Court Opinion

ID: 7061414
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:21:15.75692+00
Date Added: 2024-06-11T16:12:05.177658
License: Public Domain

Gavin, C. J.
The appellee sued the appellant upon á benefit certificate issued in 1881 to one Nye, but naming the appellee as the beneficiary. Nye became a member in 1871. In 1881 he was poor and unable to meet his assessments, nor would the members of his family provide for them. He then arranged with Olin and Metcalf to pay him $300.00 and to continue to pay his dues and assessments, they to have the proceeds of the certificate. In pursuance of this arrangement the old certificate was surrendered and á new one issued payable to Olin and Metcalf. Metcalf afterwards succeeded to Olin’s rights and paid the dues and assessments until Nye’s death in 1890. By the transaction, Nye obtained the $300.00 and received also about $500.00 sick benefits in addition to whatever other advantages he may have derived from the membership, while Metcalf paid out about $650.00, for which he claims to receive the $2,000.00 proceeds of the certificate. Olin and Metcalf were in no way related to or connected with Nye, nor were they his creditors nor possessed of any insurable interest in his life. They were simply purchasers of his certificate.
Appellant is not merely a mutual insurance com*137pany, but a fraternal and beneficial association, organized for moral instruction and scientific purposes, for the mutual assistance of its members and for the promotion of benevolence and charity, for the establishment of a widows and orphans’ benefit fund. From the proceeds of this latter fund, created by special assessments upon all the active members of the fraternity, the beneficiary certificates are paid.
Numerous interesting and important questions have been presented and argued by counsel, which, in the view we take of the case, need not now be passed upon.
By one answer appellant sets up that, by the constitution and by-laws of the 'lodge, it was prohibited from taking in persons over 55 years of age, and that Nye obtained admission by falsely representing his age as 49, when it was really 60. It is insisted that this paragraph was bad because it fails to show a tender back to Metcalf of the money received by appellant under the contract. The law was so declared in Gray v. Nat. Ben. Society, 111 Ind. 531, and while some members of the court doubt the correctness of the rule as there laid down, when applied to insurance contracts, the majority is of opinion that, in this case at least, we should not now depart from it. Appellant insists, most earnestly, that the transfer of the insurance to appellee cannot be upheld, because it was contrary to public policy as a wagering contract.
Appellee, on the other hand, asserts that there is no general rule applicable to all cases, but that each case must be considered upon its own facts; that “the real point in every case to be determined, is whether the transaction was an honest, bona fide one, or a mere sham and cover for a wager.”
It might be said, with much plausibility and force; that considering the peculiar character and purposes *138of such organizations as this, the fact that there is no reserve fund and no surrender value to the certificate,, and that the right to share in the benefit fund might be entirely destroyed by the expulsion of the member from the society by reason of some moral delinquency or misconduct of the member, there' is, in such certificates, no proper basis for business investment by an outsider, but that the purchase of such certificate, by one having no interest in the life of the assured, must necessarily be speculation pure and simple.
Assuming, for the purposes of this case, appellee’s position to be correct, and applying to the case in hand that rule, we are of opinion that the court erred in refusing to permit appellant to prove the age of Nye at the time of the transfer.
This was clearly a material factor in gauging the character of the transaction. This was plainly recognized by this court in the case of Nye v. Grand Lodge, 9 Ind. App. 131, where the court says, on page 147, “In the absence of the proof of any age or expectancy of life of the insured, we cannot say that the sale or assignment was tainted with the vice of gambling.” In this case the appellant sought to apprise the court of the very fact without which it has held it could not determine the question.
What weight the evidence may have had with the jury we cannot, of course, declare, but the facts are not such as to authorize us to say that appellant was not harmed by its exclusion.
If it was for the jury to determine the character of the transaction from the facts of this case, the facts should have been presented to it. Olin saw and conversed with Nye; knew he was an old man and not in good health. It is true he testified that he did not know how old Nye was; that he never thought of his age; that it never occurred to him; and appellee, who *139also talked with him, said he did not consider his age nor the possibilities of life, but thought he was a middle-aged man about 50; but the jury was not bound by these answers so as to eliminate from the case this important fact of his actual age.
It has been suggested that this evidence was not applicable to the issues joined, but when we consider the character of the complaint, the construction placed thereon by counsel-, and the course of the trial, we do not think it can be so held.
The complaint in this case is not confined to a mere statement of the issuing of the certificate payable to the beneficiary, the death of the member and the consequent right of action, but sets out fully and in detail the facts and circumstances upon which the plaintiff evidently relied to show that he was not a mere ordinary beneficiary, but was the owner by purchase of the policy or certificate.
The case was tried by counsel on both sides, and presented by them in this court upon the theory that the issues embraced the question of whether or not the rights of appellee were acquired through a wagering transaction, and thereby placed outside the pale of the law’s protection.
Upon this theory, appellee’s evidence was submitted. He proposed, by his first witness, Olin, to prove the efforts made to procure Nye’s children to carry this certificate. Upon objections being made, Mr. Smith, one of the counsel for appellee, stated: “I submit, may the court please, that that is competent to show the circumstances as bearing upon the question whether or not this is a wagering policy.” The evidence was admitted and the circumstances attending the assignment were fully developed by appellee.
In their brief, appellee’s counsel state at page 19, touching this subject: “The question is, do the facts *140set up in the complaint, to which a demurrer was overruled, or in the answers to which demurrers were sustained, or the evidence upon which judgment was rendered in appellee’s favor, show that the transaction was a gambling or wagering contract, and thus under the' ban of the law?”
Having thus himself tendered the issue as to the contract being a wagering one, and having obtained the admission of his own- evidence relative to this proposition, it would not be consistent with the principles of justice and fairness to refuse to hear the appellant upon the same subject. Campbell v. Conner, Admr., 15 Ind. App. 23.
Nor have the appellee’s counsel, in this court, made any claim that the- question of wagering contract was not in issue; although they did claim that this evidence, as proof of fraudulent representations, could not be admitted for want of an issue setting up fraud.
Whether or not it would b.e put in issue- by the general denial, had the appellee based his claim in his complaint and evidence merely upon the fact that he was the beneficiary named, we do not feel called upon to determine, although the question seems to be decided in the affirmative by Alabama, etc., Life Ins. Co. v. Mobile, etc., Ins. Co., 81 Ala. 329.
It is most earnestly argued, by appellant’s learned counsel, that appellee was not eligible to be a beneficiary under this certificate; that such certificates in such organizations are not transferable to one possessing no interest in the life of the insured; and that the purchase was purely speculative,,and therefore unenforceable. If all these positions be well taken, nevertheless, upon the well-founded principles of equity and right, and under the authorities, appellee should recover' the amounts by him paid out to keep the policy alive. The answers to which demurrers *141were sustained did not therefore state, in any event, complete defenses to appellee’s complaint. Shonfield v. Turner, 75 Tex. 324; Downey v. Hoffer 110 Pa. St. 109; Connecticut, etc., Ins. Co. v. Burroughs, 34 Conn.305; Lemon v. Phœnix, etc., Life Ins. Co. 38 Conn. 294; Weisert v. Muehl, 81 Ky. 336; Unity, etc., Life Ass’n v. Dugan, 118 Mass. 219; Niblack Ben. Soc., section 348; Bliss Life Ins., section 350; 1 Bacon Ben. Soc., section 303; City Sav’gs Bank v. Whittle, 63 N. H. 587; Cammack v. Lewis, 15 Wall. 643; Dutton, Admx., v. Wilner, 52 N. Y. 312; Wainock v. Davis, 104 U. S. 775; Helmetag’s Admr. v. Miller, 76 Ala. 183.
Filed April 24, 1896.
Since the evidence rejected went only to prove that the investment by Olin and Metcalf was purely speculative, and since, under the authorities hereinbefore cited, they would be entitled to the return of their money and interest, we have concluded that the ends of justice will be best subserved by permitting appellee, if he so elects, to remit the excess of the judgment over that amount.
The judgment is, therefore, affirmed upon condition that appellee remits all of said judgment except $1,034.00, as of the date thereof, within 45 days. Otherwise the judgment will be reversed.