Mason v. Mason

• Decision Date: 12 December 1902
• Docket Number: 20,058
• Citation: 65 N.E. 585,160 Ind. 191
• Parties: Mason et al. v. Mason
• Court: Indiana Supreme Court

65 N.E. 585

160 Ind. 191

Mason et al. v. Mason

No. 20,058

Supreme Court of Indiana

December 12, 1902

Rehearing Denied March 10, 1903.

From Superior Court of Allen County; S. L. Morris, Special Judge.

Action by Jennie Mason against the Pennsylvania Company and Rachael Mason on a benefit certificate. The company paid the amount of the certificate into court and was discharged, and thereafter judgment was rendered in favor of plaintiff, from which Rachael Mason appeals. Transferred from Appellate Court, under clause 2, § 1337j Burns 1901.

Reversed.

Wilmer Leonard and Elmer Leonard, for appellant.

Henry Colerick, for appellee.

OPINION

Gillett, J.

Appellee instituted this action to recover against appellant the Pennsylvania Company on an insurance certificate. Appellant Rachael Mason was also made a party defendant, the complaint alleging that she claimed, but, in fact, had no interest in said certificate. The latter unsuccessfully demurred to the complaint, and upon her demurrer being overruled she reserved an exception to the ruling, and then filed answer. The Pennsylvania Company paid the amount of said certificate into court, and, with the consent of parties, the court entered an order discharging it; and the cause proceeded, under the issues formed between the Masons, to a trial that resulted in a verdict and judgment for appellee. Appellant Rachael Mason appealed to the Appellate Court. Her first assignment of error challenged the ruling of the lower court in overruling her demurrer to the complaint.

The complaint discloses that under a written contract a number of railway companies, including the Pennsylvania Company, have for a number of years maintained a relief department, as an unincorporated association; that while the undertaking is joint, to secure greater economy in management, yet the responsibility of each railway company to its employes is several. The contract provides for the creation of a fund, by the ratable contributions of each company and its employes of such sums as shall be necessary to meet the expenses of administration, and to pay such benefits as become due. The instrument also provides that the affairs of the association shall be managed by a joint advisory committee, elected in part, from time to time, by the respective employes of the constituent companies. It is further provided by the contract that the organization and regulations of the association shall be in accordance with an appended plan, and that such plan shall not be changed during the continuance of the agreement, except upon the approval and adoption of the same by all of the companies that are parties to such agreement.

The plan of organization and regulations above referred to provides for the payment of fixed death benefits "to the relatives or other beneficiaries specified in the applications of such employes," for the division of contributing employes into five classes, and that applications for membership are to be in accordance with a prescribed form. This form is to be signed by the proposed member, and it specifies the class to which he seeks admission, and in part reads: "Death benefits shall be payable to . . . . (here designate the beneficiary or beneficiaries)." The form of organization also provides that, under certain circumstances, members may apply for insurance in a class wherein higher benefits are paid. A member so applying is required by the regulations to sign a supplementary application. This application, it is provided, shall be as follows: "I, * * * by virtue of my former principal application, under and subject to the conditions recited in said principal application, and upon the terms thereof, unless, and only so far as herein modified, do hereby make this supplementary application for the following, namely: (here specify the character of benefits applied for)." Regulation No. 28 is as follows: "An applicant may in his application, or subsequently, designate a beneficiary to receive his death benefit, other than relatives entitled to recover the amount payable in the event of the death of the applicant, on giving good and sufficient reasons for the designation." Regulation No. 29 contains the following provision: "Benefits payable on account of the death of a member shall be payable only to the beneficiary or beneficiaries designated in his application to receive the same, if living at the death of said member."

The complaint alleges further that on the 8th day of June, 1898, George W. Mason, a single man, made application for insurance in said relief association, and on the same day received a certificate of membership therein, with a provision in said certificate that in the event of his death the death benefit should be payable to defendant Rachael Mason, his mother; that he subsequently intermarried with the plaintiff, and afterwards he went with his said wife to the authorized agent of said association, and then and there surrendered to him said certificate of membership and a book, containing copies of the contract and regulations above mentioned, that he had received from the association with his former certificate; that he then and there requested that a new certificate of membership be issued to him, in a different class, "and then and there designated his said wife, Jennie Mason, as the beneficiary in case of his death;" that said agent being then and there authorized so to do, issued to said George W. Mason a certificate of membership in said association, numbered 36,917, and a book of like character to the one above mentioned; that said George W. Mason then and there delivered said new certificate and book to his wife, and that at the time of the surrender of said old certificate, and at the time of the delivery to him of said new certificate, it was his intention and purpose that said insurance should be for the use and benefit of plaintiff, "And that at the time of the issuing thereof he so named and designated her, to the officer of said company aforesaid, as such beneficiary." The complaint sets out a copy of said certificate No. 36,917. Said instrument does not state the name of the beneficiary, but recites that said George W. Mason is a member of the relief fund of the association, and is entitled to the benefits provided by the regulations of said association (which regulations are annexed to the certificate, and by reference made a part thereof) for a member of the third class, with no additional death benefit of the first class. The further allegations of the complaint are not material to the question in hand.

As the association had no capital stock, but as its members contributed cash to a common fund, out of which benefits were paid, and as the contributing employes, through their representatives, participated in the administration of the association, it was clearly of a mutual character. The provisions of § 5050 Burns 1901 relative to the right to change beneficiaries, has no application to this association, as it was unincorporated. Presbyterian, etc., Fund v. Allen, 106 Ind. 593, 7 N.E. 317. The courts recognize a difference, as to the extent of the right of persons insured to make such changes, between the ordinary insurance contracts and the certificates of mutual companies. As to the latter contracts, the great weight of authority is that in the absence of limitations or restrictions in the rights of a member, imposed by the organic law, the articles, the by-laws, or the certificate, a member may change his beneficiary. Presbyterian, etc., Fund v. Allen, supra; Masonic Mut., etc., Soc. v. Burkhart, 110 Ind. 189, 10 N.E. 79; Holland v. Taylor, 111 Ind. 121, 12 N.E. 116; Milner v. Bowman, 119 Ind. 448, 5 L. R. A. 95, 21 N.E. 1094, and cases there cited; Niblack, Mut. Ben. Soc. (2d ed.), § 212. Without pausing to grasp the philosophy of the distinction between the two forms of contract, it suffices to affirm that the cases generally hold that under the latter form of contract the beneficiary has ordinarily no vested interest. But whatever the character of the association, it is obvious that the relations of the insured and the beneficiary to the insurance contract may be made to depend upon the provisions of the contract. To the extent that the contract gives the beneficiary rights, its provisions are a law unto the parties. If there is a right reserved by the insured to change the beneficiary, but if the contract points out the manner in which the change is to be made, then it is the duty of the insured to pursue the contract, if he would displace the beneficiary. Holland v. Taylor, supra; Olmstead v. Masonic Mut. Ben. Soc., 37 Kan. 93, 14 P. 449; Renk v. Herrman Lodge, 2 Dem. Surr. (N. Y.) 409; Thomas v. Thomas, 60 Hun 382, 15 N.Y.S. 15; Mellows v. Mellows, 61 N.H. 137; Rollins v. McHatton, 16 Colo. 203. 27 P. 254, 25 Am. St. 260; Supreme Lodge, etc., v. Nairn, 60 Mich. 44, 26 N.W. 826; Highland v. Highland, 109 Ill. 366; Hotel-Men's, etc., Assn. v. Brown, 33 F. 11.

In Holland v. Taylor, supra, the rules of the society provided that a change of beneficiary might be made by the insured by the surrender of the old certificate and the execution of a direction for a change according to a prescribed form, and...