Sykes v. Armstrong

1. Insurance. Mutual benefit insurance. Bight of beneficiary. Executors and administrators. Expenses of administration. Interest on insurance policy. Benefits. Provisions of charter and by-laws. Lapse. The beneficiary in a mutual benefit policy has no vested interest in same during the life of the insured his right is inchoate, imperfect and ambulatory, until the death of the insured, and so where the beneficiary dies before the insured, the proceeds of the policy upon the death of the insured goes to his estate and not to the estate of the beneficiary who died first. 2. Executors and Administrators. Expenses of administration. In. such case the cost of administering the estate of the beneficiary-are not chargeable upon the proceeds of the policy of insurance. 3. Mutual Benefit Insurance. Benefits. Provisions of charter and by-laws. In determining who is entitled to receive the benefits of mutual benefit associations, wherein the money contributed by its members provides the fund from which the benefits are paid, we should give a liberal construction to the by-laws of the association so as to effect the purpose of the parties to the contract. 4. Same. The constitution and by-laws of this order simply mean that when the beneficiary named under the policy, is dead or when there is no named beneficiary in the policy, then the proceeds of the same go to the widow, orphans or legal representatives, that the-named beneficiaries take under the policy the amount they would inherit from the decedent in case of his intestacy, as if it was a part of his estate, subject, however, to the cost of the administration of the estate of the insured. 5. Insurance. Benefits. Lapse. In no case where there are of the class living who are designated as probable beneficiaries in the policy does the insurance entirely lapse or is it uncollectible.

Appeal from the chancery court of Monroe county. Hon. J. Q. Robbins, Chancellor. Clara E. Sykes excepted to the final account of James D. Armstrong, administrator of the estate of Alice Sykes, deceased, and also of the estate of W. M. Sykes, deceased. Decree for the administrator overruling’ exceptions, and the exceptor appeals. The facts are fully stated in the opinion of the court. Counsel for appellee argue in opening his brief that the court did not commit error, because if Alice Sykes had no vested interest in the money derived from this certificate, neither did the estate of William Sykes; and we agree with him that this is unquestionably correct, but he is in error when he states further that Clara Sykes, the appellant, could not have collected from the O. F. B. A. this money by suit either in law or equity “because she was not named in the policy.” Counsel then cites the case of Warner v. Modern Woodmen of America, 108 A. S. R. 634, as sustaining this argument. He also argues that the O. F. B. A. had the right to retain this money itself and refers to the same case as sustaining his assertion. We respectfully submit first, that his argument is unsound; and second, that the authority relied upon does not substantiate the argument nor is it of any aid to the court in the decision of this case because it is not in point. The case of Warner v. Modern Woodmen of America, cited by counsel and relied upon is not in point. In that case the member had designated his legal heirs as beneficiaries; he .died unmarried, intestate leaving “no children, relative, kindred, legal heirs or others sustaining such relation to him as would entitle them to become beneficiaries under the terms of the certificate and by-laws of the association.” In the suit between his administrator and the association, the court rightfully held that the'administrator had no right to the funds; but the court based its ruling solely and alone on the fact that there was no one in existence who could have' been made a beneficiary under the terms of the certificate and by laws and consequently the administrator being no such person was not entitled to recover. But in the case at bar it appears that when the designated beneficiary, Alice Sykes, had died and that then Wm. Sykes died leaving appellant as his widow, there was then in existence appellant, the second wife and widow, who could have been made beneficiary under the terms of the certificate and constitution; and one whom we insist was designated by the very law of the F. O. B. A. as the beneficiary, entitled to the proceeds. We assert that the case is in the same attitude as if William Sykes had named no beneficiary, in which even, under the law of Mississippi, the constitution of the O. F. B. T. must be looked to for direction and if the constitution specifically designated the fund to be paid to the “widow, orphan or legal representative,” which is clearly a preferential designation, the punctuation and the disjunctive' “.or” used intentionally by the framers of the laws of the order, the constitution thus naming the beneficiary as the widow in preference to the orphan is thus not naming the widow and orphan jointly as beneficiaries. Counsel for the appellee also says that the money was paid over to the administrator of Alice Sykes’ estate; this is true but that does not give the children of Alice Sykes any right to this fund as against appellant; appellant’s rights are protected by the direction of the constitution of the order and her rights cannot be impaired or jeopardized by any action of the order. In. addition to this in an authority cited by the court the Warner Case, ubi supra, on page, 639-640 it is held that: “When the money is thus paid to the administrator who is not entitled to it (as was done in the case at bar) the administrator can only hold the fund as trustee for the claimants who might bring themselves within the class of beneficiarieb.” Since appellant is described as beneficiary by the constitution when it says to be paid the widow, etc., the administrator of Alice Sykes’ estate merely holds the money or collected it as trustee for appellant. The only other case cited by appellee is that of Ex-pressmans’ Mutual Ben. Ass’n. v. Bourlock, 80 A. ¡S. B. 470. We say of this authority, first, that it is not in point and second that it is not sound law and is opposed to the holdings of a majority of the state courts and expressly contrary to the decisions of the state of Mississippi. In counsel’s brief he says on page 3 that the “contract was at an end when Alice Sykes died and no new beneficiary was named by the insured that it was no more than blank paper, no one could collect the insurance by law, etc.” We submit that this is a nonsequiter and bald assertion by counsel not supported by law but on the contrary in the very teeth of the authority he had previously cited, to wit: Warner v. Modern Woodmen of America. This assertion is opposed to the very terms of the constitution, and by the action of the O. F. B. A. in paying this money, he is contradicted. Counsel asserts further that the chancellor “Folded the cloak of humanity around the fireside of'the home of William Sykes and said: ‘This is the fruit of the labor of your father and mother who have gone to their reward, etc.’ and then awarded the money to children of Alice Sykes.” We have very serious doubt about the chancellor having had any such thoughts in his mind; if he did, he failed to give expression to them and if he did he had no evidence in the case to sustain him. Counsel also cites the casé of Saffold v. Horne, 72 Miss. 470, to the effect that grammatical construction will not be allowed to override the manifest intention of an instrument. We agree with him that this is the law and we submit to the court that the court should not allow the grammatical construction by the chancellor, not warranted by the rules of grammar, to override the manifest intent of the constitution of the O. F. B. A. and should consequently reverse the action or decree of the lower court in overriding the clear intention of the constitution and should enter a decree here for the amount of the money shown to be due, to wit: nine hundred and seventy-five dollars. We submit and claim that the chancellor did not commit an error in his decrees ordering the money distributed in • the W. M. Sykes estate, because if Alice Sykes had no vested interest in the money derived from the insurance policy, neither did the estate of W; M. Sykes have a vested interest, nor did Clara Sykes have a vested interest in the money or the policy of insurance, nor could Clara Sykes have collected the money by suit at law or equity from the society because she was not named in the policy, nor had the policy been changed in her favor, and the insurance company or society did as it was authorized to do under the law by “waiving its right to keep the money and not let it revert to the society which it had a right to do, but paid the amount to the administrator of the estate of Alice Sykes, deceased, ’ ’ for that was the only legal way the society could have paid the money on the policy, because it had not been changed from the original beneficiary Alice Sykes. “Mutual Benefit Associations. Reverting of the fund to where there is a failure to designate a beneficiary, or avoid designation, or the death of the beneficiary occurs before that of the assured, and no new beneficiary is named, the association is not liable.” Warmer v. Modern Woodmen of America, 108 A. S. R. 634., and on page 639, lb., in the case of Ryan v. Bothweiler, 50 Ohio St. 595, 35 N. E. 676, the insurance company abandoned all claim to hold the proceeds of the certificate. The question of the right of the administrator to take the proceeds was waived. Expressman’s Mutual Benefit Association v. ifuriock, 80 A. S. R. 470'. Counsel cites 25' A. S. R. 260 to 264 and notes, which does not apply in this suit, because the society paid the money to the administrator of Alice Sykes, deceased, estate and waived its right to keep the amount in its treasury, which it had the right to do. The case of Young v. Roach, 61 So. 984, cannot apply in the case at bar, because the policy of insurance in that case was payable to a party living and she had the right to collect and receive the money direct from the society without administration, etc. The case cited by counsel for appellant, American Annotated Cases, 1913 “A,” at page 299 cannot apply in this suit because that was a question of whether a grand-child should take its mother’s share in a policy of insurance who had died, before the insured; neither does the case cited by counsel in American Annotated Cases, 1913 “A,” page 1243, because that case was one in which, the question was of the birth of a child under a v.oid marriage. For in the case at bar, the contract was at an end when Alice Sykes died and no new beneficiary was named by the insured, it was no more than blank paper; no one could collect the amount of the insurance by law, nor did the insurance company have to pay it but waiving their right to retain or keep it and paid to the administrator of the estate of Alice sykes, deceased, the beneficiary named in the policy. It is evident that the chancellor took that broad view of human neccessity and folded the cloak of charity around the fireside of the home of W. M. Sykes, deceased, and said, “this is the fruits of the labor of your father and your mother who have gone to their reward, and in the name of justice and the law, you shall have that which belongs to you.” As to the grammatical viewpoint counsel has gone into and labored a great length; I think it has been disposed of by our court in the case of Sajfold v. Horne, 72 Miss. 470, which says: “Grammatical construction will not be allowed to override the manifest intent of an instrument. ’ ’ Also in the ease of Armory Mfg. Co. v. Gulf, etc. By. Co., 59 A. S. E. 65, punctuation, is a most fallible standard by which to interpret a writing; (the language quoted being that part of the opinion taken from the supreme court of the-United States in Ewing v. Burnet, 11 Pet. 41.) The court in construing the by-laws of the Odd Fellows Benefit Association in the case of Shelton v. Minnis, 65 So. 114 (Miss), says: We should give a liberal construction to the by-laws of the association so as to effect the purposes of the parties to the contract (and noting the constitution and by-laws.) Also see! Foote v. Grand Lodge of Colored Knights of Pythias, 67 So. 901 (Miss.) In the case of Grand Lodge of Colored K. P. v. Harris,, 68 So.'75, 76 (Miss.), we have a case very much like the case at bar, the beneficiary being named as.the wife of the insured, when in fact she was not his wife, who probated her claim with the order after insured’s death, and received payment of the amount due on the policy, the real wife in fact of the insured brought suit against the insurance company which was dismissed.