
    The Washington Beneficial Endowment Association vs. George H. Wood et al.
    Equity. No. 8,618.
    Decided April 13, 1885.
    The Chief Justice and Justices Wylie and Jakes sitting.
    1. When the object of the trust fails, there is a resulting truátto the grantor.
    
      Ü. In construing a trust, the court Will consider all the Surrounding circumstances of the ease, and when proper and necessary, it will receive parol evidence for the purpose of ascertaining the intention of the parties.
    8. A beneficial association in the nature of aninsurancenompany, issued to J., one of its members, a certificate of insurance, by which it agreed with him to pay to his wife,'or her legal representatives, $500 within sixty days •after his death. The wife died, and thereafter, Without making any change •in the beneficiary, J. died, whereupon the legal representatives of the wife claimed the fund.
    
      Held, That this was a trust intended for the wife alone, and that upon her death it resulted to the husband, Whose estate, on his death, was entitled to the fund.
    
      Held, also, that the words “legal representatives” as here used have no signification different from that which is attributable to those words generally; viz: persons appointed either by will or by the law to administer upon the estate uf a deceased.
    •STATEMENT OF THE CASE.
    This was a hill in equity filed against Greorge S, Wood, administrator of the estate of Kate Wood Jones and Lucy E. De Hart, heir at law of, and administratrix upon estate of, Daniel S. Jones, who was the husband of said Kate Wood Jones.
    It avers tbe incorporation of Tbe Washington Beneficial Endowment Association under general act of Congress. Tbe object of tbe association being to provide an endowment fund to be paid to tbe persons entitled thereto, on tbe death of tbe party named in tbe certificate of endowment; that May 18, 1818, Daniel S. Jones applied for an endowment ■certificate in the association, directing that tbe benefits be paid to bis estate; that a certificate of $500 was accordingly issued; that September 29th, 1819, be applied to have tbe beneficiary changed, whereupon tbe original certificate was surrendered and a new one issued wherein it was agreed to pay the benefits to Katie Wood Jones, or her legal representatives; that Daniel S. Jones died September *1, 1882, at St. Elizabeth’s Hospital for the insane, where his wife had died before him, in February, 1881; that defendant, Lucy E. De Hart, had applied for letters of administration on the estate of Daniel S. Jones, and that, also as his heir, she demanded the said $500; that said Wood, as administrator of the wife’s estate, also demanded the said money; that said Jones having survived his wife, and adverse claims being made, the complainant was unable to determine which claimant is entitled to the fund. The hill prayed that the defendants might interplead in regard to the fund (which was paid into court), the association having no interest therein hut to pay it to the party entitled.
    Answers were filed by the defendants; Lucy E, De Hart claiming the fund as heir at law of said Jones, and Wood claiming the same as administrator of the estate of Mrs. Jones. The certificate of endowment in guest-ion contained the following clause: “The Washington Beneficial Endowment Association hereby agrees with the said Daniel S Jones to pay — unless the beneficiary he changed as hereinafter provided — to Katie Wood Jones, ox her legal representatives, the sum of five five hundred dollars/’ &c.
    Lucy E. de Hart was not the administratrix of the estate of Jones, as she bad never been appointed, though she had applied for such letters.
    Under an order of the court the complainant paid the money into the registry of the court; and when the cause came on for hearing the court was of opinion that the fund rightfully belonged to the estate of the husband, Daniel S. Jones; hut as there was no legal representative of his before the court, entry of a decree was suspended until some one should he appointed.
    Thereafter Benjamin F. Leighton was appointed his administrator, applied to he made a party in the cause, was admitted as such, and a decree passed June 11, 1884, declaring the estate of said Jones to b© entitled to the fund, and directing the clerk to pay it over to said Leighton, as such administrator, which was done. From this decree Wood, as as personal representative of Mrs. Jones appealed.
    Edwards & Barnard for appellant Wood:
    What was meant by the use of the words “to pay to Katie Wood Jones, or her legal representatives,” contained in the contract of insurance ?
    In answering this question aright it must be remembered that, in the first place, the contract was to pay the $500 to the estate of the said Daniel S. Jones, and thereafter, on the application of said Jones, the new contract was made. He may have contemplated the prior death of his wife in making that change, knowing that the said money in that event would go, first, to pay her burial expenses; second, any debts she might owe; and, third, the surplus, if any, to her immediate relatives. And this might have been an attempt on his part to restore to his wife’s relatives a portion of moneys given to her by them, and of which he had shared the full benefit. Had such been the sole object of his application to change the beneficiary, could more apt words have been chosen?
    The meaning of the words, “ legal representatives,” has been declared in many cases; and there can be no other than the ordinary one given in this case, if any is to be given at all; and the court cannot presume the words were used with the intention of meaning nothing. Cox vs. Curwen, 118 Mass., 198; 2 Wms. on Ex’rs, p. 1129.
    No case has yet gone so far as to apply the doctrine of lapsed legacies to benefits provided by contracts of insurance ; and very many cases hold that the beneficiary named in such contracts has a yested interest the moment the policy is issued, which cannot be taken away by the insured. May on Insurance, sec. 392; Bliss on Life Ins., secs. 318, 331; Ricker vs. Charter Oak Life Ins. Co., 21 Minn., 193.
    It is expressly provided in this policy—
    “That no change in the beneficiary named herein, nor assignment of this certificate, can be made without the consent of the board of trustees of said association, and undet such conditions as they may prescribe.”
    No attempt was made to effect a change either before or after the wife’s death; so there can be no question here, unless a change is made by the mere operation of law, the contracting parties neither suggesting a change nor consenting to one.
    The law works no such results; it leaves parties free to make their own contracts, and aids each in the enforcement of the same against the other in proper cases. Conn. Mut. Life Ins. Co. vs. Schaefer, 94 U. S., 460, 462.
    Courts have held, in many similar cases, that the insurance money should be paid to the wife’s administrator. Foster, Adm’r, vs. Gile, 50 Wis., 603; Hutson vs. Merrifield, 51 Ind., 24; Swan vs. Snow, 11 Allen, 224; Roe vs. Mut. Life Ins. Co., Bliss on Life Ins., sec. 325, note; Phœnix Mut. Life Ins. Co. vs. Dunham, 46 Conn., 79-87.
    It may be contended that this contract was a .chose in action belonging to the wife, which at her death devolved upon her husband under the Maryland statute of 1798, ch. 101, sub. ch. 5, sec. 8. Thompson’s Digest, 33.
    This canhot be a correct view, for two reasons. First, because at the time of her death she had no chose in action, properly speaking, for she had no right of action — no ground for suit — until her husband’s death; and, second, if it was a chose in action, in any proper sense, the husband did nothing to reduce it to possession, or- to assert ownership of it, as required to deprive her estate of title. Sheldon vs. Sill, 8 How., 449; Bouv. Law Dic., title, “chose;” Ramsey vs. Gould, 57 Barb., 408; Schouler’s Husband & Wife, sec. 152 etseq.; Kelly’s Contracts of Married Women, 50; Latourette vs. Williams, 1 Barb., 9; 1 Parsons on Contracts (5th ed.), 341, note e.
    
    To reduce a chose in action to possession, so as to acquire title under the statute aforesaid, requires the actual collection of the money, or of property in lieu of it, or the entry of a judgment for it. Bird vs. Bird, 18 Md., 484; Crane vs. Gough, 4 Md., 316; Hinckley’s Test. Law, sec, 1506.
    
      >J. J. Johnson and B. F. Leighton for Jones’ administrator :
    The interpretation of a contract is the only question presented by the case at bar, unembarrassed by statutory regulations or association by-laws. From an inspection of the certificate upon which the applicant bases his right to the fund in controversy, it appears that the right to change the destination of the fund was expressly reserved, subject only to the assent of the association; that the certificate was to become void unless there was a compliance with the conditions therein expressed, one of which was the punctual payment of dues; that Kate Wood Jones was designated as the beneficiary of the fund; that the fund was to be paid to the beneficiary, “ or her legal representatives,” within sixty days after satisfactory proof was made to the association of the death of the insured, and that the beneficiary might assign the certificate, with the assent of the board of trustees of the association, subject to such conditions as it might prescribe.
    What is the thought of this scheme ? What its purpose and intent, are questions submitted to this court for its solution. The relationship of the insured to the beneficiary is not disclosed by the certificate itself, but it is admitted on all sides that she was his wife. The obligation of supporting the wife is imposed upon the husband by law; and the law provides for the maintenance of the widow out of the deceased husband’s estate. To discharge this duty, to provide a fund for his wife’s subsistence in the event that she survived him, was the obvious purpose of the insured in designating her as the beneficiary. The husband was the party insured, and not the wife, and he had the power to name an appointee to receive the fund when it should beGome payable. Campbell vs. New England Life Ins. Co., 98 Mass., 389; Rauls vs. American Mutual Life Ins. Co., 27 N. Y., 287; Valton vs. The National Fund Life Assurance Co., 20 N. Y., 32.
    By the very terms of the policy the right to designate another beneficiary was expressly reserved. The policy became void on the non-payment of dues, and there was no obligation upon the husband to keep it in force. She had the mere possibility of obtaining the fund provided she survived her husband, and not a vested interest. Connecticut Mutual Life Ins. Co. vs. Burroughs, 34 Conn., 313; Eadie vs. Shinn, 26 N. Y., 9; 46 Conn., 89.
    The contract is testamentary in character, and the same rules of construction apply as in the interpretation of testamentary writings. Continental Life Ins. Co. vs. Palmer, 42 Conn., 64. The appointment being ambulatory and subject to revocation lapsed on the death of the designated beneficiary. In re Davies, 13 Eq., 163; Oke vs. Heath, 1 Vesey, 135; Easum vs. Appleford, 5 M. & C., 56; Lord Godolphin’s Case, 2 Vesey, 78; Jeafferson’s Case, 2 Eq., 276; Wilkinson vs. Schneider, 9 Eq., 423; Vandergee vs. Aclam, 4 Ves., Jr., 771; Haines’ Case, Johns,, 199; Larkin vs. Larkin, 34 B., 443; Burgess vs. Mowbery, 10 Ves., Jr., 319; Stone vs. Evans, 2 Atk., 86; Elliott vs. Davenport, 2 Vernon, 521; Hermon vs. Howard, adm’r, 23 Wis., 108; Mackring vs. Mitchell, 1 Barb. Ch., 284; Mutual Ben. Life Ins. Co. vs. Atwood’s Adm’r, 24 Gratton, 497; Gamb’s Public adm’r vs. Covenant Mutual Ins. Co., 50 Mo., 44. This is so unless the appellant has an original and not -a derivative title to the fund, and takes by way of substitution and not as the representative of the wile. If this be true, the remarkable spectacle is exhibited of a husband spending his money for the purpose of establishing a fund for the endowment of the remote kindred of the wife. That such could have been his purpose, is, in the language of the learned judge who decided this case below, “incredible.” The words legal representatives have no technical meaning. Wear et al. vs. Bryant, 5 Mo., 159. When found in instruments relating to the administration or settlement of estates they generally mean executors or administrators. When employed in other instruments they are to be construed as assignees, purchasers or lawfully authorized agents, according to the sense in which they are used. Wameck et al. vs. Lembeca, 71 Ill.; Belief Association vs. 
      McAuley, 2 Mackey, 77; Grand Gulf R. R. Co. vs. Bryant, 8 S. & M., 275; Delana vs. Burnett, 9 Ill., 4691; The People, etc., vs. Phelps, adm’r, 78 Ill., 148; Davis vs. Davis, 26 Cal., 31. By an express provision of the certificate it may be assigned by the beneficiary, and the rights accruing thereunder be conferred upon some third person, subject only to the assent of the board of trustees of the association, and limited by such conditions as it sees fit to impose. Suppose there had been a valid assignment of this certificate, who then would have been the legal representative of the beneficiary? Suppose an assignment be made and the insured dies, leaving the beneficiary surviving, so that the fund becomes payable, to whom should it be paid, the beneficiary or her assignee ? There can be but one answer to this question. It is a tact known to this court that these policies are frequently used as a means of procuring credit, and it is obviously essential to the stability of the security that the power of revoking the assignment be controlled by the association. The contract should be read in the light of these attending facts. Warnecke et al. vs. Lembeca, supra. The words “legal representatives,” as employed in this contract, have, then, a general and not a sjrecial meaning. They stand for assignee, pledgee or authorized agent, otherwise no force or effect can be given to that clause of the certificate providing for its assignment, and it would be no security for a loan of money, nor could it be used as a means of procuring credit. Give to the words the interpretation sought to be put upon them by the appellant, and would it not follow that the fund belongs to him ? It was to be paid by the assóciatien to the beneficiary, or her legal representatives, within sixty days after satisfactory proof had been made to it of the death of the insured. Should the beneficiary die, therefore, after the insured and before the payment of the fund, its collection would devolve upon her legal representatives, and if no assignment had been made, the words would bear their ordinary signification and stand for executors or administrators. The insured in the case at bar was an insolvent debtor, and the appellee obtained letters of administration on his estate as a judgment creditor. The appointment of a beneficiary being in the nature of a testamentary disposition of the proceeds of the policy cannot, in the absence of a statute or by-law of the association authorizing it, stand as against the insured's creditors. Hathaway vs. Sherman, 61 Me., 466; Rison vs. Wilkerson & Co., 3 Sneed, 566.
   Mr. Justice Wylie

delivered the opinion of the court.

This is a hill of interpleader brought by the complainant against two parties for the purpose of having the court decide to which of the two a certain fund belongs. In 1818 Daniel Spaulding Jones became a member of the Washington Beneficial Endowment Association of the District of Columbia, paid his fee of initiation and hound himself to pay any dues that might he assessed upon him afterwards for the purpose of meeting the necessities of the company.

This Beneficial Endowment Association is a life insurance company on the mutual plan. The members contribute so much on joining, and when one dies his estate is entitled to a certain fund to be paid by the society, and there is an assessment made upon the members for the purpose of making up that fund. Every man who becomes a member of the association, besides paying his initiation dues, is liable to these calls on the death of his associates, and when he dies the other contributors make up the amount due to his estate.

The certificate of membership recites as follows:

“In consideration of the representations made to the Association in said application and the agreement and the conditions above set forth, all of which are hereby accepted and made part of this contract, and in further consideration of the sum of five dollars in cash, and a note for eight dollars, receipt for which is hereby acknowledged, The Washington Beneficial Endowment Association hereby agrees with the said Daniel S. Jones to pay — unless the beneficiary be changed as hereinafter provided — to Katie Wood Jones, or her legal representatives, the sum of five hundred dollars within sixty days after satisfactory proof of the death of said Daniel S. Jones has been received and accepted by this Association, provided, etc.”

“It is further agreed that no change in the beneficiary named herein, nor assignment of this certificate, can be made without the consent of the Board of Trustees of said Association, and under such conditions as they may prescribe.”

Kate Wood Jones was the wife of Daniel Spaulding Jones. The contract, however, was made with the latter. The trust was to pay to Kate Wood Jones, the wife, or to her legal representatives, the amount of five hundred dollars within sixty days after the death of Daniel S’. Jones. It is a trust then in the Beneficial Endowment Association declared by the husband for the use of his wife, he paying all the consideration, and the contract was with him and not with her. The contract contained a provision that with the consent of the society he might change at any time the beneficiary. He had a right to revoke the interest of his wife and name somebody else as the beneficiary. So that the contract was with him and constantly within his power to change in that respect.

Jones’ wife died about two years before he did; and her legal representatives claim the five hundred dollars because the language of the contract was that the money was to be paid to her or her legal representatives.

If there was no question of the legal representatives there could be no doubt at all that this would be a failure of the trust, and therefore it would be an end of it. The resulting trust would take place In favor of Mr. Jones’ estate. At section 1200 of Story’s Equity Jurisprudence, that doctrine is laid down, and it is a well-established doctrine both as to real and personal estate as to deeds and as to wills. When the object of the trust fails, there is a resulting trust to the grantor. Mrs. Jones dying, it failed as to her, and the question is whether her legal representatives are in any better situation than she was.

In the analogous case of a lapsed legacy, the rule laid down in the books is this, as I shall read from the first volume of Roper on Legacies, page 46.6:

“ The well-established rule respectin g lapse through the death of the legatee in the testator’s lifetime, in cases not affected by the above statute will not be varied by the bequest being made to the legatee, his executors or administrators. For such words are of no importance, inasmuch as those persons would have taken the legacy in succession and by representation, if it had been vested in the legatee, whether expressly named by the testator or not; but since the legatee’s death before the testator, prevented his ever taking any interest in the bequest, it follows that his executors or administrators can by no possibility make a title to that which never rested in the testator. This is the principle of the ■ rule, which equally applies to devisees of real as to bequests of personal estate; so that if lands were devised to A and his heirs, and he died before the devisor, leaving an heir living at the death of the testator, the heir could not make a title to the estate, because he was intended to take it in succession as representative of the devisee, but which was impossible from the accident of the latter dying before the devisor.”

Further, on the same subject, on page 467, the text says:

“Since then a legacy to A, his executors and administrators, will, as we have seen, lapse by his death before- the testator, so will a legacy given to A and his personal representatives; for in each case the additional words are unnecessary and merely express what the law would have directed if the testator had been silent on the subject, viz., that if A survive the testator (an event which the gift implies since no testator could be supposed to mean to give to any but those persons who shall survive him), and afterwards die before the legacy becomes payable, his personal representative shall receive it. Hence, it appears that the mere naming of the executors, administrators, or personal representatives of A is not inconsistent with the rule before mentioned respecting the lapse of legacies, and does not unequivocally show the testator’s intention to substitute those persons in the place of A in the event of A’s death before him.”

As this is a trust, it is to be construed according to the circumstances surrounding the case. If a man buy a piece of land or other property and takes’ the title in the name of his son, the presumption will be that it was intended as an advancement to the son. It does not follow necessarily that the title being in the name of the son, the son shall have it. The father may have intended it as an advancement. But the courts will receive evidence upon that subject whether it was intended as an advancement or not, and if it was not intended as an advancement then the father would have it because he paid the money.

So, in looking at these questions of trust, the court will consider all the surrounding circumstances of the case, and when proper and necessary it will receive parol evidence for the purpose of ascertaining the intentions of the parties. In this case we think that no parol evidence could have made the case any clearer than the circumstances upon the face of the transaction. The beneficiary was the wife of Daniel Spaulding Jones. He intended to leave this for her benefit after his death. The fact that she survived him was a fact which he had no contemplation of at the time. The paper did not provide for what did happen, and there is nothing in the case to show that there was any person who could take from her, or who was considered by him in the matter as taking in case of her death because she had no children, she had no distributees, no near relations.. There is no evidence at all to show that there were any persons in the relation of distributees to the wife in whom he felt any interest at all.

So that we are obliged, from all the circumstances, to come to the conclusion that this trust was a trust intended for the wife alone, and that the words “legal representatives,” as here used, have no signification different from that which is attributed to those words generally in the law; that is persons appointed, either by will or by the law, to administer upon her estate after her death. That being the view of the court, we think that her legal representatives could not possibly take anything in this case, because she herself died before the intestate, her husband, and there was a failure therefore of the trust. The fund, therefore, resulted to the husband, and his estate is entitled to the money.

The decree below is affirmed.

The Chief Justice said:

I cannot give my consent to the precedent here established.

Here is a clear expression of the intention of these parties in the policy itself. The undertaking " is to pay this woman or her legal representatives the amount of money stipulated in this policy. The beneficiary of the trust or of the contract dies. That ended it as far as she was concerned. Her legal representatives survive, and this estate must be taken out of their hands by construction.

Now, if the insured had not lived two years after his wife’s death with the power to reappoint, and if he had not failed to exercise it as he might have done, there would be stronger equitable reasons that would lead us to divert this fund from her representatives to his. But if anything is to be argued from his conduct it is that he affirmed the disposition of this insurance money contemplated in the contract. It is not like the case of a lapsed legacy where a testator wills his estate to a given object and that object disappears before he does. In that case the representatives are an incident to the estate created in the devisee. They only have an existence in' that incident, and it would be promoting the incident to assume that they could inherit or could receive what the ancestor could not. This is a direct contract of the underwriters of this party, with a power in the procurer of the agreement to assign it to a different use which he did not see fit to do during his lifetime. And' while I think that my brothers have followed a pretty fair equitable disposition of the matter, for the fund is doing as much good in one direction as in another, I think they are doing it with violence to this contract.

Mr. Justice James said:

The contract was made between the assured and the company or association having one object in contemplation, the naming of a beneficiary; and, as Mr. Justice Wylie has said, I think that the designation of the legal representatives cannot be construed to be the designation of a new party to come in succession. The fact that her legal representatives are named afterwards does not indicate that they are to take as beneficiaries successively nominated. Clearly on the face of it it is but a single designation, and that is to the wife.  