Court Opinion

ID: 3977280
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:34:50.288731+00
Date Added: 2024-06-11T13:53:35.408219
License: Public Domain

We understood, as is insisted in the motion for rehearing, that the claim of Hattie St. Clair to the insurance money was placed on two separate grounds; first that the money was payable after Cleghorn's death, to his order, and that she had the order; and second, that she was a dependent within the purview of the by-laws. We hold that she cannot recover on either ground.
If it could be held, as contended by appellants, that Cleghorn had rights that could not be destroyed by legislation after the policy was issued, and that Cleghorn had the right to give an order to any one he saw proper, still we hold that such power would not authorize him to enter into such a contract (of which the order was the consideration) as was in open disregard of law and morals. Had Cleghorn made a gift to Hattie St. Clair of the insurance money, or had it been given in consideration of legitimate services, the position contended for would have more to recommend it to consideration. But the intervener presents no such case. It is alleged in the plea in intervention, "That in the year 1880, the said Benjamin Cleghorn, deceased, proposed to this intervener, who was then a young single woman of twenty-three years of age, that if she would keep house for him, attend to his physical and temporal wants and needs, see to the preparation of his food, and that his clothing was keep neat and in good repair, do all his washing, nurse him in sickness, and occupy the position of wife to him, during the remainder *Page 481 
of his life, that he, the said Cleghorn, would care for, maintain and entirely support the said intervener during his life, and would insure his life for the sum of two thousand dollars, and make the said insurance payable to the said intervener at his death. That said intervener consented to such an arrangement, and made a contract with the said deceased containing the said terms, and bound herself to said deceased to carry out the same." This is followed by an allegation of performance of all the terms of the contract by the intervener and the execution of the order by Cleghorn. This at a time, too, when his legal wife was living. The prostitution of the intervener entered into and became a part of the contract which intervener performed. It was an illegal consideration, and, we think, vitiated the contract. Upon this contract intervener declared, and by it her cause must be adjudicated. It does away with any hypothetical case as to Cleghorn having the abstract right to give the insurance money to any one he saw proper, and that the nature of the consideration could not be inquired into. The consideration given by intervener is forced into consideration by her own allegations. We hold that she should not recover on a contract, which she alleges was based upon the prostitution of her body.
It seems to be a contention by the intervener, that the association was bound because it knew that she was the beneficiary, but the facts show that the association had no knowledge of the illegal relations maintained by them. Not knowing that the guilty relation existed, and being informed that the intervener had been designated, the association could not be held to have waived the by-laws as to the class of beneficiaries, or as to the property reverting to the association. It was not discovered that no legal designation had been made until after the death of the insured.
The case of Wist v. Grand Lodge A.O.U.W., 29 Pac. Rep., 610, decided by the Supreme Court of Oregon, is cited by the administrator in support of his claim that no one having been designated as beneficiary, the insurance money became at the death of Cleghorn a part of his estate, subject to his debts. In that case the deceased had made a designation, which, at the time made, was a valid and legal one, and the court held, in a suit between the association and the beneficiary, that the by-laws passed after issuance of the certificate would not be retroactive so far as to apply to a member who had no blood relative or any one dependent on him, and that the previously designated beneficiary could recover the fund. We are not prepared to accept the conclusions reached by that court, yet if they be correct, it does not follow that, if no beneficiary had been designated, the fund would become a portion of the estate of the deceased member. If it be held that the subsequent by-laws did not affect the terms of the original contract, still, there being no valid and legal designation of a beneficiary, the fund, as provided by the by-laws, reverted on his death to the association, and was not a part of the estate of deceased. "The member of a benefit *Page 482 
association having no interest nor property in the fund stipulated to be paid on his death to his appointee, but simply the power of appointment, failure to so appoint leaves the fund to be disposed of as provided for in the contract creating the power; and if no disposition is so provided for, then there is a total lapse of the power, and the fund will revert to the society." Bacon, Ben.  L. Ins., sec. 241.
The fund was payable to the order of Cleghorn, and, as said by the Supreme Court of New Hampshire, "The certificate was neither payable to the deceased, nor to his administrator, assigns, heirs, estate, or legal representatives. The defendant agreed to pay the benefit to no one, save such person or persons as Gigar should direct by entry upon the certificate or record book of the association. By the contract he had the mere power of appointing the person who should receive the benefit." Eastman v. Association, 62 N.H. 555. See also Worley v. N.W. Mas. Aid. Ass'n, 10 Fed. Rep., 227; McClure v. Johnson, 56 Ia., 620; Wason v. Colburn, 99 Mass. 342; Duval v. Goodson, 79 Ky. 224.
The cases cited by the administrator do not sustain the proposition that the benefit fund payable to the order of the insured in case he gives no order, will become a part of his estate. The cases discussed arose under different contracts from the one we have before us. We have considered this matter as though there was no by-law on the subject. But there was one which expressly provided that in case of the death of the insured, the fund should not become a part of the estate of the deceased. This by-law was never in any manner waived by the association.
We conclude that the motions for rehearings should be overruled, and it is accordingly so ordered.
Overruled.