Foss v. Petterson

FULLER, P. J. This action as instituted was to recover the amount specified in a benefit certificate purporting to have been issued to one of its members by the Modern Woodmen of America on the day of such member’s death, and, upon a sufficient showing that the defendant society stood ready to pay the full amount claimed to the legal beneficiary, the money was deposited in court, while the action 96 proceeded in the name of plaintiff against Rolf Petterson, a brother of the deceased Woodman and the sole beneficiary named in the original benefit certificate issued on the 3d day of November, 1903. After the introduction of testimony tending to prove that the name of plaintiff was by means of fraud and forgery substituted for that of the beneficiary, Rolf Petterson, without the knowledge or consent of the insured, the following allegation of the answer was established by the undisputed evidence and remains unchallenged in this .court: “That the said plaintiff is neither a relative in any degree of the said Gustave R. Petterson, nor a dependent, nor is he entitled to any of the proceeds of said beneficial certificate under the constitution, by-laws, or charter of said order, the Modern Woodmen of America, nor by tne laws of the state of Illinois, being the state under whose laws the said society, the Modern Woodmen of America, was organized.” Under the foregoing and other paragraphs of the answer, and over the objection of counsel for plaintiff, the trial court very properly admitted in evidence the by-laws of the society, which provide that “benefit certificates shall be made payable only to the wife, surviving children, or some other -person or persons specifically named in said benefit Certificate as beneficiary, who are related to the member as heir, blood relative, or person dependent upon him, or member of his family, whom the applicant shall designate in his application; provided, however, that no payment shall be made upon any benefit certificate to any person who does not bear such'relationship as wife, surviving child, heir, blood relative; or person dependent upon or member of the family of the member at the tíme of his death.” For the reason- that plaintiff was confessedly disqualified under these by-laws from becoming a beneficiary in any event, a verdict was directed in favor of defendant, Rolf Petterson, and the judgment complained of was entered, dismissing the action upon its merits. A standard author elucidates the objections that exist against the substitution or original designation of a beneficiary having no insurable interest in part as follows: “In either case the holder of such policy is interested in the death, rather than the life, of the insured. The policy of the law forbids such speculations based on the 97 ■continuance of human life. It will not uphold a practice' which incites danger to human life, and it substantially declares that no one shall have an}- claim under a policy upon the life of another in whose life he had no insurable interest at the time that he acquired the policy, whether the policy be issued to him directly from the in- ' surer, or whether he acquires the policy by purchase and assignment from another.’' May on Insurance, § 398. Were we to indulge the unjustified assumption that the insured Woodman actually attempted to substitute plaintiff as a beneficiary instead of his dependent brother, such action would be invalid, as against public policy, and, by reason of the original designation still remaining in force, the insurance would go to the latter. Elsey v. Odd Fellows’ Mutual Relief Association, 142 Mass. 224, 7 N. E. 844; State v. Standard Life Association, 38 Ohio St. 281; Presbyterian Assur. Fund v. Allen 7 N. E. 317; Sup. Lodge Knights of Honor v. Nairn, 60 Mich. 44, 26 N. W. 826; Fisher v. Donovan 77 N. W. 779, 44 L. R. A. 383. The statute of Illinois, pursuant to which the Mod- ■ ern Woodmen of America incorporated for the transaction of, bus- . iness, was not produced at the trial, but section 712 of our Revised ’ Civil Code is as follows: “No corporation or association organized or operating under this article shall issue any certificate of membership or policy to any person * * * unless the beneficiary under said certificate shall be husband, wife, 'relative, legal representative, heir or legatee of such insured member, nor shall any certificate be as- . signed; and any certificate issued or assignment made-in violation of this section" shall be void.” Accordiftg to all the authorities it seems vitally essential to- an effective change of the beneficiary named in the certificate of fraternal life insurance that the insured member observe the by-laws of the society and keep within the limitations prescribed by the laws of the state under which the society • originated, and in determining the legal status of a substituted beneficiary it will'be presumed in this state, there being- no evidence to-: the contrary, that the law of such sister state is the same as our, own. Sandmeyer v. Dakota F. & M. Ins. Co., 2 S. D. 346, 50 N. W. 353; Meuer v. C. M. & St. P. Ry. Co., 5 S. D. 568, 59 N. W. 98 945, 25 L. R. A. 81; Morris v. Hubbard, 10 S. D. 259, 72 N. W. 894. Plaintiff being a stranger to' the insured and expressly prohibited by the statute and by-laws from becoming his beneficiary, either by original designation or substitution, the verdict was properly directed against him, and the judgment appealed from is affirmed.