#### SMITH v. SUPREME COUNCIL ROYAL ARCANUM.

(November 7, 1900.)

1. Insurance — Benefit Certificate — Surrender.

A requirement in an insurance policy that the policy be surrendered before payment, is met by satisfactorily accounting for the same.

2. Insurance — Admissions.

Where an insurance company fails to set up by way of defense that the insured ever requested or desired a change of •beneficiary in the policy, it must be taken as an admission that no such change was made known to them by the assured.

3. Insurance — Assignment—Beneficiary.

A person having an insurance policy in possession — not being named beneficiary therein — has no interest in the policy, it not having been assigned to him. •

Civil Actiow by B. N. Smith against Supreme Council of Royal Arcanum, beard by Judge W. A. Uolce and a jury, at Fall Term, 1900, of Guilford Superior Court. Erom judgment for plaintiff, both parties appealed.

Scales & Scales, for plaintiff.

Chas. M. Steadman and W. II. Day, for defendant.

Plain tiff's Appeal.

MONTGOMERY, J.

At the time of his death, Flavius Bing-ham Smith was insured in defendant company; the beneficiary named in the policy being the plaintiff, the father of the insured. Proofs of death were properly made out and received by the company, demand was made by the plaintiff for the amount of insurance, payment was refused, and this *139action was brought to recover it. The only defense set np in the answer is that the plaintiff failed, and still fails, to surrender to the defendant the policy of insurance — the benefit certificate; the said certificate containing a provision in these words: “These conditions being complied with, the Supreme Council of the Koyal Arcanum hereby promises and binds itself to pay out of the widows and orphans’ benefit fund to B. N. Smith a sum not exceeding three thousand dollars, in accordance with and under the provisions of the laws governing said fund, upon satisfactory evidence of the death of said member, and upon the surrender of this certificate.” Among other averments in the answer is one to the effect that the defendant is now, and always has been, ready to pay the amount of the policy, upon the production and delivery of the said certificate. It is further set out in the answer that the policy of insurance is in the hands of Annie J. Smith, the widow of the insured, and that she claims to be the beneficiary and entitled to the insurance, and has made demand upon the defendant for payment, offering to surrender the policy upon payment to her of the amount of insurance. The plaintiff admitted that he did not have possession of the benefit certificate. The following issues were submitted to the jury: “(1) Was the benefit certificate mentioned in the complaint in the possession and control of Annie J. Smith, widow of the insured, or in possession and control of any one for her, at the time this action was commenced ? And is it still in her possession and control, in the State of Virginia, and is she now making claim against the company on said policy? (2) Has defendant company waived production of policy and certificate required by its terms before bringing suit? (3) Has plaintiff the present right to recover of defendant this amount of said certificate and policy, to-wit, three thousand dollars and interest from March 1, *1401898 ?” And at tbe conclusion of tbe evidence bis Honor directed tbe jury, if they believed tbe evidence, to answer tbe first issue, “Yes;” tbe second, “No;” and tbe third, “Yes; to be paid out only on tbe further order of court.” Tbe plaintiff excepted to these instructions, and then moved for a judgment non obstante veredicto, and tendered a judgment absolute for $3,000 — tbe amount of tbe policy, interest, and costs —which bis Honor declined. There were other grounds of alleged error set out by tbe plaintiff — among them, one that tbe Court directed tbe jury to answer tbe third issue, “to be paid out only on further order of tbe court.” There is no error pointed out in this appeal, except in tbe qualifying part of the instruction of bis Honor to tbe jury to respond to the third issue, “Yes; to be paid out only on tbe further order of tbe court-,” tbe incorporation of that feature of tbe verdict into tbe judgment, and tbe requirement of tbe clerk to cause notice to be given by publication to Annie <T. Smith to come in and establish her claim, if she has any, to tbe fund. If the answer of tbe defendant is carefully read, it will be seen that tbe defendant does not make any averment that tbe insured bad ever directed that a new certificate be issued to him by tbe company, in which tbe beneficiary was to be changed to Annie J. Smith, bis wife, instead of tbe original beneficiary, tbe plaintiff, bis father. Section 333 of the defendant’s constitution and by-laws allowed a member, upon tbe payment of a small fee, to make a written surrender of bis benefit certificate, upon which be would receive a new certificate, payable to such beneficiary as tbe member might designate. Tbe written surrender, under sec. 334, was required to be forwarded, under seal of tbe council, to -the supreme secretary, and sec. 335 declared that parol evidence of a member’s intention or desire to change bis beneficiary must be disregarded. Section 337 declares that tbe change of tbe bene*141ficiary shall take effect upon the delivery of the benefit certificate, the written surrender, and direction for change. The defendant issued the policy, the plaintiff being named beneficiary therein; and the defendant does not set up in its answer any matter going to show that the assured ever had expressed any desire or made any request, either verbal or in writing, to change the beneficiary, or ever had surrendered, or ever offered to surrender, the benefit certificate for the purpose of having the beneficiary changed. The company knows better than anyone else whether the insured ever requested or desired a change of beneficiary in the policy, and, not setting up such matter of defense in the answer, it must be taken as an admission that no such change or desire of change was ever made known by the assured to the company. Besides, under the constitution and by-laws, Annie J. Smith, the widow, could have no interest in the policy, because she still holds it, and there never has been any change of beneficiary, and the constitution and by-laws forbid any assignment of the policy. Section 327. So the plaintiff is entitled to a judgment absolute for the amount named in the benefit certificate, unless that feature of the same which requires of the plaintiff the surrender of the original certificate is a barrier to his recovery. We are of the opinion that that requirement is not to be taken in its absolutely literal sense. Those words are to be construed reasonably, justly, equitably. If the policy had been lost or burned since the death of the insured, surely upon proof of that the terms of the contract would be met. So in this case the policy is accounted for, just as if it had been burned or lost. It is in the hands of tlie widow of the insured, who doubtless, got possession of it after the death of her husband, and in her hands it is as harmless as if it had been lost or destroyed. Under the constitution and by-laws of the company, it can not be made to pay -the *142loss to Mrs. Smitb. Tbe plaintiff was entitled to a judgment absolute.

Modified and affirmed.

Depend NT's Appeal in Saue Action.

Eor tbe reasons set out in tbe plaintiff’s appeal, there appears no error in tbe proceedings in this action of which tbe defendant can complain.

No error.