Sternberg v. Levy

Bond, J. This is an equitable interpleader for a fund paid into court to be distributed according to the equities of the rival claimants. The fund in question is the proceeds of a benefit certificate issued about December 31, 1880, upon the life of Joseph Levy, and payable to his adult widowed sister. Joseph Levy died “the sixteenth of December, 1897, whereupon $4,000, the amount of said certificate, was paid into court by the association of which he was a member. One hundred dollars was allowed the association as costs of its pleading, and it was stipulated that $1,400 should be paid to Pauline Levy, and an interpleading was had [594] between her and Simon Sternberg, a judgment creditor of the said Joseph Levy, for the remaining $2,500. A motion to strike out the part of the interplea of Simon Sternberg was sustained, whereafter the cause was submitted to the court upon motions for judgment by the respective interpleaders on the allegations contained in the two interpleas. The court gave judgment for interpleader Pauline Levy and directed the payment to her of the fund in controversy, from which decree interpleader Simon Sternberg duly appealed to this court. [595] Statutory construction. [596] Duty of member. [594] The decree of the trial court recites that it was based on the “undenied and admitted” allegations in the pleading. Whether it was proper under these pleadings is the only question for review. The pleadings state in substance that the benefit certificate was issued,,made payable, and the right thereto accrued as hereinbefore stated; that the association issuing the same was organized under article 10, chapter 42 of the Revised Statutes of 1889, limiting the beneficiaries of such certificates to the class therein set forth; that interpleader Pauline Levy was within this statutory designation and so continued until the death of the member; that interpleader Simon Sternberg did not belong to said class, but was the owner of two unsatisfied judgments, dated July, 1891, against said Joseph Levy, aggregating over $2,500; that said Levy for the purpose of keeping the benefit certificate alive, paid in assessments to said association $279 prior, and $290 subsequently to the rendition of said judgments; that during the latter period said Joseph Levy was wholly insolvent, and so continued until his death, at • which time he left no assets subject to execution at law and none available in equity, unless the portion of the proceeds of the benefit certificate produced by the assessments paid by him after his insolvency is applicable to [595] the judgments subsisting against him when the payments were made. It is objected to this view of the case that the rules of the order, as well as the. statutes of the state, limit the appointment of beneficiaries to a designated class. It is therefore contended that the fund in question is beyond the reach of the creditor of the member, Simon Sternberg, and belongs absolutely to Pauline Levy, who is embraced in the class which the association was organized to insure. There might be some force in this contention if the rights of the claimants had'accrued under a policy issued by a fraternal-benevolent association doing business in this state under the acts of 1897. See Session Acts, p. 132; Meyer v. Supreme Lodge K. & L. H., 72 Mo. App. 350. But in the ease cited it was held by this court that prior to 1897 it was not the purpose of the legislature by designating a particular class of beneficiaries to exempt the amount due under the certificate issued by fraternal-beneficial societies from garnishment in the hands of the association for the debts of the beneficiary. It is equally clear that, prior to said date, it was not the purpose of the statute to vest in a designated beneficiary a fund which under the statute, Revised Statutes 1889, section 5170, would be liable to the creditors of the member of the order, nor was it competent for the association through its charter or by-laws, to enable one of its members to thwart the provisions of the statute defining fraudulent conveyances. Where a member used money, which he might lawfully withhold from his creditors, in the payment of assessments on benefit certificates, unquestionably his appointee would have been entitled to the proceeds of the certificate against the creditors of the member; but the protection of the beneficiary went no further prior to the said acts of 1897; nor was he entitled, as against the [596] creditors of tho member, to any portion of the insurance evidenced by the benefit certificate which was produced by money which the member illegally withheld from his creditors and used to pay premiums of assessments. This has been expressly decided by our supreme court. Pullis v. Robinson, 73 Mo. 201; affirmed in Chapman v. McIlwrath, 77 Mo. loc. cit. 46. In the case first cited it was held that the payment by a husband, while insolvent, of premiums in excess of $300 on insurance effected for the benefit of his wife, entitled his existing creditors to that proportion of the amount due under the policy of insurance which the premium paid during insolvency bore to those paid while the husband was solvent. That case is much stronger than the one at' bar. It was decided under- a statute exempting $300 of premiums paid by an insolvent member on a policy for his wife. It was ruled that the total amount of $343 paid during the insolvency of the husband inured to the benefit of his creditors, in the face of the fact that the beneficiary, the wife, was one to whom the husband owed both a legal and moral duty of support. In the case before us no exemption, statutory or otherwise, could arise, or is made upon the record. Meyer v. Supreme Lodge, K. & L. H., supra; Stotesbury v. Kirtland, 35 Mo. App. 148. The member was under no legal duty to support his widowed sister, nor to insure his life for her benefit. His appropriation of $290 during his insolvency and during the existence of the aforesaid judgment against him was in contravention of the equitable rights of the owner of said judgments, and the fund produced thereby is liable in the present proceeding to the satisfaction of said judgments. It thus appearing from the face of the pleadings and the decree in this cause that the judgment of the trial court was erroneous, it will be reversed and the cause597 remanded for a trial in conformity with this opinion. Judge Bland concurs; Judge Biggs dissents.