Algeo v. Fries

27 Pa. Super. 157 | Pa. Super. Ct. | 1905

Opinion by

Smith, J.,

The principles on which this case is to be determined have been practically settled by the decisions of the Supreme Court in Com. v. Equitable Ben. Association, 137 Pa. 412, Masonic Aid Association v. Jones, 154 Pa. 99, and Johnson v. Railroad Co., 163 Pa. 127.

The garnishee, an unincorporated fraternal association, is not an insurance company, and its contract, described as a “ Beneficiary Certificate,” is not an insurance policy, within our statutes relating to insurance companies and policies. The beneficiary certificate names Ella A. Fries, wife of the applicant, as the person designated by him to receive the amount payable at his death. The applicant, by his acceptance of the certificate, became a member of the association, and payment of the amount stated was to be made in conformity with its laws. These provide that' a change of the person who is to receive payment must be made by a new certificate, naming such person, to be issued on the application of the member, and the execution by him of the transfer on the back of the original. This is the only method by which a change of the beneficiary can be made, or by which the association can be made liable for tbe amount payable to any other person than the one first designated as beneficiary. Hence the provision, in the bond on which judgment was entered, for payment of the money due the plaintiff from the proceeds of the insurance, though in the nature of an equitable assignment, was inoperative as a change of the person designated to receive payment. While the money payable to the beneficiary became a debt due from the association upon the death of her husband, it was nevertheless to be paid in conformity with the laws of the association. These provide for payment “to the person or persons designated by the certificate as the beneficiaries, taking a receipt in a book kept for that purpose, and also obtaining the signature of the beneficiaries to the receipt upon the certificate.” Only upon compliance with these provisions by the beneficiary, or tender of compliance, can the association be required to pay. The appellant’s allegation that the beneficiary “ represented the security as a policy of insurance, upon which appellant loaned her money to the beneficiary,” if true, suggests no element of fraud, since an inspection of the instrument by the appellant would have shown its true character. Vigilantibus, et non dormientibus leges subveniunt.

In addition to what has already been said as to the terms on which payment is to be made, the laws of the association, after enumerating the classes of relatives and dependents who may be designated as beneficiaries, provide that, “ In no case shall designations be to executors, estate, creditors, or by will, or to any classes except as provided above; ” and also require, “ where there is the relation of dependency, an explicit declaration that said person or persons are in no way creditors of him, and that said designation shall be null and void if otherwise.” The purpose of the association is to secure to relatives and dependents a provision upon the death of its members, free from liability to creditors, and its laws are carefully directed to this end. In specifically excluding creditors, the contract is, in substance, analogous to a spendthrift trust for the benefit of the designated beneficiary, and is made practically effective as such by requirements, precedent to payment, that can be complied with only by such beneficiary. In view of its purpose, and tbe laws of the association respecting the beneficiary and the conditions of payment, the contract must be construed as creating a trust of this character, as fully as if it in terms provided that the money payable should not be subject to the engagements or liabilities of the beneficiary.

Judgment affirmed.