58 Ind. App. 550 | Ind. Ct. App. | 1914
On October 10, 1881, appellant, a fraternal beneficiary association, issued a benefit certificate for $2,000 to one of its members, Louis Thieme, payable “to persons named in will”. Appellee, as executor of tbe last will and testament of said member, brought tbis action to recover tbe amount specified in such certificate.
Tbe sufficiency of tbe sixth paragraph of complaint to withstand demurrer presents tbe only question for our consideration, and tbis paragraph contains, in addition to tbe foregoing, substantially tbe following averments: Louis Thieme died April 9, 1910, and bis will was duly probated. By its terms the benefit certificate was bequeathed to Jacob L. Bieler, who was also named as executor, and who qualified as such. Appellant’s by-laws limited tbe payment of benefits to tbe immediate family, and blood relatives of tbe member, or persons dependent on him at the time of bis death, and further provided, if any designation of beneficiaries
It is the evident theory of the pleader that when Thieme became a member of appellant society his rate of assessment was fixed by its by-laws and that amount could not thereafter be increased, so as to affect him by any change in the by-laws. Broadly stated, the contention is that having once fixed the rate of assessments required to be paid by him to remain in good standing in the order, no-power existed in it to modify or change its by-laws so as to affect the vested rights of its preexisting members without their consent. Such is generally held to be the correct rule in the absence of a provision either in the laws of the order or in the certificate issued to the member, permitting the increase of assessments. The question in this case is, What should be the rule when there is an express provision in the certificate of insurance by which the member agreed to abide by laws, rules and regulations of the order after enacted?
This subject is fully discussed in the case of Reynolds v. Supreme Council, etc., supra. In that case the court said: “There are many cases in which it is held that the amount expressly promised to be paid in the certificate like those issued by the defendant can not be cut down by an amendment of the by-laws. * * * But in many of these * * * a distinction is made between the express stipulation of the corporation to pay a certain sum and other provisions relating to the methods of the corporation, and the duties of the certificate holders, which properly may ,be a subject for a regulation by by-laws, even though they affect the rights of the parties under their contract. The assessments to be paid for death benefits in this case are provided for by the by-laws, while the promise in writing to pay a certain sum to a particular person is, as to that person, a matter outside of those corporate rules which may be expected to be changed by an amendment of the by-laws. This promise on one side is set over against the promise of the member on the other. The promise of the member is to do what may be called for by the by-laws then existing or that may afterward be adopted. The promise of the corporation is stated expressly, without mention of the by-laws. The member occupies a dual position, as an insurer and the insured. As one of the association agreeing to provide for the payments that may become due to members, he agrees to be subject to the by-laws. As the insured person to whom a particular sum of money is promised, he has a right to stand on the terms of the promise.”
An examination of many of the cases relied on by appellee, will disclose that they are those where the by-laws were amended so as to affect the fixed promise made to the certificate holder as the person insured, and have no reference to his duties as a member of the society, which has made the specific promise to each certificate holder that the several
Being mindful of the fact that the complaint may be so amended as to overcome the defects already discussed, and an effort made to proceed further in the name of the executor, it becomes incumbent upon us to pass on the right of appellee to maintain the action.
In the case of Brooklyn Trust Co. v. Seventh Reg., etc. (1906), 113 App. Div. 717, 99 N. Y. Supp. 248, the policy was made payable to “beneficiary, as provided for in will”. By his will the insured left the residue of his estate after certain bequests, to the plaintiff trust company, and the court said, “We think it was the intention of the testator to name the plaintiff, in its character as testamentary trustee, as his beneficiary.”
It was said in the case of Smith v. Supreme Tent, etc. (1905), 127 Iowa 115, 102 N. W. 830, 69 L. R. A. 174. “It seems to be well settled that, where the beneficiary named is incapable of taking the proceeds under the law, the administrator of the deceased person can recover the
All the cases cited above, and others, seem fairly to support the contention that appellee is a proper party plaintiff. The case of Gibbs v. Knights of Pythias, supra, is almost on all fours with the present case. There are practically no authorities in direct opposition to appellee’s contention, although certain general rules of law would seem to favor appellant’s views. However, we belieye, since appellee was named in Thieme’s will as beneficiary and as executor, enough effect should be given to Thieme’s attempt to exercise the power he had of naming the beneficiary, to allow appellee as executor to maintain this action, as a trustee for the persons entitled to the proceeds of the benefit certificate, under the by-laws and constitution of the order, and the statutes of Indiana.
For reasons previously indicated, the court erred in overruling appellant’s demurrer to appellee’s sixth paragraph
Note.—Reported In 105 N. E. 244. As to mutual or membership features specially applicable to life or accident insurance, see 52 Am. St. 543. As to the right of a mutual benefit society to increase rates, see 7 D. R. A. (N. S.) 1154; 31 L. R. A. (N. S.) 417. See, also, under (1) 29 Cyc. 79, 74; (2) 29 Cyc. 66; (3) 29 Cyc. 79; (4) 29 Cyc. 68, 79; (5) 29 Cyc. 72, 79; (6) 29 Cyc. 247; (7) 29 Cyc. 121; (8) 29 Cyc. 218.