Clark v. Supreme Council Royal Arcanum

• Decision Date: 02 July 1900
• Citation: 176 Mass. 468,57 N.E. 787
• Parties: CLARK v. SUPREME COUNCIL, ROYAL ARCANUM, et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

176 Mass. 468

57 N.E. 787

CLARK v. SUPREME COUNCIL, ROYAL ARCANUM, et al.

Supreme Judicial Court of Massachusetts, Suffolk.

July 2, 1900

COUNSEL

Moulton Loring & Loring, for plaintiff.

W. H Preble and F. B. Hemenway, for respondents Morris Clark et al.

John Haskell Butler, for respondent Royal Arcanum.

OPINION

LATHROP J.

The plaintiff's husband, according to the bill, had taken out a benefit certificate in a fraternal neneficiary society, in which, as both sides assumed at the argument, the children of the husband by a former marriage were named as beneficiaries. Her husband promised the plaintiff to transfer this certificate to her. Subsequently, relying on the assurance that it had been transferred, she paid assessments on the certificate from September 1, 1892, to January 30, 1899, to the amount of $330, and also at different times from June 5 1892, to January 30, 1899, paid to him, or on his account money to the amount of $5,000. The bill further alleges that, under the laws of the first-named defendant, the death benefit could have been made payable to her, and that the failure and neglect of her husband to make the certificate payable to her, and the statement that it was so payable, and the inducing her thereby to pay over to him and for his benefit the sum of $5,000, and to pay his dues and assessments, and to keep up his membership by making said payments, was a fraud upon her. The bill prays that the death benefit shall be made payable to her, and that the first-named defendant shall pay to her the benefit fund, or that it may be decreed that said defendant or the other defendants shall repay to her, out of said fund, the amount of assessments she has paid.

A majority of the court is of opinion that the bill cannot of maintained. So far as paying the assessments is concerned, it has been held that one who pays assessments at the request of the holder of a benefit certificate has no right in equity to have them repaid out of the fund. Order of Golden Cross v. Merrick. 163 Mass. 374, 40 N.E. 183; Clarke v. Schwarzenberg, 164 Mass. 347, 348, 41 N.E. 655. Moreover, the policy of our law is that no contract shall be valid or legal which is conditioned upon an agreement or understanding that the beneficiary shall pay the dues or assessments, or either of them, for a member of a fraternal beneficiary corporation. St. 1888, c. 429, § 8; St. 1894, c. 367, § 8; St. 1898, c. 474, § 8. Apart from this, a death-benefit fund is, under our laws, a peculiar species of property. It is not liable to attachment by trustee or other process, and cannot be seized, taken, appropriated, or applied by any legal or equitable process, nor by operation of law, to pay any debt or liability of a certificate holder, or of any beneficiary named therein. St. 1888, c. 429, § 15; St. 1894, c. 367, § 14; 1898, c. 474, § 17.

It is also to be considered that the dues and assessments have not been contributed to the death fund which it is sought to reach in this case. These dues and assessments have been paid to raise funds which paid the death benefits of other members who died before the plaintiff's husband. The fund in controversy here is raised by the society from those members who survived the plaintiff's husband; and the society and its members are interested in having the fund applied, according to the terms of the benefit certificate, in bettering the condition of those dependents of the deceased member, to whom he and the society had agreed that it should go, in the only form known to law. To give it to the plaintiff would be to divert a charitable fund from the specific purpose for which it was raised to a purpose not in any aspect charitable, so that restitution might be made for the consequences of a fraud perpetrated upon the plaintiff by her husband. So far as the plaintiff relies upon a contract made between her and her husband, it was invalid under our laws, and cannot be enforced in equiy. Fowle v. Torrey, 135 Mass. 87, where this question was elaborately considered. See, also, Woodward v. Spurr, 141 Mass. 283, 6 N.E. 521; Porter v. Wakefield, 146 Mass. 25, 14 N.E. 792; Clark v. Patterson, 158 Mass. 388, 33 N.E. 589. Nor can the fact that the wife survived her husband make that a good contract which was originally a nullity. Kneil v. Egleston, 140 Mass. 202, 4 N.E. 573. Nor does the subsequent marriage of the wife to the member revoke or in any way affect the contract which he had made with the society. Order of Foresters v. Callahan, 146 Mass. 391, 16 N.E. 14.

As to the $5,000 there is less ground for impressing a trust upon the death fund. There is no allegation that the $5,000 lent to her husband by the plaintiff constituted any part of the fund. On the contrary, the allegation is that she paid the money to or on account of her husband. To impose a trust upon a fund, the money must be identified as going into the fund. See Institution v. Copeland, 160 Mass. 380, 35 N.E. 1132.

It is suggested that what has taken place operates as an estoppel against the defendants in favor of the plaintiff. But there is no more reason why a person not named in a benefit certificate should be substituted for one named, by the operation of an estoppel than by the operation of a contract or a will. Yet it is well-settled law in this commonwealth that in such cases a benefit certificate cannot be transferred except in the manner pointed out in the by-laws of the society. Elsey v. Association, 142 Mass. 224 7 N.E. 844; Daniels v. Pratt, 143 Mass. 216, 10 N.E. 166; McCarthy v. Order of Protection 153 Mass. 314, 26 N.E. 866, 11 L. R. A. 144....