Polish Natl. Alliance v. Crowley , 38 Ohio App. 327 ( 1930 )

The defendants in error recovered a judgment in the municipal court of the city of Cleveland against the plaintiff in error, under a policy of insurance between a decedent member, Antoni Liszka, and the Polish National Alliance of United States of North America, and it is sought to reverse the judgment on the ground that, the decedent having been murdered by his wife, who was named as beneficiary in the contract of insurance, no recovery could be had by the beneficiary, under the terms of the insurance contract, and it is further argued that her children could not benefit any more than she as beneficiaries for the reason that the policy was void, or had lapsed, because of the clause in the insurance policy which reads as follows: "No mortuary benefit shall be paid to the beneficiaries of a member after his death, if the member lost his life by reason of any act or acts designed on the part of the beneficiary or beneficiaries for the purpose of securing the mortuary benefit [Sec. 18, Art. C., p. 871]."

The defendant Crowley is the administrator of the deceased person, and it appears that one Corinne W. Zisky is the duly appointed guardian of the three minor children, and upon her application she was made defendant herein and filed a statement of defense and cross-statement of claim seeking to recover $1,000 as a death benefit for the children.

It is argued that the clause quoted is part and parcel of the contract of insurance, as it is a clause from the constitution and by-laws of the plaintiff in error. There can be no question about this, but the real question is whether under this clause there is any stipulation that prevents the minor children, or the estate, from recovering the benefits of the insurance policy. There can be no question that the clause noted, by contractual effect, bars the beneficiary, the widow, but the provision ends there, and the policy, so to speak, hangs in the air because there is no clause which voids or lapses the policy or makes any provision whatsoever for the disbursement of the insurance fund, and certainly it cannot be claimed that the contract was made for the benefit of the Polish National Alliance, inasmuch as the premiums that had been paid up to the time of the death of the insured were contributions to its property which formed a basis for the payment of the insurance fund under the stipulations of the policy. If the policy, through the by-laws, or other stipulation, had incorporated a provision which rendered the policy void because of acts designed upon the life of decedent, to secure the mortuary benefit, then, of course, by contract the policy would have lapsed, and then and thereupon would have become void, not only as to the beneficiary, but to all others, heirs or otherwise.

If there was a provision in the by-laws, or by way of stipulation independent thereof, that the policy would lapse upon the loss of life by murder of a member of the plaintiff in error, then under the contract the policy would lapse, and no one would have any right to recover the insurance, not because the beneficiary named in the policy could not recover, but because of the mutual agreement, as insurance contracts are similar to any other and must be interpreted accordingly. However, upon the lapsing or the voiding of the policy, the premiums paid ought to have been tendered, but in the case at bar no such tender is claimed, so that the status is that the plaintiff in error is voiding the policy without making the tender of the premiums.

We think that the instant case is in line with a former decision of this court in the case of National Benefit Life Ins.Co. v. Davis, Admr., 30 O.L.R., 270, from which we quote for the purpose of showing the similarity in the record: "The question then arises whether this policy becomes uncollectible because the sole beneficiary being in a position where she cannot collect, is to indirectly have the benefit of any part of this policy and the insurance. It might be that the policy had been carried for a great many years, and there have been a large amount of premiums paid on the policy, and manifestly it would be wrong to permit the insurance company to avoid payment and keep the premiums as they had been paid, for we assume that there was no provision in this policy which makes it void upon the felonious killing by the beneficiary of the insured. It then must be a contract in force and it must be for the benefit of somebody. Manifestly it cannot be for the benefit of the insurance company. Its benefit came from its premiums and its liability to pay accrued upon the death of the insured, unless there be some reason why the policy became void."

Cooley's Briefs on Insurance (2d Ed.), volume 6, page 5229, is authority for the doctrine that the insurance liability in cases like the one at bar is not absolutely ended, and that the policy will be enforced for the benefit of the heirs or estate of the insured.

In Joyce on Insurance (2d Ed.), volume 2, page 1827, it is held that the beneficiary who feloniously kills the insured cannot take, but that the policy may be enforced by the administrator on the theory of a resulting trust for the benefit of the estate. There are many other decisions of similar character.

Schmidt, Admr., v. Northern Life Assn., 112 Iowa 41,83 N.W. 800, 51 L.R.A., 141, 84 Am. St. Rep., 323, we think is applicable to the case at bar. In that case decedent's wife was the named beneficiary in his life insurance policy. After the issuance of the certificate, the wife feloniously caused the death of her husband, the insured. The deceased husband's administrator claimed the proceeds of the policy on behalf of the estate. It was held that the wife could not recover because it was contrary to public policy to allow her to enforce the claim, but that public policy did not extend so as to defeat all claims on the policy. The court further held that it was well-settled law that, when there had been no designation, or a designation of a person as beneficiary who died before the insured, or an illegal designation, the insurance company held the fund in trust for the benefit of the estate of the insured. We quote from the opinion in that case, at page 49 of 112 Iowa, 83 N.W. 800, 803: "Following this doctrine to its logical conclusion, it seems to us that, when the beneficiary named is prohibited from taking because of her own wrong, a trust arises, that will be enforced in a proper case. This trust is created in favor of the husband's estate, and takes effect by reason of the crime of the wife, which destroys the trust in her favor. In so far as she is concerned, the trust is destroyed by her crime, and in consequence a resulting trust in favor of the husband's estate is allowed. If we treat the designation of a beneficiary as akin to a bequest, the same result follows; for a lapsed legacy descends to the heirs of the testator.* * * No one will doubt the proposition that whenever property is produced by payments made by one, that are to be held in trust for another, and that trust fails or is satisfied, a resulting trust arises in favor of the party making the payments, or his estate. The celebrated case ofCleaver v. Association, (1892), 1 Q.B. Div., 147, * * * is much like the one at bar; and it was there held that notwithstanding Mrs. Maybrick, who murdered her husband, was named as beneficiary in his certificate of insurance, and could not recover from the insurance company, still the insurance money formed a part of her husband's estate, and could be recovered by his administrator."

A section of the by-laws of the plaintiff, page 83, article 4, subsection (A), provides as follows: "To whom payable: A mortuary benefit after the deceased member shall only be paid to the family, legal beneficiaries, blood relations, affiant's wife, or affiant's husband, or to persons dependent upon the deceased member for support, incorporated public charitable institutions or equivalent institutions permitted by law, with the concurrence of the central government."

Sections 9393, 9394 and 9467, General Code, have application to the question at bar, but there is no language in any of these sections which is an inhibition against the insurance company paying the benefits to the minors of the beneficiary, even though she herself is barred from recovery.

The cases of McDade v. Mystic Workers of the World, 196 Iowa 857, 195 N.W. 603, and Griffith v. Mutual Protection League,200 Mo. App., 87, 205 S.W. 286, cited by counsel for plaintiff in error, may be distinguished from the case at bar for the reason that the policy or by-laws in those cases contain provisions declaring void the policy upon the arising of certain contingencies. In the case at bar there is no provision in the insurance contract, or in the constitution and by-laws, that declare the policy void. We do not think that Filmore v.Metropolitan Life Ins. Co., 82 Ohio St. 208, 92 N.E. 26,28 L.R.A. (N.S.), 675, 137 Am. St. Rep., 778, has any application to the instant case for the reason that it holds that a beneficiary under circumstances like those at bar, cannot recover when the death is caused by an intentional and felonious act of the beneficiary. There is no contest upon this point in the instant case because it is conceded that the beneficiary under no circumstances can recover.

Is is our judgment that, unless otherwise provided by the by-laws or the policy, fraternal insurance policies do not lapse solely because the beneficiary caused the death of the insured, and in such a case it is our judgment that a resulting trust arises in favor of the dependents, and, under Section 9394, General Code, it appears to us that the guardian of the minor children has a legal foundation for the claim she makes in this record.

Holding these views, the judgment of the lower court is hereby affirmed.

Judgment affirmed.

VICKERY, P.J., concurs.

LEVINE, J., not participating.