Massachusetts Catholic Order of Forresters v. Callahan

• Court: Supreme Judicial Court of Massachusetts
• Writing for the Court: DEVENS, J.
• Citation: Massachusetts Catholic Order of Forresters v. Callahan, 146 Mass. 391, 16 N.E. 14 (Mass. 1888)
• Decision Date: 06 March 1888
• Parties: MASSACHUSETTS CATHOLIC ORDER OF FORRESTERS v. CALLAHAN et al.

146 Mass. 391

16 N.E. 14

MASSACHUSETTS CATHOLIC ORDER OF FORRESTERS v. CALLAHAN et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 6, 1888

COUNSEL

P. O'Loughlin, for Hannah Keefe, administratrix and next of kin.

The power of a corporation is limited to the objects and purposes of its creation. Davis v. Railroad, 131 Mass. 259; Legion of Honor v. Perry, 140 Mass. 580, 5 N.E. 634. The objects and purposes of the Massachusetts Catholic Order of Forresters are expressly defined by the statute under which it was organized. The purpose of the statute of 1874 as amended by chapter 204, Acts 1877, is to encourage bodies of individuals to unite and to establish corporations for the purpose of assisting "widows, orphans, or other dependents of deceased members," etc.; and, when the death of a member occurs, a certain fixed sum is to be "forthwith paid to the person or persons entitled thereto." This last clause has reference to the classes of persons named in the statute, one or more of whom a member may, in the exercise of his power of disposition, designate as beneficiary. Acts 1877, c. 204; Elsey v Association, 142 Mass. 224, 7 N.E. 844; Supreme Council v. Perry, 140 Mass. 580, 5 N.E. 634; Tyler v. Association, 145 Mass. 134, 13 N.E. 360. It cannot mean a stranger, or a person standing in any other relation to the deceased; for any attempted disposition of the fund contrary to the charter or statute under which a corporation is formed, will not be permitted to defeat the rights of those whom the statute declares to be beneficiaries. Supreme Council v. Perry, supra; Daniels v. Pratt, 143 Mass 216, 10 N.E. 166; Duvall v. Goodson, 79 Ky. 229; Insurance Co. v. Miller, 13 Bush, 494; In re Phillips, 23 Ch.Div. 246; Arthur v Association, 29 Ohio St. 560; Worley v. Association, 10 F. 227. And if the constitution of the order provided that the fund might be given to a stranger, or one not contemplated by the statute,--which it does not,--such a clause would be inoperative, since the laws of a corporation cannot conflict with the laws of the state. Briggs v. Earl, 139 Mass. 473, 1 N.E. 847; Supreme Council v. Perry, 140 Mass. 580, 5 N.E. 634; Palmetto Lodge v. Hubbell, 2 Strob. 463; Insurance Co. v. Miller, 13 Bush, 494. Unless, therefore, it can be shown that Catherine Callahan, the mother of the deceased, was dependent upon him for support, as provided by the statute, she is not entitled to the fund; indeed, she expressly admits that she was not a dependent. Hence the widow of the deceased, as against his mother, is entitled to the fund, even though made payable to the mother. Elsey v. Association, 142 Mass. 224, 7 N.E. 844. The by-laws, when not inconsistent with the statute, govern the disposition of the fund, and, in the absence of a regularly issued policy, constitute the contract between the member and the society. Id.; Chamberlain v. Lincoln, 129 Mass. 71; Mills v. Robstock, 13 N.W. 163; Greeno v. Greeno, 23 Hun, 482; Const.M.C.O.F.1882, tit. "Object." It follows, therefore, that a member cannot make a disposition of the fund contrary to the laws of the society. Arthur v. Association, 29 Ohio St. 560. If any person designated by the member on his certificate or application for membership can take as beneficiary, without reference to the classes of persons named in the statute, the corporation would in no way differ from the ordinary life insurance company, and would therefore be governed by the same laws, and be subject to the same liabilities. Worley v. Aid Association, 10 F. 227; State v. Association, 26 Ohio St. 23; Association v. People, 90 Ill. 171; Ballou v. Gile, 50 Wis. 619, 7 N.W. 561. But such corporations are not subject to the same liabilities, for the provisions of the General Laws relating to life insurance companies "shall not apply to such beneficiary corporations, associations, and societies;" nor can the fund be attached by trustee or other process. Pub.St. c. 115, § 10; Acts 1882, c. 195, § 2; State v. Association, supra. The only persons entitled to take as beneficiaries under the statute, and by the constitution and laws of the society, which must be consistent with the statute, are widows, orphans, or dependents. Pub.St. c. 115, § 8; Acts 1882, c. 195, § 2. The fact, therefore, that the deceased, on his application for membership, suggested the payment, on his death, of the fund to his mother, does not warrant the society in paying it to her; since such order is only directory, and forms no part of the contract of membership. Greeno v. Greeno, 23 Hun, 482. The fund in question never was the property of the deceased member, and it must be given to the persons entitled thereto, as provided by the statute. Fenn v. Lewis, 10 Mo.App. 481, and cases and statutes cited supra. On the death of Callahan, his widow, there being no children, was the only person entitled. Having survived her husband, the fund vested in her, and eo instanti became part of her estate, and on her death went to her administratrix, in the first instance. Briggs v. Earl, 139 Mass. 473, 1 N.E. 847; Barbaro v. Occidental Grove, 4 Mo.App. 433. A widow having lived apart from her husband without any fault of his, not being a dependent, cannot take. Society v. March, 82 Pa.St. 168. For the same reason, a sister, unless contemplated by the statute, cannot be a beneficiary. Supreme Council v. Perry, supra. A grandchild cannot take where the benefits are confined to "child or children." Windsor v. Association, 13 R.I. 149. The fund cannot revert to the society where there is any person capable of taking, since the law does not favor forfeitures, and "no construction should be adopted which would lead to such a consequence." Duvall v. Goodson, 79 Ky. 227; Rowswell v. Aid Union, 13 F. 841; Schunck v. Gegenseitiger, 44 Wis. 372; Erdmann v. Insurance Co., Id. 382; Supreme Lodge v. Abbott, 82 Ind. 6; Hull v. Insurance Co., 39 Wis. 404. A society has no power to impose a forfeiture unless granted by clear legislative enactment. Pulford v. Fire Dept., 31 Mich. 465; In re Railroad Co., 19 Wend. 37. In the liberal enactments of our state legislature in favor of corporations of a benevolent or charitable nature, it never intended the creation of commercial institutions of life insurance.

J.P.J. Ward, for Catherine Callahan.

The power of a corporation is derived only from the act or law by which it is created, and under which it continues to act. Dam Corporation v. Ropes, 6 Pick. 32. The power of the present corporation to accumulate a benefit fund at that time (June 10, 1883) and since could only be derived from Pub.St. c. 115,§ 8, as amended by Acts 1882, c. 195, § 2. When the corporation provided in its by-laws for the payment of a fixed sum by each member, and thus accumulated a "death benefit fund," it exhausted its power, and the statute says what disposition shall be made of such fund. Acts 1882, c. 195, § 2. If the corporation had power to control the disposition of the "death benefit fund," (which it has not,) and attempted, by provision in its constitution, to limit beneficiaries to "widows and orphans," such article or by-law would be void, as being unequal, unjust, unreasonable, and manifestly detrimental to the interests of the corporation, because it would deprive unmarried members of any right in or benefit from the fund which they are obliged to contribute to. Ang. & A. Corp. § 347; Cartan v. Society, 3 Daly, 22. No vote or act of a corporation can change the authority given it by the law creating it, either as to the subjects on which it is intended to operate, or the person or property of the corporators. Dam Corporation v. Ropes, supra. By-laws of a corporation must be construed with reference to the statute, and, if practicable, such a meaning given them as will make the two consistent. Elsey v. Association, 142 Mass. 225, 7 N.E. 844; Daniels v. Pratt, 143 Mass. 223, 10 N.E. 166. See, also, Insurance Co. v. Miller's Adm'r, 13 Bush, 494; Duvall v. Goodson, 79 Ky. 229. Members may designate, either in their application for membership or by will, to which of the persons named by the statute as beneficiaries the "death benefit" shall be paid. Const.1882, p. 57, art. 15, § 5, tit. "Const.;" Const.1884, p. 73, Dec. 8. A member in good standing has the right to have the benefit at his death paid to the person whom he has designated, provided it be a person coming within the class of beneficiaries named by statute. Lamont v. Legion of Honor, 31 F. 181; Addison v. Association, 144 Mass. 593, 12 N.E. 407. See Association v. Priest, 46 Mich. 431, 9 N.W. 481. The "mother, Mrs. C. Callahan," was a person coming within the class of beneficiaries mentioned in the statute, and was capable of taking. Acts 1882, c. 195, § 2; Daniels v. Pratt, supra. The marriage of the member (there being no issue) did not revoke the assignment of the benefit to his mother. Church v. Crocker, 3 Mass. 21. The widow of the deceased member never had a vested right in the benefit fund, and therefore it could not descend to her estate. Addison v. Association and Lamont v. Legion of Honor, supra. The case differs from Elsey v. Association, 142 Mass. 225, 7 N.E. 844, as that case was controlled by, and decided with reference to, the law as amended by Acts 1882, c. 195, § 2, which enlarges the class of beneficiaries so as to include relatives of deceased members, whether dependent or not. The expressed will and intention of the deceased member, when properly made, controls the disposition of the "death benefit."

O.A. Galvin, for plaintiff.

OPINION

DEVENS J.

The Massachusetts Catholic Order of Forresters is a beneficiary association, originally formed on July 30, 1879, under St.1874, c. 375, as amended by St.1877, c. 204, (Pub.St. c 115.) The directing and governing body of the...