Rollins v. McHatton

Chief Justice Helm delivered the opinion of the court. Ho doubt exists as to the authority of MoIIatton to change the beneficiary named in the insurance certificate under consideration. Aside from the fact that this power is conferred upon the member by the charters or by-laws of benefit societies, the present contract contains a provision expressly authorizing the same. It declares that upon the death of the assured the sum mentioned will be paid “ to Mattie E., wife, as directed by the said brother in his application, or to such person or persons as he may subsequently direct by change of beneficiary entered .upon the record of the supreme secretary of'the Endowment Rank. * * * ” Appellant asserts that the entire amount called for by the certificate belongs to the son, and that appellee, the surviving widow, takes nothing. Mattie E., the beneficiary named in the certificate, hav-. [206] ing died before the assured, no interest in the fund provided for ever vested in her. Thomas S., her surviving son and heir, could, therefore, have inherited no part thereof by virtue of such relationship. But appellant confidently relies upon the proposition that the delivery of the certificate to him for the use of the son constituted a sufficient change of beneficiary to vest in the son, immediately upon the father’s decease, a right to the money. Upon this contention the principal controversy rests. "Were the certificate silent as to the manner in which such substitutions are to be made, there might be room for appellant’s contention. But turning to the extract above given, we discover that other persons than the one originally named can receive the bequest only upon direction of the assured “ by change of beneficiary entered upon the record of the supreme secretary. * * * ” This provision thus plainly declares how another person may be substituted in place of the one first designated. The language used is too plain to be misunderstood, and we are not at liberty to supply new words or to ignore the clear import of those employed by the contracting parties. The intent to permit a change of beneficiary at the will of the assured is no more plainly declared by the preceding clause than is the manner of executing that intent by the expression under consideration. The resolution to substitute can be enforced in but one way, viz., “ by change of beneficiary entered upon the record,” etc. It will not do to say that the entry upon the record is directory merely, or that it is of no special importance. This entry is an essential part of the substitution, and the change is incomplete until it is made. Bacon’s Benefit Societies, etc., sec. 307; Holland v. Taylor, 111 Ind. 121; Daniels v. Pratt, 143 Mass. 216; National Mut. Aid Society v. Lupold, 101 Pa. St. 111; Stephenson v. Stephenson, 64 Iowa, 534; Coleman v. Knights of Honor, 18 Mo. App. 189; Kentucky M. M. L. Ins. Co. v. Miller, Adm'r, 13 Bush, 489; Eastman v. Provident M. R. Ass'n, 62 N. H. 555; Hellenberg v. District No. 1 of 1. O. of B. B., 94 N. Y. 580. [207] The delivery of the certificate to appellant by McHatton was no compliance with the mode prescribed for effectuating a change of beneficiary. While it may be indicative of the intent of McHatton at the time, it was not the method agreed upon for the declaration of that intent. We cannot accept the view that this provision was inserted in the certificate exclusively for the protection of the association. It is doubtless a matter of importance to such societies that their books show all changes in this respect. But it is more important to the assured that some record of the kind be kept in order that his wishes in the premises may not, after his death, be defeated. And obviously the beneficiary is profoundly interested in having such definite and reliable record evidence of his ownership. It would be a dangerous precedent were we to hold that the designation of the change of beneficiary by entry upon the books of the company is not imperative. Disregard of the prescribed mode of substitution would tend to frustrate the wise and benevolent object to which these societies owe their existence. And if such changes could be made simply by delivery of the certificate,’ accompanied with oral declarations, any relative or dependent who might become possessed of the instrument would have it in his power to nullify the purpose of the deceased donor and deprive the true donee of the bequest. If McHatton desired to have his son receive all of the insurance fund, notwithstanding his remarriage, it was only necessary for him to comply with the plain language of the certificate. His failure in this regard, coupled with the decease of the beneficiary named, left the fund without any designated owner. Equity occasionally aids an attempted but uncompleted change of beneficiary. If the assured has done’ his part towards perfecting the substitution in accordance with the method prescribed, but owing to circumstances over which he has no control the change is not entirely consummated at the time of his death, equity will sometimes treat the substitution as complete. Bacon’s Benefit Societies, etc., secs. [208] 309, 31Ó, and cases. But it is an essential prerequisite to the interposition of equity that the assured has in good faith attempted to comply with the prescribed mode of substitution. McHatton made no effort to do this. It does not appear that he communicated, orally or in writing, to the secretary or to any other officer of the association, a desire to have the proceeds from the risk paid to his son; or that he otherwise sought to secure the proper entry in the association’s boobs. We are not called upon to consider what the result would have been had the society upon McHatton’s decease refused payment, and asserted a right to the reversion. Bacon’s Benefit Societies, sec. 243. For while it declined to give either of the claimants preference, it voluntarily deposited the money with the court to be awarded to them as equity and the law might direct. It is not a party to the present record, and no further notice will be taken of any possible interest it might have possessed. Did the court below, under all the circumstances above detailed, err in refusing to award appellant, for the use of the son, the entire proceeds from the certificate? The insured member of such societies has himself no interest in the fund; he possesses simply a power of appointment, which if not exercised becomes inoperative. Hellenberg v. Dist. No. 1, supra; Bacon’s Benefit Societies, sec. 243, supra. It would seem to follow that the insurance money could not in any event become assets of the insured’s estate. Eastman v. P. M. R. Ass’n, supra; Worley v. N. W. N. A. Ass’n, 3 McCrary, 53. That it cannot be used for the payment of his debts is stipulated in the agreed statement of facts and declared by express legislative enactment. Mills’ Annotated Stats., sec. 2246. The argument of counsel tends to show that the constitution adopted by the benefit association of which McHatton was a member .designates how the 'fund shall be distributed among the assured’s relatives in cases like the present, where upon his death there is no specified beneficiary. But since this con [209] stitutional provision is not a part of the record before us, we cannot be guided by its direction. It is unnecessary, however, to rest our decision upon either the statute of descents and distributions or the constitution of the association. Appellant, as guardian, recovered as much as would have belonged to the son were this constitution or statute applicable; and it is apparent from what we have said, that in the absence of some statute, by-law or contract touching the subject, he is not entitled to more. The apportionment of the fund in question made by the district court is eminently fair, and cannot be disturbed at the instance of appellant. The judgment is affirmed. Affirmed.