102 N.Y. 523 | NY | 1886
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *527 The defendant was organized under chapter 267 of the Laws of 1875, entitled "An act for the incorporation of societies or clubs for certain lawful purposes." The purposes enumerated in the act for which societies may be incorporated under it, are quite numerous, including social, political, sporting, literary and other objects, and also "mutual *528 benefit" and "benevolent" purposes. The subject of life insurance is not among the enumerated objects, unless it is embraced in the term "mutual benefit" or "benevolent." There is no restriction in the act which requires that the benefits or benevolence be confined to members or the families of the members.
Any five or more citizens of full age may form themselves into such a corporation by making and filing the prescribed certificate, stating the name of the society and its particular business and objects, and they may adopt a constitution, by-laws and rules.
The certificate of incorporation of the defendant, which was filed April 21, 1877, states the object of the society to be "to combine the efforts of all its members with the view to effect mutual relief, aid and systematic contributions and charityduring their life-time, and to their respective families, from time to time, when rendered necessary by sickness or pecuniarydistress." Here again there is no specific mention of life insurance nor any restriction of beneficiaries to the families of members, except when aid is rendered necessary by sickness orpecuniary distress, and from the context it is evident that this clause of the certificate treats of aid contributions to be furnished during the life-time of the members respectively. In the by-laws appears the first direct reference to any thing of the nature of life insurance. Section 2 of article 1 of these by-laws declares that the objects of the society shall be to secure mutual benefit and protection to its members, and to furnish aid to their families or assigns in case of a member's death, and section 3 states that "the plan of the society will be to issue certificates for a sum not to exceed $2,000, to be paid to the heirs or beneficiaries of deceased members named in his certificate, from funds arising from assessments for the payment of death claims according to the schedule of rates hereinafter adopted." The by-laws then proceed to organize a system similar to that of a mutual life insurance company. A medical examination is required as a condition of admission to membership, an entrance fee and small annual dues are payable, *529 and members are also required to pay assessments to meet death losses, on a scale graduated according to the age of the member at the time of his admission; and upon the death of each member, after the filing of the required proofs, the treasurer is required to pay to the legal representatives of the deceased member, or to such heirs or beneficiaries as are named in his certificate, the sum of $2,000.
There is nothing in the by-laws which requires that the beneficiaries named in the certificate should be members of the family of the deceased member, and if no beneficiaries are designated, the payment is to be made to his legal representatives. The power of the company to create a fund for the insurance of the lives of its members is not questioned on this appeal, and we do not, therefore, discuss it. The act of 1875 authorizes the incorporation of societies for purposes of "mutual benefit," and it must be under this head that the power is claimed, to contract for the application of the joint contributions of the members to the payment of a gross sum to the legal representatives of each member, or to such beneficiary as he may designate to receive it upon his death.
There is nothing in the act which restricts the objects of the societies formed under it to the relief of families of their members. They may be formed for general purposes of benevolence and for many other objects, such as social, political, athletic, sporting, etc. Neither does the certificate of association of the defendant restrict the application of its funds to the relief of a member or his family, except where such relief is to be extended during the life of the member.
But the by-laws disclose the plan by which the society proposed to carry out the object stated in the certificate, viz.: "to combine the efforts of all its members, with the view to effect mutual relief, aid and systematic contributions of benevolence and charity during their life-time," and this plan was to combine their contributions so as to secure mutual benefit to the members and to afford aid to their families or assigns, in case of a member's death, by issuing the certificates of membership before referred to, whereby the payment of $2,000 was secured *530 to the legal representatives of each member on his decease, or to such other beneficiaries as he might cause to be designated in the certificate. By this means, each member, in consideration of the sums contributed by him to the funds of the society, became entitled to an instrument similar to a policy of insurance upon his life, and was empowered to designate the person to whom the stipulated sum should be paid upon his death. This power was a present benefit to the member, as he might use it for the purpose, not only of making future provision for some member of his family, or some other object of his benevolence, but even to raise money to supply his own immediate necessities, and it was no concern of the society in what manner he made it available. The society could not in any event escape the payment of the stipulated sum, for if, as it now claims, the designation of a person not a member of the family of the deceased, was void the payment would, according to the terms of the by-laws and certificate, be due to his legal representatives.
For the reasons stated we are of opinion, that the designation of Massey as a beneficiary was not in contravention of the certificate of incorporation. That certificate did not contain the restriction which appears in the certificate of incorporation referred to in the case of State v. Central Ohio Mutual ReliefAssociation (
The judgment should be affirmed, with costs.
All concur.
Judgment affirmed.
