Court Opinion

ID: 8261991
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:55:23.445357+00
Date Added: 2024-06-11T16:43:12.752242
License: Public Domain

DISSENTING OPINION BY JUDGE BIGGS.
The statement of facts in the majority opinion is-substantially correct as far as it goes. It fails, however, to state that the certificate of insurance in question was issued by the Western Travelers’ Association, which is a benevolent society, organized under article 10, chapter 42, of the Revised Statutes (1889) of Missouri, and that the interpleas herein are based on orders of the circuit court in an equitable garnishment proceeding instituted by Sternberg against the association and Pauline Levy, the object of which was to subject the amount due under the certificate to the-payment of certain judgments against Joseph Levy,, the member.
My associates rely on the cases of Pullis v. Robinson, 73 Mo. 201; and Chapman v. McIlwrath, 77 Mo. 38, and Meyer v. Supreme Lodge, 72 Mo. App. 350, as authority for the conclusion reached by them. The difficulty is that they have misapplied the decisions in those cases. In the Pullis and Chapman eases the supreme court was dealing with the proceeds of regular life insurance policies. In the former case the contest was between the creditors of the deceased husband and his widow. The life of the husband was insured in a life insurance company for the benefit of his wife. At the time the policy was issued the husband was solvent, but he subsequently became insolvent. He continued to pay the annual premiums which exceeded in amount what he might lawfully apply under section 5851 of the statute in purchasing insurance for the benefit of his wife. The section is found under article *5982, chapter 89, entitled “Life and accident insurance,” and is as follows :
SstrTuct^ycon‘ “It shall be lawful for any married woman, by herself and in her name, or in the name of any third person, with his assent as her trustee, to cause to be insured, for her sole use, the life of her husband, for any definite period, or for the term of his natural life; and in case of her surviving such period or term, the sum or net amount of the ■ insurance becoming due and payable by the terms of the insurance shall be payable to her and for her own use, free from the claims of the representatives of her husband or of any of his creditors; but when the premiums paid in any year out of the funds or property of the husband shall exceed five hundred dollars, such exemption from such claim shall not apply to so much of said premiums so paid as shall be in excess of five hundred dollars, but such excess, with interest thereon, shall inure to the benefit of his creditors.”
Under these facts and the foregoing section of the statute as applicable thereto, the supreme court held that the proceeds of the policy should be distributed between the widow and the creditors of the deceased “in the proportion that the premiums paid by him when solvent bears to those paid after his insolvency.” In other words, that the insurance purchased with premiums in excess of the amount allowed by statute inured to the benefit of the creditors of the husband. This disposition of the insurance money was in pursuance of the statute, and aside from the statute it would not have been contrary to the general policy of the law, for it is lawful for a life insurance company to issue policies on the lives of debtors for the benefit of their creditors. But under the laws of this state such a certificate or policy can not be issued by a benevolent *599association. The death benefits are solely for “the relief and aid of the widows, orphans or other kindred dependents of deceased members, etc.” (R. S. 1889, sec. 2823), and it is only lawful for such societies to accumulate a fund for the specified objects. It is clear that the creditors of the member can hot be included in the above classifications, and it is equally clear under many decisions that an attempted diversion of such a fund, either by the society or the member, or by both, is a nullity. Therefore it is logical that if the society and member can not directly or indirectly insure the life of a member for the benefit of the latter’s creditors, it is not possible for a court of equity to accomplish such a result by its decree. It is useless to argue that this is not the effect of. the decision in this case. Sternberg claimed the fund as insurance money, and as such my associates award it to him. This ruling is opposed to all the decisions. I will only quote from a few of them.
Speaking of benevolent and fraternal associations, this court in Grand Lodge v. Elsner, 26 Mo. App. loc. cit. 117, quoted approvingly from the case of Grand Lodge v. Nairm, 60 Mich. 44, that “the law of that state (Missouri) expressly forbids corporations of this sort from paying benefits to any but the member’s family or dependents. The intent of the prohibition is clearly to shut out all persons who are not actual relatives, or standing in place of relatives in some permanent way, or in some actual dependence on the member.”
In Fenn v. Lewis, 10 Mo. App. 480, the widow and the administrator of a deceased member of a benevolent society claimed the proceeds of the certificate. The decision was in favor of the widow. The court said: “It does not seem to have been contemplated that the fund should be paid to the administrator *600of the deceased, and made liable for his debts.” This decision was affirmed by the supreme court (81 Mo. 259).
In Wagner v. Benefit Society, 70 Mo. App. 161, it appeared that the defendant, a benevolent association, was authorized to provide insurance for “the widows ;and orphans” of its members. A member died without children. By his last will he directed that the amount of the insurance should be paid to his father, in order to reimburse him for money paid to defray the expenses of the last sickness of the member. The plaintiff was the widow of the deceased, and she brought the action to recover the fund. The Kansas City court of appeals held that neither the association nor the member could provide for persons not named in the statute, and that the father being only a creditor of the deceased the attempt to secure the payment of his debt was a nullity.
In discussing the law applicable to fraternal societies, the supreme court in Masonic Benevolent Association v. Bunch, 109 Mo. loc. cit. 578, decided that “when the charter limits the beneficiaries to certain classes, the member has no power to designate some one not coming within those classes.”
Many other cases could be cited which declare the same doctrine, In fact I have been unable to find any authority to the contrary. It being unlawful therefore for the creditor of a member of such a corporation to receive any benefit under such a certificate, it follows as a self-evident proposition-that it is beyond the power of any court to award to him the money. In Ballou v. Gile, Administrator, 50 Wis. 614, the court decided that the fact that the association had paid the money into court, could not in any manner affect the rights of the legal beneficiaries, and if the plaintiff could not recover the money in a direct action against the *601association, he could not recover on his interplea. “The court must see to it that the'money is paid out as directed by the rules and laws governing the society.”
The extent of our decision in Meyer v. Grand Lodge, supra, was that prior to the act of 1897 (Sess. Acts 1897, p. 132), the amount due under a certificate issued by a Benevolent Association was subject to garnishment for the debts of the beneficiary. This I think is plain law. But it does not follow that the same fund would be likewise subject to garnishment by a creditor of the member.
Under the foregoing authorities I am clearly convinced that the majority opinion in this case is wrong, and as I am also of the opinion that it is contrary to the decisions of the supreme court and the courts of appeals in the cases above referred to, I ask that the cause be certified to the supreme court.