Case Name: Simon Sternberg, Appellant, v. Pauline Levy, Respondent
Court: St. Louis Court of Appeals
Jurisdiction: Missouri
Decision Date: 1898-11-15
Citations: 76 Mo. App. 590
Docket Number: 
Parties: Simon Sternberg, Appellant, v. Pauline Levy, Respondent.
Judges: Judge Biggs dissents.
Reporter: Missouri Appeal Reports
Volume: 76
Pages: 590–601

Head Matter:
Simon Sternberg, Appellant, v. Pauline Levy, Respondent.
St. Louis Court of Appeals,
November 15, 1898.
I. Fraternal Beneficial Society: statutory construction: CREDITORS: FRAUDULENT CONVEYANCES: BENEFICIARY: INSURANCE. Prior to the passing of the acts of 1897 concerning fraternal benevolent associations doing business in this state, it was not the purpose of the statutes 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 association.
2 -: -: -: charter: by-laws. 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.
3. _: -: -: -. Prior to 1897 the beneficiary in a fraternal benevolent association was not entitled, as against the creditors of a 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 or assessments.
4. -: -: -:’ -: INSOLVENCY: JUDGMENT CREDITOR: equitable interpleader. In the ease at bar, the member was under no legal duty to support his widowed sister, nor to insure his life for her benefit; and his appropriation of $290 during his insolvency and during the existence of unsatisfied judgments 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 held by the judgment creditor who has filed his equitable interplea.
Appeal from the St. Louis City Circuit Court. — Hon. Hoeatio D. Wood, Judge.
Reveesed and eemanded.
Judge Biggs dissents.
Clopton & Teembly for appellant.
As against plaintiff an existing creditor, Joseph. Levy had no legal right to pay assessments for the purpose of keeping a beneficiary certificate in force for the benefit of his adult sister. The payments made by him for that purpose after he became insolvent were presumably fraudulent as against plaintiff, an existing creditor. Snyder v. Free, 114 Mo. 360; Ins. Co. v. Sandfelder, 9 Mo. App. 285, and authorities there cited by appellants; Hoffman v. Nolte, 127 Mo. 120. Inasmuch as $290 of the $569 paid by Joseph Levy to keep the certificate in force were paid after he became insolvent and with money which should have gone to plaintiff as his creditor, plaintiff is entitled under the law and the facts disclosed by the first count of plaintiff’s interplea to |-|-g of the proceeds of the certificate or $2,038.66. Pullis v. Robison, 73 Mo. 201, 210. The second count of plaintiff’s interplea sets forth good grounds why such portion of the proceeds of the certificate in question as might otherwise go to Pauline Levy, should be turned over to plaintiff. Eyermann v. Krieckhaus, 7 Mo. App. 455; Strauss v. Ayers, 34 Mo. App. 248-255, and numerous cases there cited by respondent; Epstein v .Clothing Co., 67 Mo. App. 221-226. The special bill of exceptions filed covers only the action of the court in striking out a part of plaintiff’s interplea. No motion for new trial, or in arrest, was filed by plaintiff after Pauline Levy’s motion for decree on the pleading was sustained. This court, however, will review the action of the trial court in rendering a decree for Pauline Levy because errors, if any were committed by the trial court in so doing, arise on the record and such motions were not necessary. - Funkhouser v. Mallen, 62 Mo. 555; Bagbee v. Emberson, 79 Mo. 139; Swaggard v. Hancock, 25 Mo. App. 596-604; Bauer v. Barnett, 46 Mo. App. 654.
W. O. & J. O. Jones and Giles Filley Jones for * respondent.
This court can not consider the alleged error of the trial court in striking out part of the interplea of •appellant. Bevin v., Powell, 11 Mo. App. 216-221; Hubbard v. Misc.berry, 32 Mo. App. 459; Baleson v. Clark, 37 Mo. 31-34; State v. Gee, 79 Mo. 313; In re Gardner, 41 Mo. App. 589; Mockler v. Skellett, 36 Mo. App. 174-176; Swaggard v. Hancock, 25 Mo. App. 604. The motion to strike out was properly sustained. The certificate in question was effected without fraud and valid, when taken out, and must remain so as long as the assessments are paid in full. Pullis v. Robinson, 5 Mo. App. 448, 456. The interpleader, Sternberg, is not entitled to recover assessments paid by deceased while insolvent. Bank v. Hume, 128 U. S. 195; Conn. Ins. Co. v. Burroughs, 34 Conn. 305; Burroughs v. Ins. Co., 97 Mass. 359; Unity v. Dugan, 118 Mass. 219; Ashby v. Oostin, 21 Q. B. 401; 29 La. An. 711; 51 Tex. 7; Bacon on Ben. Soc., 312. Though, if entitled to recover at all, the recovery •should be limited to the amount of the assessments paid during insolvency, to wit, $290, with interest. Bacon [2 Ed.], sec. .312; Pence v. Makepeace, 65 Ind. 345; Stone v. Knickerbocker, 52 Ala. 589; Stigler v. Stigler, 77 Ya. 163; Levy v. Taylor, 66 Tex. 652; Bank v. Ins. Co., 24 Fed. Rep. 770; Bank v. Hume, 3 Mackay, 360. Interpleader Sternberg can not recover at all, for the Western Commercial Travelers’ Association, one of the original defendants herein, is a fraternal beneficial society, organized under Revised Statutes Missouri, 1879, page 179,,section 972, and the funds accumulated by such societies are limited to certain classes of beneficiaries, among which persons in the position of ’ Interpleader Sternberg (i. e. creditors of the members) are not included. Knights of Honor v. Nairn, 60 Mich. 44; Legion of Honor v. Perry, 140 Mass. 580; Daniels v. Pratt, 143 Mass. 216; Duval v. Gloodson, 79 Ky. 224; Aid Ass’n v. Gronser, 43 Ohio St. 1; State v. Ass’n, 29 Ohio St. 399. Interpleader ■Sternberg can not recover in this case for the further reason that under no circumstances could the funds payable upon the death of the member have been made payable to his estate, and thus have become liable for his debts Keener v. Grrand Lodge, 38 Mo. App. 543, 552; Unity v. Dugan, 118 Mass. 219-221; Fenn v. Lewis, 10 Mo. App. 478, 481; Daniels v. Pratt, 143 Mass. 216.

Opinion:
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 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.
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 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 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 cause- remanded for a trial in conformity with this opinion.
Judge Bland concurs; Judge Biggs dissents.