Supreme Colony United Order of Pilgrim Fathers v. Towne

• Decision Date: 15 January 1914
• Citation: 89 A. 264,87 Conn. 644
• Court: Connecticut Supreme Court
• Parties: SUPREME COLONY UNITED ORDER OF PILGRIM FATHERS v. TOWNE et al.

89 A. 264

87 Conn. 644

SUPREME COLONY UNITED ORDER OF PILGRIM FATHERS

v. TOWNE et al.

Supreme Court of Errors of Connecticut.

Jan. 15, 1914.

Appeal from Superior Court, New Haven County; William H. Williams, Judge.

Interpleader by the Supreme Colony United Order of Pilgrim Fathers against Carrie Dike Towne, administratrix, and others. From the judgment, the named defendant appeals. Reversed and remanded for correction.

Denis T. O'Brien, Jr., of Meriden, for appellant.

Henry W. Stowell, of New Haven, for appellee Terry.

WHEELER, J. The plaintiff is a fraternal benefit society incorporated under the laws of Massachusetts and having subordinate bodies, called colonies, in other states under its jurisdiction. It brings its bill of interpleader to require the defendants to interplead as to their claims to the avails of a benefit certificate now held by it, which certificate was issued to H. S. Hanaford, one of its members. In the certificate the wife of Mr. Hanaford was duly designated as the beneficiary. She predeceased the insured, and no further designation of a beneficiary was made by him. The laws of the society make no provision for the disposition of the benefit where the beneficiary predeceases the insured, and he makes no further designation. A judgment was duly rendered requiring the claimants to interplead and the plaintiff to hold the fund subject to the final order of the court.

The only heir, relative or next of kin surviving the insured member, was a half-brother. One claimant is the administratrix of the deceased beneficiary, the other the administrator of the deceased insured member.

Applications for membership in the plaintiff are forwarded by the secretary of the local colony to the home office in Massachusetts, and if in proper form, and the applicant found duly initiated and the fee for the benefit certificate paid, a benefit certificate reciting that it is issued upon condition that the insured complies with the laws, rules, and regulations of the society and indorses thereon his acceptance in writing of the certificate upon the conditions named is then forwarded by the home office to the secretary of the local colony for the acceptance of the member. This procedure was followed in this case.

The contract of the benefit certificate became effective when formally accepted by Hanaford, the insured, in Connecticut. The acceptance was the final act consummating the contract. If the delivery be conditioned upon any act such as the payment of a premium to a local agent, or the written acceptance of the certificate at the place of the local colony, the place where this final act is required is the place of the contract. Until then it was unilateral. Coverdale v. Royal Arcanum, 193 Ill. 91, 106, 61 N. E. 915: Equitable Life Soc. v. Clements, 140 U. S. 226, 232, 11 Sup. Ct. 822, 35 L. Ed. 497.

While the contract was a Connecticut contract, it was conditioned upon the laws of the society, and its laws; so far as valid, were in harmony with, and all of its contracts included, the statute law of the state of its origin relating to fraternal benefit societies.

The constitution and by-laws do not specify the classes of beneficiaries except that the book containing them quotes an extract from the statute law of Massachusetts prescribing the classes of beneficiaries that may be named. This statute necessarily became a part of the laws of the society forming a part of every contract of insurance it made. Silvers v. Benefit Association, 94 Mich. 39, 53 N. W. 935; Ebert v. Mutual R. F. L. Ass'n, 81 Minn. 116, 120, 83 N. W. 506, 834, 84 N. W. 457; 29 Cyc. 69.

The statute so quoted in its books of constitution provides that "no beneficiary shall have or obtain any vested interest in the said benefit until the same has become due and payable upon the death of the said member." It follows from this provision that the wife designated as beneficiary could acquire no vested interest in the benefit unless she survived the insured member, and, as this contingency has not arisen, she never had an interest in the benefit, and her administratrix could acquire no interest in the benefit except such as came from her.

This statute is in affirmance of the general law. In ordinary life insurance the beneficiary cannot be changed without the consent of the beneficiary; in fraternal benefit insurance ordinarily, as in this case, the insured retains the right to change the beneficiary within the classes prescribed. As a consequence the beneficiary on designation acquires, and during the life of the insured secures, merely an expectancy, revocable by the insured, and not ripening into a property right until the death of the insured member. Masonic Mut. Ben. Ass'n v. Tolles, 70 Conn. 537, 544, 40 Atl. 448; Colburn's Appeal, 74 Conn. 463, 468, 51 Atl. 139, 92 Am. St. Rep. 231; Supreme Lodge N. E. O. P. v. Hine, 82 Conn. 315, 319, 73 Atl. 791; Marsh v. American Legion of Honor, 149 Mass. 512, 515, 21 N. E. 1070, 4 L. R. A. 382; Att'y Gen'l v. Am. Legion of Honor, 206 Mass. 158, 165, 92 N. E. 136; Warner v. Modern Woodmen of Am., 67 Neb. 233, 237, 93 N. W. 397, 61 L. R. A. 603, 108 Am. St. Rep. 634, 2 Ann. Cas. 660; Pilcher v. Puckett, 77 Kan. 284, 287, 94 Pac. 132; Golden Star Fraternity v. Martin, 59 N.J.Law, 213, 216, 35 Atl. 908.

The death of the beneficiary wife prior to the decease of the insured voided her contingent expectancy, so that she never obtained a vested interest in the benefit, and her administratrix cannot secure what she never possessed.

We come to the second question, whether the estate of the deceased member can take.

Under the laws of the society and the law of its incorporation, the member had the power to designate to whom the death benefit should be paid, and also the power to substitute a new beneficiary. He had, under his contract, no other control over the benefit, and as a consequence no property interest in it. "An appointment so made is revocable, because it is a mere unilateral act, not amounting to a transfer, and creating no vested interest." Colburn's Appeal, supra.

A mere power of appointment is not an asset in the donee of the power and conveys no title to or interest in the property conveyed (Co. Lit. 235b) and,...