Block v. Valley Mutual Insurance

Hemingway, J. One Charles B. Guthrie obtained a policy of insurance upon his life from the Valley Mutual Insurance-Company. It undertook, upon the conditions therein named,, to pay to Mrs. Martha A. Guthrie, James M. Harvey and Alice Guthrie, $1000 within ninety days after proof of the death of' Charles B. Subsequently Charles B. and Mrs. Martha A. Guthrie assigned the policy to the plaintiffs, who thereafter-paid all dues and premiums as they matured, according to its terms. Upon the death of the said Charles B. the plaintiffs.. claimed the amount due upon the policy by virtue of the • assignment, and the beneficiaries therein named by virtue of the-provisions of the policy. The court found that the plaintiffs acquired, by the assignment, the interest of Martha A. Guthrie, and no more. That 'they were entitled to recover her interest in the fund and three-fourths of what they had advanced in®keeping the policy alive, while James M., Harvey and Alice Guthrie were entitled to recover the balance. Judgment was rendered accordingly. As grounds for reversal the appellants urge : First — That the insurance company is not a regular insurance company, but a mutual benefit company. Second — That the policy of an insurance company differs from the certificate of a mutual benefit company in this, that the rights of the beneficiary in the one are vested upon the •issuance of the policy, while those rights in the other are subject to be divested at any time until the death of the insured, by the substitution of another beneficiary. The record contains no part of the company’s charter or articles of association, and but one clause of its by-laws. It is • as follows : “ The object of this association shall be for the purpose of •mutually associating together a number of individuals into an .agreement, whereby the survivors mutually contribute for the ¡.relief of the representatives, legal heirs or assignees of those of their number whom death may strike down.” The policy sued on contains no reference to any other purpose than one of insurance, and provides the ordinary safe •guards against the acceptance of bad risks, as well as against the continuance of risks accepted, unless the stipulated pay■>ments upon it are promptly made as they mature. These payments include “annual dues” and “mortality assessments,” and a failure to pay either for thirty days after call, effects a cancellation of the policy. It contains this clause, upon which appellant relies especially: “ This certificate may be assigned, transferred, or set over .¡by and with the consent of the association, granted by its ..president or secretary.” The record discloses nothing further as to the character of the company. Upon this the learned counsel for appellants say, that they assume that it will be conceded to be a mutual benefit society. What feature is disclosed that does not belong to a mutual insurance company? The first by-law, in making" a general declaration of its purpose, declares that it is to afford relief; but also declares that the relief will be given to “the representatives, legal heirs or assigns of those of their number whom death may strike down,” and this is exactly what insurance companies are required to do. Yet this is not benevolence, for it is undertaken for a stipulated profit, the continued payment of which is a continuing condition to its existence... If any other character of benevolence was contemplated by the company the record doe.s not disclose it. Certain it is, that. the policy exhibited contains no intimation of its existence. We have no statute distinguishing between insurance companies and benefit companies with insurance features. Such statutes have been enacted in other States; they define the properties of the latter that entitle them to privileges or exemptions not accorded the former. The distinguishing feature generally is, that they contemplate gain, while these contemplate benevolence only. Within the scope of their benevolence is included, with many fraternal objects, the providing of a fund to be paid upon the death of members, in.which this is regarded as but an incident of the main object. Subjected to the tests made in those States, we have found no' decision which leads us to’think that the contract sued upon would be viewed in any other light anywhere than as an ordinary insurance policy. It exactly fits the definition of an insurance policy, as made by Mr. Justice Gray, which has been generally adopted as correct. Commonwealth v. Weatherbee, 105 Mass., 160; Niblack Mut. Ben. Societies, sec. 163. It is said that the character of the benefit association is dual: First, fraternal'; second and incidentally, financial. Bacon Benefit Societies, sec. 283. If the incident be eliminated.. from the case at bar there is nothing left. That stamps it an ordinary insurance policy. State ex rel. Graham et al. v. Miller et al., 66 Ia., 26; State v. Citizens Benefit Assn., 6 Mo. Ap., 163; Farmer v. State ex rel. Carruthers, 7 S. W. Rep., 220; People ex rel, Blossom v. Nelson, 46 N. Y., 477. 1 Insurance: Right to fix by contract. Moreover, we have found no case which recognizes any distinction between the mutual insurance and the mutual benefit society, except in States where the statute makes a difference. But regardless of the character of the company, the rights of persons claiming insurance arise out of and depend upon contract, and must be ascertained and fixed by contract. Although the object of the company in entering into the contract may be benevolent, this purpose can import no new meaning to the unambiguous terms of a writing. When the courts are invoked, the contract measures the rights of one and the obligation of the other party, and relief must be granted, if at all, according to its terms. Niblack on Mut. Ben. Societies, secs. 163 to 165; Bacon on Benefit Societies, sec. 304; Holland v. Taylor, 11 Ind., 125. 2. same. Assignment of policy. That the member of a mutual benefit society may change the beneficiary named in the certificate has been frequently held; not, however, because of the character of the society, but because of the stipulation contained in the certificate expressly authorizing it. In most cases such certificates as have been the subject of judicial discussion, contained express stipulation that the beneficiary named might be changed ; in others the articles of association or by-laws contain such provisions and are by the terms of the policy made a part of it. The effect in each case is the same. 3. Same: Same. If such a purpose was entertained in making the contract sued upon it does not appear. The clause set out provides that the policy may be assigned. This does not mean that another beneficiary may be substituted by the insured, for substitution and assignment are quite different things; it simply intends that the beneficiary may assign his interest. The insured had no interest to assign. That was vested in the parties named. Bliss Life Ins., sec. 318; Bacon Ben. Soc., sec. 392. He had no power of substitution, because none is reserved in the contract, or in the charter or by-laws of the association, incorporated into the policy. The learnred counsel have shown very commendable industry in examining authorities, and equal skill in presenting them. We have carefully examined every case cited, and very many to which we have found reference elsewhere. The result is that we are satisfied that the judgment of the Circuit Court is correct, and it is affirmed.