The MacCabees v. Lipps

¹⁹² Collins, J., delivered the opinion of the Court. The Supreme Lodge of the Fraternal Home Insurance Society, a corporation of Philadelphia, Pennsylvania, on the eighteenth day of December, 1917, as a result of an application filed by John T. Lipps of Frederick, Maryland, at Frederick, Maryland, as a member of the Frederick Lodge, issued an ordinary life benefit certificate to the said John T. Lipps in the amount of $1,000, payable at his death to his father, Thomas S. Lipps, subject to such limitations, privileges and conditions as were contained in its constitution and by-laws. The said John T. Lipps paid the premiums on this certificate until November, 1932, when he handed the certificate to his sister, Ada Lipps, and told her that it was to be hers and his brother’s, Walter Lipps, if they paid the premiums on it and kept it up, as he could not keep it up and was not able to pay them any longer. He also told her that the beneficiary was not to be changed until after his father’s death as he wanted his father to have the money if he predeceased his father, and if his father died before Ada and Walter Lipps died, that Ada and Walter were to be named beneficiaries.

In December, 1937, the father, Thomas Lipps, died. Some time between the date of the issuance of the certificate in 1917 and the date of the father’s death, the Supreme Lodge of the Fraternal Home Insurance Society, which originally issued the certificate, was absorbed by the Maccabees, a body corporate of the State of Michigan. Shortly after the father’s death, the said John T. Lipps signed a formal application with the Maccabees requesting a change of the beneficiaries to the said Walter Lipps and Ada T. Lipps, as provided for in the by-laws of that organization. On February 9, 1938, the change of beneficiary to Ada Lipps and Walter Lipps was approved by the Maccabees in accordance with its by-laws.

The brother and sister continued to pay the premiums on the policy until November 6, 1940, when the said John T. Lipps died and when they would have been paid ¹⁹³ the SI,000 provided for in the certificate if a claim to the fund had not been made by the Grand Lodge of Maryland of the Independent Order of Odd Fellows, a body corporate, hereinafter referred to as the Odd Follows or appellant. The claim of the Odd Fellows was that on November 22, 1933, the said John T. Lipps, being in poor health and unable to work, signed an application with the appellant for admission to its home at Frederick, Maryland, maintained for the purpose of caring for orphans and aged members of the Odd Fellows Lodge. This Home is a very comfortable one and is kept up largely by dues from members of appellant corporation. In the application for admission, he stated that he had made no transfers of any property, either real or personal, or life insurance within the past five years.

He stated that he held membership in the Knights of Pythias and in the Order of Red Men. On January 19, 1934, he was admitted to the Odd Fellows’ Home, was told by a member of the Board of Directors that he was now in the Home and that he was to give to the home everything he had or everything he may hereafter have, that they would take care of him, provide for him in health and sickness and see that he was decently buried. At that time John T. Lipps signed a paper in which he provided that he did sell, assign and transfer unto the Grand Lodge of Maryland I. O. O. F., Inc., “all my real and personal estate of whatever kind or nature, or wheresoever the same may now be situated, or which may hereafter belong to or found to be owned by or belong to me * * * or any sick, funeral, death benefits and life insurance.” After his admission to the Home and the execution of the assignment, he was questioned several times by a member of the board as to whether he had any life insurance policies other than those he had turned over to the Odd Fellows. He said that he did not have any thousand-dollar life insurance policy and never did have one.

At the time of his death ¹⁹⁴ in the Odd Fellows’ Home in Frederick, where he had been well cared for since 1934 and given spending money, an official of the home found a piece of paper in his pocket from the Maccabees and, as a result, the board of the home notified the Maccabees and sent it a copy of the assignment which John T. Lipps had made to it and made claim for the $1,000 provided for in the policy. As a result of the conflicting claims, Ada Lipps and Walter Lipps, appellees on one hand, and the appellant on the other, the Maccabees filed a bill of interpleader in the Circuit Court for Frederick County in which it stated that it was unable to decide between the conflicting claims and, while ready and anxious to pay or hold the amount of said certificate for the rightful parties, in view of the conflicting claims, it tendered to pay the amount of the same into court for determination as to whom it rightly belonged and asked that the parties to the conflicting claims be made to interplead. An order was passed requiring the appellant and appellees to interplead, the Odd Fellows as plaintiffs, and Walter and Ada Lipps, as defendants. A bill of complaint was then filed by the Grand Lodge of Maryland of the Independent Order of Odd Fellows, a body corporate vs. Walter Lipps and Ada Lipps setting forth the facts above stated and alleging fraud and asking that it be awarded the proceeds of the policy.

An answer was filed by Walter and Ada Lipps stating, among other things, that they had no knowledge of any claim of the Odd Fellows by way of an alleged assignment and asking that the amount of the policy be awarded to them as the named beneficiaries in the certificate. After testimony was taken, partly before an examiner and partly in open court, the chancellor dismissed the bill of complaint of the Odd Fellows and decreed that the proceeds of the insurance policy, after payment of costs, be paid to Ada T. Lipps and Walter Lipps in equal amounts. An appeal is taken to this court by the Odd Fellows from that decree. ¹⁹⁵ Appellant contends that, as the Maccabees is a Michigan corporation, the law of Michigan should control. Supreme Council v. Brashears, 89 Md. 624, 631 , 43 A. 866 ; Supreme Council Royal Arcanum v. Green, 237 U. S. 531, 541, 542 , 59 L. Ed. 1089 ; Modern Woodmen v. Mixer, 267 U. S. 544, 551 , 69 L. Ed. 783 .

It is further contended that under that law, a promise to pay assessments and dues under a policy of benefit insurance, if promisor was made beneficiary, was not sufficient to create in the promisor a vested interest in the certificate and fund or limit the right of the insured to change his beneficiary at pleasure. Modern Brotherhood v. Hudson, Supreme Court of Michigan, 194 Mich. 124 , 160 N. W. 406 . In the present case the original contract was executed by a Pennsylvania corporation at Philadelphia and signed by John T. Lipps at Frederick, Maryland. There is nothing in the evidence to show where the last act was performed that made this a binding contract.

These facts cannot be presumed. Mutual Life Insurance Company v. Mullan, 107 Md. 457, 463 , 69 A. 385 ; Sun Insurance Office v. Mallick, 160 Md. 71, 81 , 153 A. 35 ; Restatement, Conflict of Laws, par. 317, 318, 319. It is well settled that a contract of membership in a mutual association includes the constitution and by-laws of the association, whether they are especially referred to in the contract or not. Yoe v. B. C. H. Ass’n, 63 Md. 86 ; Fuller v. B. & O. E. Relief Ass’n, 67 Md. 433 , 10 A. 237 ; Royal Arcanum v. Brashears, 89 Md. 624, 634, 635 , 43 A. 866 .

The original certificate in this case specifically refers to the limitation, privileges and conditions as contained in the constitution and by-laws. The bylaws provide: “* * * any benefit member may direct any benefit to be paid to his estate or to any person or persons, entity or interest, except as limited by the laws of the State or Province under which the certificate is issued; * * It was said in the case of Universal Credit Company v. Marks, 164 Md. 130 , at page 142, 163 A. 810, 814 , which is applicable here: “The law of ¹⁹⁶ Maryland, however, is prima facie the law to be applied, and, if the seller or its assignee wishes the benefit of the law of another jurisdiction, the burden is on it to prove the