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One of these agreements is that on substan-, for such company to receive from the astial proof of his death the association will sured an affidavit setting forth the facts in pay to his wife, Fannie E. Filley, or her the case; and, if it shall appear from such legal representatives, the net proceeds of affidavit that the affiants have paid the anone full assessment, less the 10 cents cost of nual premium, and intended thereby to incollection, at schedule rates, upon all mem- sure for the benefit of the person named in bers of good standing at the date of his the policy as beneficiary, that such policy death until such assessment shall exceed has not been assigned or transferred, and $1,500. Then the assessment shall be for nominates or appoints some other benefian amount in pr ortion to the policy ciary, "it shall then be the duty of said held by each, not exceeding schedule rates, insurance company to take up and cancel and to an amount not to exceed $3,000. said policies, at the request of said assured, Further, that, should the insured live to and issue in like terms another policy or the age of sixty-four years and then choose policies upon the life or lives of said into surrender the policy, the association sured for the benefit of the beneficiary in would pay to him the amount he had paid said affidavit nominated.” Gen. Stat. 1909, into the treasury on account of death and $ 4144. Of course, this does not in terms expectation assessments, less the 10 cents cover the present situation, for here the cost of collection, with 4 per cent interest, insured instead of the beneficiary died first. “provided that no assessments for the pur. But the principle involved is analogous to pose of paying this expectation indemnity the one under consideration touching the shall exceed the regular death assessment, right to change beneficiaries. This section and provided further, that in no case shall was thoroughly considered in Olmstead v. the payment upon this policy exceed $3,000, Masonic Mut. Ben. Soc. 37 Kan. 93, 14 Pac. and it is further agreed by the association 449. In that case a Kansas co-operative that all moneys collected by assessment society, organized to give financial aid and aforesaid (less the cost of collection) shall benefit to the widows, orphans, and depend. be applied to the adjustment of those ents of deceased members, issued a certificlaims only.”

cate to David D. Olmstead in 1874, by Among the special conditions named in which his beneficiaries were to be entitled the policy is the following: “The associa- at his death to a sum not exceeding $2,000, tion may classify its membership for the if certain rules and agreements were compurpose of assessments when it shall appear plied with; the express agreement being expedient, in which case members shall that the benefit should be paid to Jennett only be assessed to pay benefits in their Olmstead, his wife, or her legal representaown class.”

tives. In August, 1884, the insured died. The schedule rates already referred to, Shortly before he had made a will by which on which assessments were to be based, are he attempted to bequeath the benefit in expressly named and classified according to question to his children, and to the execuage.

tor for the payment of certain debts and The provision permitting the assured, items of expense. During his life Mr. Olmafter reaching the age of sixty-four years, stead retained possession of the certificate to surrender and settle for cash, we regard and kept the fees and assessments paid. No as a condition subsequent. The policy as- affidavit was filed and no other certificate sured the payment to the beneficiary, con- was issued to take the place of the original. ditioned of course on the payment by the The executor sued, and the company insured of all the assessments and demands. brought the money into court and asked Should the insured live to be sixty-four that the legal representatives and heirs of and then choose to surrender the policy and Jennett Olmstead be made parties. It was take the cash proceeds instead of allowing held that the plaintiff could not recover. the insurance to continue, he could do so; It was said (p. 96) that, however well the double contingency, his age and his founded the distinction may be between choice, having been reached, and thus the old line and benefit companies and policies, subsequent condition having been met. 2 the beneficiary can only be changed and the Words & Phrases, 1401.

benefit transferred to another in the manner Section 76 of the act of 1871 (Gen. Stat. prescribed by the rules and the regulations 1889, $ 3400; Gen. Stat. 1909, § 4144) pro- of the society, and in accordance with the vides that in case any life insurance com- terms of the contract. pany organized under the laws of this state “The contract in this case specifically issues any policy of insurance upon the provided that the benefit should be paid to life of any person or persons for another's the wife of the member, or to her legal repbenefit, and such beneficiary dies during resentatives. The addition of the words the lifetime of the person or persons whose legal representatives' clearly imports that, life or lives are assured, it shall be lawful in case of her death, the benefit should be


paid to her heirs or next of kin who fall | adjustment included the beneficial interest within the classes mentioned in the charter under this policy. Not only do we think to whom aid may be given. Thus, the con- reason and the weight of authority favor tract fixed and limited the persons who the theory that when he took out the policy might receive the benefit.

No pro- he contemplated no divorce or remarriage, vision was made in the certificate of mem- but that at all events he entered into a conbership for a change in the beneficiary, and tract which left him without power to change the record does not show what rules, if any, the beneficiary. Indeed, there is no evithe society had made respecting such dence that he ever dreamed of the benefit change.” 37 Kan. 96.

going other than as provided in the policy. It was further held that, the statute hav- It must be presumed that the divorce was ing provided one way to change the benefi- obtained legally, and a legal proceeding ciary, no other was intended, and that the cannot be deemed to abrogate an existing insured had no interest in the benefit aris- contract in nowise involved in such proceeding from his membership; that it could in ing. The rights of the company, the insured, no event become a part of his estate; hence and the beneficiary became fixed upon the he could not bequeath it. This decision issuance of the policy, and they cannot be has been referred to with approval in held to have become impaired by orderly Kemper v. Modern Woodmen, 70 Kan. 119, litigation occurring afterwards over other 78 Pac. 452; Pilcher v. Puckett (Modern matters. Woodmen v. Puckett), 77 Kan. 284, 17 The language of the policy, "his wife, L.R.A. (N.S.) 1083, 94 Pac. 132; Boise v. Fannie E. Filley,” is plain enough without Shepard, 78 Kan. 308, 96 Pac. 485; Modern resort to technical rules of grammar. We Woodmen v. Comeaux, 79 Kan. 493, 25 do not think the average man could err in L.R.A.(V.S.) 814, 101 Pac. 1, 17 Ann. Cas. understanding its meaning, and we are con865; and cited in Hunt v. Remsberg, 83 tent with the clearness thus apparent on Kan, 665, 32 L.R.A.(N.S.) 246, 112 Pac. the face of the instrument. 590, 21 Ann. Cas. 1267.

The same

The indorsement on the outside of the soning must apply here. There is nothing policy, “Clarence E. Filley in favor of his in the statute or policy, and nothing shown wife,” is not sufficiently significant of the in any charter or by-laws, authorizing the real contract inside to control or modify insured to change the beneficiary or to the terms thereof. transfer the benefit, in which he had no But it is insisted that, when the original interest and which could not become a part beneficiary ceased to be the wife, the condiof his estate save upon condition subse- tion subsequent contained in the policy by quent, as already shown. Although he was which the insured could, at sixty-four, sura member of the association, which at the render and receive his payments with intime issued policies to none but members, terest, rendered it to her interest to hasten still the policy evidenced the contract be- his departure, and therefore placed matters tween the association and him, made for the in an unlawful condition; it appearing that benefit of another on sufficient considera- Fannie E. Filley makes no claim here on tion, and no authority appears by which account of the decree of divorce. Counsel the member could change the terms or im- correctly argue that a divorce ends the repair the obligation of such contract. lation of husband and wife, and this is fol

But it is contended that the subsequent lowed by the suggestion that it would be divorce destroyed the status of wife, and against public policy to allow one to be a that the remarriage of the insured brought beneficiary in a policy of insurance upon about a relationship and condition demand- the life of the other. The case of Hatch ing a change of beneficiary from the first to v. Hatch, 35 Tex. Civ. App. 373, 80 S. W. the second wife, and that it was the woman 411, is in some respects similar to the one who should be his wife at death that he at bar, and the decision to quite a degree really intended as the beneficiary. It is supports counsel's contention. Riley v. Riremarkable that Mr. Filley continued to ley, 75 Wis. 464, 44 N. W. 112, was decided pay all sums required by the terms of the chiefly on the effects of the by-laws. Order policy after the divorce, after the remar- of R. Conductors v. Koster, 55 Mo. App. riage up to his death, with no attempt to 186, holds that a benefit certificate speaks change the policy or the beneficiary. It with reference to the conditions existing at would seem a natural inference that he the death of the member, and that when made no such attempt because he had no the by-laws require the beneficiary to have desire to, or else because he knew he could | an insurable interest, and the certificate not succeed. It would appear from certain designates the beneficiary mainly by the restatements in the briefs that he adjusted lationship of wife, her rights lapse. This certain financial matters with his first wife, also supports the theory contended for. In and yet we hear no suggestion that such Tyler v. Odd Fellows' Mut. Relief Asso.



145 Mass. 134, 13 N. E. 360, the by-laws re- of the policy were not payable to Mr. Filley, quired the beneficiaries to be heirs or mem- but to his wife, Fannie E. Filley, and the bers of the decedent's family, and it was fact that she had been his wife many years quite naturally held that a divorced wife and had borne him children made the cirwas neither. In Goldsmith v. Union Mut. cumstances quite different from those in L. Ins. Co. 18 Abb. N. C. 325, 41 Hun, 641, the Sturges Case, and we cannot regard the 2 N. Y. S. R. 610, the insured sued to re- decision as either applicable or controlling. form a policy upon his life "for the sole Whatever the character of the Illinois and separate use and benefit of his wife, Life Insurance Company, its contract atLina Goldsmith; but in case of her previ- tached to the policy simply subrogates it to ous death, to revert to the insured” (p. the rights, liabilities, and obligations of 328), and it was held that the agent who the Kansas Mutual Company, and it agrees acted as scrivener or amanuensis for the to assume and carry out the provisions of insured did not word the policy so as to ex- the policy as provided in a certain propopress the intention of the latter that his sition “to assume and reinsure the policies" wife should have the insurance if his wife of that company. Having paid the money at his death. The court also thought this into the court for the benelit of the claimthe real effect of the words used, and the ant found to be entitled thereto, it is not matter was held in abeyance until the find- necessary to consider further the nature of ings could be produced and examined to see the Illinois Life Insurance Company's charif they would support a judgment in fa- ter or contract. vor of the plaintiff.

For the reasons hereinbefore set forth, But the authorities opposing counsel's the result of the two former decisions (91 view are numerous and convincing and im- Kan. 220, ante, 137 Pac, 793; 93 Kan. 193, press us as much more in accord with the ante, 144 Pac. 257) must stand. Whatright and reason of the matter. Among ever may be found in either of them inconthese may be mentioned Wallace v. Mutu. sistent herewith may be regarded as al Ben. L. Ins. Co. 3 L.R.A. (N.S.) 478, and punged. note (97 Minn. 27, 106 N. W. 84); note in The motion for a second rehearing is de49 L.R.A. 749; Overhiser Overhiser nied. (Overhiser v. Mutual L. Ins. Co.) 63 Ohio St. 77, 50 L.R.A. 553, 81 Am. St. Rep. 612,

All the Justices concur. 57 N. E. 965; White v. Brotherhood of American Yeomen, 124 Iowa, 293, 66 L.R.A. 164, 104 Am. St. Rep. 323, 99 N. W. 1071, 2 Ann. Cas. 350, and note 351; McGrew v.

Mutual L. Ins. Co. 132 Cal. 85, 84 Am. St.

Rep. 20, 64 Pac. 103; Connecticut Mut. L.
Ins. Co. v. Schaefer, 94 U. S. 457, 24 L. ed.

W. H. MCINTYRE COMPANY, 251; Bacon, Ben. Soc. § 253; 25 Cyc. 889.

It must be remembered that we have a CITY NATIONAL BANK OF AUBURN, case in which there appears no provision

INDIANA, Interpleader. for a change of beneficiary, and no desire to make a change, but a continuance of pay.

(93 Kan. 508, 144 Pac. 1002.) ments after the divorce the same as before.

draft collection The decision in Missouri Valley L. Ins. Co. Bills and notes

right to proceeds. v. Sturges, 18 Kan. 93, 26 Am. Rep. 761, is

Where a draft, with a bill of lading atcited. It was held there that one, to take tached, is delivered to the bank in whose

purchase or assignment an insurance on favor it is drawn, which forwards it to a another's life, must have an interest in such correspondent for collection, and gives imlife. Haynes took out a policy on his own mediate credit to the depositor, the prolife for $2,000 and afterwards assigned it ceeds, while in the hands of the correspondto Sturges, who had no interest in his life. ent bank, are to be regarded as belonging The company assented, and Sturges contin to the payee named in the draft, as against ued the payment of the premiums. The a creditor of the depositor who attempts to

reach them by garnishment, after the accourt said the contract amounted to a bet count, as increased by the deposit, has been for each year that the insured would not live overdrawn, and this notwithstanding the the year out, but, “where such contracts are associated with beneficent and modifying Headnote by MASON, J. circumstances (as many insurance contracts

Note. - See notes to Fayette Nat. Bank are supposed to be) making them beneficial

Summers, 7 L.R.A. (N.S.) 694, and to society, they are generally upheld, not- Plumas County Bank v. Bank of Rideout, withstanding their wagering characteris- 1 S. & Co. 47 L.R.A.(N.S.) 552, as to title ties." 18 Kan. 95. But here the proceeds to paper credited to depositor.


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practice of the first-named bank to charge v. Oklahoma State Bank, 83 Kan. 504, 33 its depositor with the interest on such L.R.A.(N.S.) 954, 112 Pac. 114; Ladd & T. items from the time of giving credit until Bank v. Commercial State Bank, 64 Or. 486, the proceeds were actually received, and to 40 L.R.A. (N.S.) 657, 130 Pac. 975; Alexcharge back their amount in the event of ander Smith & Co. v. First Nat. Bank, 140 non payment, and notwithstanding that a serial number was placed on said draft by Ga. 266, 78 S. E. 1071; National Bank v. the original bank in sending it out for col. Everett, 136 Ga. 372, 71 S. E. 660. lection, and that a witness testified to a Mr. B. F. Scandrett also for appellee. general practice of bankers to place such numbers upon items received for collection, Mason, J., delivered the opinion of the but not upon those accepted as cash.


On November 17, 1911, the W. H. Mc. (December 12, 1914.)

Intyre Company drew a draft for $3,412.50 upon

Charles D. Scott, of Topeka, payable A

PPEAL by plaintiff from a judgment of to the City National Bank of Auburn, In

the District Court for Shawnee County diana, and delivered it to the bank, with in favor of interpleader in a garnishment | a bill of lading attached. The bank sent proceeding to reach the proceeds of a draft the draft to a Topeka bank for collection. in satisfaction of a debt of the drawer. Scott paid the draft November 27th, and on Affirmed.

the same day brought an action against The facts are stated in the opinion. the McIntyre Company for $1,955, garnishMr. Eugene S. Quinton, for appellant: ing the Topeka bank, which filed an answer

The draft deposited for collection and setting out the facts, and stating that it credited to the depositor's account was not held the proceeds of the draft subject to the property of the bank.

the order of the court. Service by publicaMorse, Banks & Bkg. p. 427; Downey v. tion was made upon the defendant, which National Exch. Bank, 52 Ind. App. 672, 96 made no appearance, and judgment was N. E. 403; Armour Packing Co. v. Davis, taken against it. The Auburn bank inter118 N. C. 548, 24 S. E. 365; Beal v. Somer- pleaded, claiming to be the owner of the ville, 17 L.R.A. 291, 1 C. C. A. 598, 5 U. money in the hands of the Topeka bank, S. App. 14, 50 Fed. 647; Scott v. Ocean which was paid into court to await the reBank, 23 N. Y. 289; Levi v. National Bank, sult of the litigation. The plaintiff filed 5 Dill. 104, Fed. Cas. No. 8,289; Alpine a denial of the allegations of the interplea, Cotton Mills v. Weil, 129 N. C. 452, 40 and a jury was impaneled to try the issue. S. E. 218; Armour Packing Co. v. Davis, Evidence was taken, and the court directed 118 N. C. 548, 24 S. E. 365; Boykin v. Bank a verdict for the interpleader, upon which of Fayetteville, 118 N. C. 506, 24 S. E. judgment was rendered. The plaintiff ap357; Fayette Nat. Bank v. Summers, 105 peals. Va. 689, 7 L.R.A.(N.S.) 694, 54 S. E. 862; The evidence as to the transactions be. National Gold Bank & T. Co. v. McDonald, tween the McIntyre Company and the Au51 Cal. 64, 21 Am. Rep. 697; National burn bank was in the form of depositions. Commercial Bank v. Miller, 77 Ala. 168, 54 It was uncontradicted, and must be deemed Am. Rep. 50.

to have established these facts: The draft Messrs. Robert W. Blair, Charles A. was delivered to the bank by the company Magaw, and Thomas M. Lillard, for ap- in the usual course of business, and, in pellee:

accordance with custom, credit was at once Whether the money in the hands of the given to the company on the books of the Merchants National Bank at the time the bank and in the pass book of the company, garnishment summons was served on it be whose account was at the time overdrawn longed to McIntyre Company or to the City in the sum of $2,070.44. Five days later it National Bank of Auburn is a question of was again overdrawn. The practice was for law for the court.

the bank to accept such drafts, send them Kemp v. Chicago, R. I. & P. R. Co. 91 | out for collection, credit the company at Kan. 477, 138 Pac. 621.

once with their face, and, when the re. Possession of the draft and bill of lading turns were received, charge the company was prima facie evidence of ownership. with interest to that time; the understand

Mann v. Second Nat. Bank, 34 Kan. 746, ing being that, if payment should be refused 10 Pac. 150; O'Keetfe v. First Nat. Bank, in any instance the amount of the item 49 Kan. 347, 33 Am. St. Rep. 370, 30 Pac. should be charged back to the depositor. 473; Halsey v. Warden, 25 Kan. 128; Various assignments of error are made, Means v. Bank of Randall, 140 U. S. 620- but the case turns upon the question wheth627, 36 L. ed. 1107-1110, 13 Sup. Ct. Rep. er the title to the draft and its proceeds 186; Dows v. National Exch. Bank, 91 U. S. at the time of the garnishment was in the 618, 23 L. ed. 214; Central Mercantile Co.'Auburn bank, or in the MeIntyre Company; whether the bank took the draft as a pur- , dorsement, but, however evidenced, it should chaser, or for collection. There is much not militate against the theory of a passing apparent and considerable real conflict in of the title. The fact that the depositor the decisions bearing on the matter. They has guaranteed the payment of a draft with are collected in notes in 7 L.R.A. (N.S.) a bill of lading attached should not prevent 694, and 86 Am. St. Rep. 782. The gen- the bank from holding the goods or their eral rule has been thus stated: “Prima proceeds, and looking first to them, as facie, according to the weight of authority, against the depositor or any claimant unthe passing to the credit of the depositor, der him, such as an attaching creditor. of a check bearing an indorsement not in- See Shafier Bros. v. Rhynders, 116 Iowa, dicating that it was deposited for collection 472, 89 N. W. 1099; German Nat. Bank v. merely, passes the title to the bank. Still, Grinstead, 21 Ky. L. Rep. 674, 52 S. W. 951. according to the weight of authority, the Some of the conflict in the decisions bearrule above stated is not an absolute rule, ing upon the general aspects of the question and is prima facie merely, and yields to the can be accounted for by differences in the intention of the parties, expressed or im- facts, and the manner in which the issue of plied from the circumstances.” 3 R. C. L. ownership has been raised, but in some in524.

stances the divergence is due to the atti. See also Noble v. Doughten, 72 Kan. 336, tude taken as to the effect of giving imme. 3 L.R.A.(N.S.) 1167, 83 Pac. 1018.

diate credit to the depositor. An extended In Beal v. Somerville, 17 L.R.A. 291, 1 review of the authorities is not thought C. C. A. 598, 5 C. S. App. 14, 50 Fed. 647, necessary. Here we regard the result as which in one of the notes referred to (7 controlled by the circumstances that the L.R.A. (N.S.) 694, 700) and which is classed depositor not only received credit for the with the minority decisions, it was held amount of the draft, but actually drew that the right of the bank to charge back upon it, and used the full amount. When the item to the depositor in the event of the item was deposited, the account of the its nonpayment is inconsistent with the McIntyre Company was overdrawn. The hypothesis that title thereto had passed to credit operated at once to offset the dethe bank. This view has been adopted in a positor's debt to the bank. Before the garnumber of cases, of which Armour Packing nishment summons issued, the account was Co. v. Davis, 118 N. C. 548, 24 S. E. 365, is again overdrawn, and the credit thereby typical. It has been denied in others, ex- exhausted. In this situation the McIntyre amples of which are: Auto & A. Mfg. Co. Company could not successfully have as1. Merchants' Nat. Bank, 116 Md. 179, serted a claim to the draft or its proceeds 81 Atl. 294; American Trust & Sav. Bank against the Auburn bank, and the attachv. Gueder & P. Mfg. Co. 150 Ill. 336, 37 ing creditor could gain no higher rights N. E. 227; and Fourth Nat. Bank v. Mayer, than were possessed by the defendant. $9 Ga. 108, 14 S. E. 891.

Ladd & T. Bank v. Commercial State Bank, Of the Beal-Somerville Case one of the 64 Or. 486, 49 L.R.A. (N.S.) 657, 130 Pac. text-writers says: “This last is the only 975. In Perth Amboy Gaslight Co. v. able examination of the matter that has Middlesex County Bank, 60 N. J. Eq. 84, been made. It expressly disapproves 2 45 Atl. 704, which leans to the view favor. Morse, Banking, 896.” Zane, Banks & ing the theory of a bailment, rather than a Bkg. § 133, p. 211, note 14.

purchase, where a draft is deposited for Another says of it: “The court lays much credit, the court says: “If a depositor deweight on the fact that the indorsement was posits a check or draft on a third party 'for deposit,' which was held, erroneously, with the understanding, either expressed or it is submitted (ante, note 64), to import implied, that he is to draw against it at a bailment, with the result that it rested once as if it were cash, and the bank agrees on the bank to support affirmatively a claim to accept it and treat it as cash, and the that on the deposit it became an owner of depositor draws against it before the the check.” Tiffany, Banks & Bkg. § 11, amount is realized by the bank, then it is p. 38, note 82.

properly treated as a deposit of cash. Or, We cannot regard the right of a bank re- if the depositor is already indebted to the ceiving a draft for deposit to charge the bank, and the deposit is received in whole amount back to the depositor if payment is partial payment, the

result refused, as having a determining influence. follows." p. 91. Such a right on the part of the bank would In National Bank v. Everett, 136 Ga. seem to be an ordinary incident even of a 372, 71 S. E. 660-an attachment casedeposit which is accepted as cash. The this lar uage was used: “The evidence distransaction is based upon the supposition closes that at the time of the deposit the that the draft is going to be paid. A guar. drawer had overdrawn its account, and the anty of payment often results from the in-' deposit was entered as cash to its credit;



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