his place may rest on a contract between him and the member, based on a sufficient consideration, by which he is to receive the benefits. Thus, if a member designates „a beneficiary or, having designated a beneficiary, delivers the certificate to him, on an agreement that he shall receive,the benefits in consideration of past advances made by him, or present' or future advances, or in consideration of his promise-to pay dues and assessments, which promise is fulfilled, the member cannot thereafter substitute a different person as beneficiary. However, the fact that the person originally designated incurs expenses with reference to the transaction on *215 tbe faitb of tbe designation, as by paying dues and assessments to keep tbe certificate alive, does not prevent tbe substitution of a new beneficiary in bis place, in tbe absence of a contract tbat be is to receive tbe benefits, nor does tbe fact tbat tbe member delivers tbe certificate to tbe beneficiary as a gift preclude bim from subsequently substituting a new beneficiary.” An application of tbe principles stated fully justifies tbe court in entering tbe judgment of nonsuit. There is no provision of law, general or special, and-no rule of tbe company or stipulation of tbe policy wbicb forbids tbe change tbat was made in tbe present case; and there are no facts or circumstances wbicb show tbat tbe payments by tbe original beneficiaries were made under any contract or agreement with tbe insured tbat would give plaintiffs any right to tbe relief wbicb they seek. There is, therefore, no error appearing, and tbe judgment below is Affirmed.