Masonic Mut. Ben. Soc. v. Burkhart

• Decision Date: 26 January 1887
• Citation: 10 N.E. 79,110 Ind. 189
• Parties: Masonic Mut. Ben. Soc. v. Burkhart.
• Court: Indiana Supreme Court

110 Ind. 189

10 N.E. 79

Masonic Mut. Ben. Soc.

v.Burkhart.¹

Supreme Court of Indiana.

January 26, 1887.

Appeal from superior court, Marion county.

Peele & Taylor, for appellant. Shephard & Martindale and Applewhite & Applewhite, for appellee.

MITCHELL, J.

This suit was brought by Mary Burkhart, to recover on a certificate of membership issued by the Masonic Mutual Benefit Society of Indiana, to Michael Burkhart. It appears from the averments in the complaint that the society is a domestic corporation, organized under the laws of this state. It is described as a charitable organization for the mutual benefit of its members. A copy of the certificate is set out in the complaint. The certificate shows that the benefits to accrue from the membership thereby created were to be payable to Mary Burkhart, wife of Michael Burkhart, or to the legal representatives of the latter. The complaint avers that on the twenty-first day of February, 1883, by an arrangement between Michael Burkhart and the society, the original certificate was canceled and surrendered up, and a new certificate taken in its stead. Under the substituted certificate, the benefits were to become payable to Michael Burkhart, Jr., a son of Michael Burkhart, the insured. It is alleged that the cancellation of the original, and the substitution of the new certificate in its stead, were both without the knowledge or consent of the plaintiff. Payment of all dues is alleged, and it is averred that Michael Burkhart died a member of the society. It is further alleged that an assessment, according to the terms of the certificate and the rules of the society at the time of the death of Michael Burkhart, would have produced $2,500, and that that amount was paid over to Michael Burkhart, Jr., on the substituted certificate, without the plaintiff's knowledge or consent. Judgment is demanded for the sum so paid.

The question is, do the facts set forth in the complaint constitute a cause of action? On behalf of the appellant, it is argued, in effect, that a designated beneficiary in a certificate of membership of a society organized for charitable purposes, or for the mutual benefit of its members, may be changed, subject to the organic law and the regulations of the society; and that, as it appears from the averments in the complaint that a change was actually made by the society and the member to whom the certificate sued on was issued, it must be presumed that the change was made in consonance with the duly-adopted rules and regulations of the society, and the law then in force.

That beneficiaries may be changed in cases of policies or certificates of membership issued by societies such as the one here concerned is settled by the decisions, as well as by statute, in this state. Section 3850, Rev. St. 1881; Presbyterian, etc., Fund v. Allen, 106 Ind. 593, and cases cited; S. C. 7 N. E. Rep. 317; Gentry v. Supreme Lodge, etc., 20 Cent. Law J. 393; Hellenberg v. Independent Order B'nai Berith, 94 N. Y. 580;Duvall v. Goodson, 79 Ky. 224;Eastman v. Provident, etc., Ass'n, 20 Cent. Law J. 266.

In this respect the rules governing policies issued by ordinary insurance companies are not controlling, when applied to certificates of membership in an association such as that here involved. By becoming a member of such a society the holder of the certificate acquires the power of appointment, in respect to the fund to be accumulated and paid at his death. Compliance by the member with the conditions of membership entitles the beneficiary appointed to receive the benefits provided by the certificate and rules of the society. This power of appointment is to be exercised in conformity with the rules and regulations of the association, and the law under which it has its existence. The rights and liabilities of the members are fixed by such rules and regulations as enter into the constitution of the company, as provisions of its charter and by-laws,-such rules as become part of the law governing the association.

In the act of March 2, 1879, in relation to beneficiary societies, it is provided, among other things, that “all such benefits, claims, or interest, made for the benefit and protection of the wife, child, or children, or dependents of parties so insured, or members of such society so organized and incorporated, shall be for the sole use and benefit of the parties named as beneficiaries in the policy or certificate of membership issued by such society.” Section 3850 enacts, substantially, that such certificates of membership shall be regarded as a contract between the member and the society, and authorizes the association to change the name...