
    The Masonic Mutual Relief Association vs. Mary McAuley et al
    Equity. No. 7,924.
    J Decided October 30, 1882.
    i The Chief Justice and Justices Cox and James sitting.
    R., at the time, of his death, was a member in good standing of an association in the nature of a life insurance company whose object was, as declared by the charter and by-laws, “to provide and maintain a fund for the benefit of the widow, orphan, heir, assignee or legatee of a deceased member.” By a provision of one of the by-laws if a deceased member had no legal representatives the money they would have been entitled to was to become the property of the association. Another by-law provided that “no change of beneficiary can be made or recognized until submitted to and approved by the board of directors.” R. had joined the society in the lifetime of his first wife, and named her as the beneficiary, she dying, he married again, and died intestate, without having notified the association of inly change of beneficiary. Whereupon three separate claims wore made to the fund. First, by the representatives of the first wife ; second, by the representatives of the husband ; third, by the surviving widow.
    Held, 1. That the language used by the husband in designating his first wife as the beneficiary must be interpreted as meaning only in case she survived him, and as she did not, her representatives were nor. entitled.
    2. That the term “legal representatives” in the clause providing “that where the deceased member has no legal representatives the money shall become the property of the association,” is to betaken as meaning those who are legal representatives in the, contemplation of the charier and, by laws, to wit., the people there enumerated “the widow, orphans, heir or legatee,” &c.
    3. That in the absence of any direction by the deceased, the order in which the parties to be benefited are named in the charter and bylaws is the order in which they are entitled to the fund, viz., the widow ; if no widow, then the orphan; if none, then the heir, &c.; and therefore the widow was entitled to the fund in this case.
    
      STATEMENT of the case.
    Bill of Interpleader certified to be heard in General Term in the first instance.
    The complainant was incorporated by acts of Congress approved March 3, 1869. and March 3, 1875. By the second section of the former act “the particular business and objects of such society or corporation shall be to provide and maintain a fund for the benefit of the widow, orphan, heir, ■assignee or legatee of a deceased member immediately upon proof of such death.” Section 4 authorizes the enactment of such by-laws, rules and regulations as the board of directors may deem necessary for the management of the effects of the corporation. In the by-laws it was provided that—
    “ On the death of a member each surviving member be•comes indebted to the association in the sum of $1.10.”
    “On the death of a member of the association, if he has responded within the prescribed period to all assessments made on him, his widow, orphans, heir, assignees or legatee -shall be entitled to receive as many dollars as there are members in the association at the time of death.”
    “ If a member has no legal representative, such sum of -money as they -would have been entitled to, shall become the property of the association.”
    “ No change of beneficiary can be made or recognized until submitted to and approved by the board of directors.”
    On the 23d of February, 1874, one William Reed became a member of the association upon an application containing the following clause:
    “In the event of his deatli he directs that all benefits arising from his connection with the association be paid to my wife, Ann Reed, unless he shall otherwise order and give 4o the secretary of the association ten days notice of his -desire.”
    Ann Reed, dying, the insured married Sarah Anna Reed, And some time afterwards died intestate without children, leaving his second wife surviving him, and James Reed And Sarah Buchanan his only heirs-at-law. The deceased, 
      after the death of his first wife, had, never notified the association of any change of beneficiary.
    
    Upon his death, the defendants, Mary McAuley and Margaret Woods, claimed the fund due from the association ($1,632) as the representatives of the first wife. The defendants, James Reed and Sarah Buchanan, claimed it as the representatives of the decedent, while the second wife,. Sarah Anna Reed, interposed a claim to it as his widow. Whereupon the association filed this bill of interpleadermaking these parties defendants that they might establish their several claims to the fund.
    R. Ross Perry and Walter S. PERRy for the representatives of the first wife :
    It is apparent that the corporation in question is an insurance company and is engaged in insurance business. May on Ins., (2 ed.,) §550 a; Commonwealth vs. Wetherbee, 105 Mass., 149, 160; State, ex rel., vs. Citizens Benefit Association, 6 Mo. Appls., 163, 164; State, ex rel., vs. Merchants’ Exchange Mut. Ben. Ass., 72 Mo., 147, 149, 151, 158 et seq.
    No particular form is requisite for such a contract. It may be without a policy, it may be by parol. Bliss’ Life Ins. (2d ed.), § 136; Trustees, &c., vs. Brooklyn Fire Ins. Co., 19 N. Y., 305, 307-9; Ellis vs. Albany City Fire Ins. Co., 50 N. Y., 402, 405; Relief Fire Ins. Co. vs. Shaw, 94 U. S., 574 et seq.; 21 Am. L. Reg., 37 et seq.
    
    Neither the insured, during his life, nor his next of kin or-•personal representatives, after his death, can have any claim to the insurance money where the policy is expressed to be for-some one else. Bliss’ Life Ins. (2d ed.), §§ 317, 318.
    Where the policy designates a person to whom the insurance money is to be paid, the person who procures the insurance, and who continues to pay the premiums, has no authority by will or deed to change the designation or title to the moneys. He is under no obligation to contiueto pay the premiums, unless he has covenanted so to do, but if he does so, the person originally designated in the policy will derive the benefit. The change of designation can be made-only by the person originally designated, and, therefore, all such persons must concur in the change. Bliss’ Life Ins., § 337. And see May on Ins., (2d ed.), § 392; Ky. Mas. Mut. Life Ins. Co. vs. Miller’s Adm’r, 13 Bush, 489, 491, 493 ; Gosling vs. Caldwell, 7 Reporter (Tenn.), 410; Robinson vs. Duvall, 12 Reporter (Ky.), 466; Ricker vs. Charter Oak L. Ins. Co., 27 Minn., 193 et seq.; Ballou vs. Gill, Adm’r, 50 Wis., 614-618; Hodge’s Appeal, 12 Chicago L. News, 421; Allis vs. Ware, 9 N. W. Rep., 668; Brockhaus vs. Kenna, 12 Reporter, 168-9; McClure, Ex’r, vs. Johnson, 10 N. W. Rep., 217; Worley vs. N. W. Masonic Aid Ass., 13 Reporter, 233.
    It is true that the contract in this case is different from the ordinary contract of life insurance, in so far as it gives the assured the power of changing the beneficiary. But the insured has neverthe ■. ■ > interest in the “ benefits.” He has only a power to appoint the person who is to receive them, and he must exercise that power in the manner prescribed by the by-laws of the corporation. His failure to exercise it leaves the contract on the same footing as a contract of life insurance in the usual or more common form. Maryland Mut. Ben. Society, &c., vs. Clendennin, 44 Md., 429, 443; Arthur et al. vs. Odd Fellows’ Ben. Ass., &c., 27 Ohio St., 557-560; Duval vs. Goodson, 9 Ins. L. J., 901-904; Ky. Mas. Mut. L. Ins. Co. vs. Miller’s Adm’r, 13 Bush, 494; Folmer’s Appeal, 87 Penn. St., 133-135.
    If Ann Reed, whom the defendants McAuley and Woods, now represent, were now living as the divorced wife of William Reed, she would unquestionably be entitled to the fund in dispute. Conn. Mut. L. Ins. Co., vs. Schaeffer, 94 U. S., 457-462.
    . It is equally clear that whatever rights Ann Reed had in the matter passed, at her death, to her personal representatives.
    Samuel C. Mills, B. T. Hanley and J. J. Darlington for the representatives of the deceased :
    The direction in favor of the wife contained in the application for membership, viz., that in the event of the husband’s death, the-fund be paid to her, should be construed to mean, in the event of his death leaving her surviving him. “ In the event ” implies contingency ; the death of the husband at some time or other was certain. The contingency was his death before hers. This unquestionably was the intention.
    But even where the husband has a policy issued to his wife, payable to her, her executors or administrators, if she dies in his lifetime, and he keeps up the policy by the paymeut of premiums, the decided weight of authority is that his reprepresentatives, not hers, are entitled to the insurance money. See Kerman vs. Howard, Adm’r, 23 Wise, 108; Moehring vs. Mitchell, 1 Barb. Ch., 264; Mut. Ben. Life Ins. Co. vs. Atwoods, Adm’x, 24 Grattan, 497; Eadie vs. Slimmon, 26 N. Y., 9 ; Gambo vs. Covenant Mut. L. Ins. Co., 50 Mo., 44. We have found no cases in conflict with the foregoing, except where there were statutory provisions controlling the decisions ; we have no statutes upon the subject here.
    If the title to the fund passed absolutely to the first wife as is claimed, it was a mere .chose in action, which, doubtless, devolved upon the husband, under the Maryland act of 1798, immediately upon her death. That act, it is true, requires that the husband shall in his lifetime reduce the chose in action into his possession ; but in the case at bar the husband had, at the time of his death, all the possession that the nature of the chose in action in question admitted of. And see Moehring vs. Mitchell, 1 Barb. Ch., 274 ; Dutson, Adm’r, os. Merriiield, Adm’r, 57 Ind., 25. The unmistakable intent of the husband, and the ruLes of law alike, exclude, therefore, the claims of the representatives of the first wife.
    The claim of the widow rests upon the fact that the “ widow ” is the first of the classes of persons named, to provide a fund for whom is declared to be the business and object of the association ; but the construction that the order in which the beneficiaries contemplated in the organization' of the association are named in the order of distribution. would involve both absurdity and injustice, for under that •construction, neither a legatee, nor an assignee for value, would take if the deceased member left any heir, no matter how remote. It is a well-settled principle of construction, that the ordinary rules of descent and distribution shall prewail, unless the contrary intent be apparent.
    The charter prescribes neither any order of distribution, nor any reversion to the association, but expressly provides that the directors shall have full power to make and prescribe such by-laws, rules and regulations as they shall deem needful and proper, for the disposition of the funds of the society not contrary to the charter or to the laws of the United States, and the directors in the exercise of this power, have provided that, in the absence of legal representatives, and not otherwise, the fund shall become the property of the association. Under such a charter and by-laws, the contract between the member and the association differs in no material respect from the ordinary contract of insurance ; and the member unquestionably has a property in the fund, which upon his death, and in the absence of a contrary direction by him, devolves upon his legal representatives or next of kin. It will be seen that we do not claim the entire beneficial interest in the fund to the exclusion of the widow. We simply claim that the designation of a beneficiary made by the decedent failed, because of the death of that beneficiary in his own lifetime, and that he, having made no new designation, there is nothing in the constitution or by-laws of the association to vary the usual order of distribution. There being no children one-half of the fund should go to the widow, and the other half to the brother and sister of decedent.
    C. M. Matthews for the widow of deceased :
    This corporation possessed only such qualities as were best calculated to further the objects of its creation. Dartmouth College vs. Woodward, 4 Wheat., 636; Torrey vs Baker, 1 Allen, 122.
    The object of the association was not. to provide a fund for the benefit of a member, but “ for the benefit of the widow, orphan, heir, assignee, or legatee of a deceased member.” The memberin this case hadbut a power of appointment over “ the benefits arising from his connection with the association,” this power to be exercised or not at the discretion of the member, and when exercised to conform as to the mode of execution to the provision of the charter and by-laws. Arthur vs. Association, 29 Ohio St., 561; Society vs. Clendennin, 44 Md., 430; Life Ins. Co. vs. Miller, 13 Bush, 494.
    No quality of inheritance attaches to this interest as a-a member of the association, the benefits not constituting assets of the deceased member, or, liable to administration or the statute regulating the distribution of the estate of an intestate. 2 Chance on Powers, 1820; Farwell on Powers, 190; Blogge vs. Wilson, 1 Story C. C., 442; Society vs. Clendennin, 44 Md., 430; Arthur vs. Association. 29 Ohio St., 561; Ballou vs. Gill, 50 Wisc., 617; Dietret vs. Association, 45 Wisc., 82; Folmer’s Appeal, 87 Penna. St., 137; Hodge’s Appeal, 12 Chic. Leg. News, 421 (Aug. 21, 1880); Duvall vs. Goodwin, 9 Ins. L. Jour., 901.
    In the case at bar the member exercised this power in favor of his former wife, Ann Reed, -which disposition being ambulatory and liable to be revoked by the member, and vesting the benefits in the appointee only at the death of the donee, lapsed by the death of Ann Reed before her husband, William Reed. 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; Harries Case, Johns., 199; Larkin vs. Larkin, 34 B., 443; Burgess vs. Mowbry, 10 Ves., Jr., 319.
    Neither the heirs of Ann Reed nor of William Reed can, therefore, take.
    The effect of the disjunctive “or,” used in the charter and the by-laws, is to separate from each other the various classes of beneficiaries named, so as to provide for the <( widow,” oí' “ orphans ” or “ heir.” Each class will take in the order named, and no class will take except the preceding class or classes shall have failed.
    The widow is therefore entitled to the fund.
   Mr. Justice Cox

delivered the opinion of the court.

This association was incorporated by an act of Congress, which declares that “ the particular business and objects of such society or corporation shall be to provide and maintain a fund for the benefit of the widow, orphan, heir, assignee or legatee of a deceased member, immediately upon proof of such death.” One sectiou of the act authorizes the enactment of such by-laws and rules as may seem proper to the association, for the disposition'and management of the funds, property and effects of the corporation, in accordance with the provisions of the charter. The only fund that the society have to dispose of is a contribution, payable on the death of a member, of one dollar from each surviving member. In this case the fund to be disposed of is $1,632. The by-laws provide that, on the death of a member of this association, if he has responded within the prescribed period to all assessments made on him, his widow, orphan, heir, assignee or legatee, shall be entitled to receive as many dollars as there are members in the association at the time of death.” Another article provides that “if a member has no legal representatives, such sum of money as they would have been entitled to shall become the propei’ty of the association after deducting therefrom the funeral expenses, if required, which shall not exceed the amount the legal representatives, if any, would have been entitled to and, by another article, it is provided that “ no change of beneficiary can be made or recognized until submitted to and approved by the board of directors.”

There is no express-provision, but it is a right recognized by the practice of the association, that anybody becoming a member may designate the beneficiary, who shall receive the fund payable after his death. When William Reed filed his petition seeking admission as a member, in February, 1874, he directed that, “in the event of my death, all benefits arising from my connection with the association shall be paid to my wife, Ann Reed, unless I shall otherwise order and give the secretary of the association ten days’ notice of my desire.” Reed was admitted as a member. Afterwards his wife died. He married a second time, and afterwards he died ; and now this controversy arises over the fund payable upon his death. It is a three-sided controversy and it has been argued very creditably on all sides.

The fund is claimed, first, by the administrators of the first wife; second, by the administrators of the husband •? and thirdly, by the-widow surviving.

In behalf of the first claim it is’urged that this benevolent-association was virtually a life insurance company; that these provisions in the charter and by-laws make this virtually an insurance on the life of the husband for the benefit of his wife ; that as such, it is a part of her personal property — a chose in action — and that after her death it passes, by the common law, to the husband, but, under a statute of Maryland, unless it be reduced to possession by the husband in his lifetime, it goes back to the personal representatives of the wife, and there was no such reduction to possession in this case, in the lifetime of the husband. He might have reduced it to possession by assigning it to-somebody else, but he did not.

In opposition to this view, it is claimed that, treating the transaction strictly as an insurance on the husband’s life for the benefit of the wife, still, after her death, according to the weight of authority, it passes to him and he has a right to-dispose of it as he pleases, and at his death it passes to his-general estate. Without undertaking to decide this controverted question of law, it will be sufficient to remark that in this case the question at issue is controlled by the particular language of the designation made by the husband. He had the power to designate the beneficiary, and he had a right to do so either absolutely or conditionally, and the direction given by him was that,in-the event of his death, all benefits arising from his connection with the association should be paid to his wife Ann Reed. Now, it is obvious that this direction cannot be literally gratified unless the wife survive the husband, and the whole language of the husband on this point is that of contingency or condition. lie was looking forward to this provision for the benefit of his wife in case she should survive him — that is, in that contingency. His own death was not, of course, contingent; it was an event certain to occur ; but it might be regarded as contingent with reference to some other event — the death of his wife, for instauce — and we think the fair interpretation of the language of the husband is that, in case of his dying before his wife, the benefits arising under this transaction were to enure to her, but not otherwise. To construe it otherwise would be to hold that the design of the husband in making this provision, was that its benefits should go first, to the wife, if she survived, 'but otherwise to her relations ; and it is not to be supposed that this association was organized and sustained by its members for the purpose of benefiting the relations of their widows. We think, therefore, the meaning of the language used by the husband in designating the beneficiary was that the benefits of this provision were to go to his wife only in case she survived him ; and as she did not survive her husband, the provision falls to the ground so far as she is concerned, and the claims of her representatives are out of the question.

The controversy remains, then, between the personal representatives or administrators of the husband and the surviving widow. In behalf of the former, the same general ground already stated is taken, namely, that this is virtually an insurance on the husband’s life and as such would pass to his estate. In some respects it is like a life insurance and in other respects it is different. It was not designated to provide for the creditors of the husband or for those generally interested in his estate ; but for his widow, orphans or immediate heirs ; and, therefore, the charter provides for “the immediate payment to the widow, orphans, heir, assignee or legatee of a deceased member, of as many dollars as there are members in good standing on the books of the corporation.” The charter and the by-laws control the destination of this fund, and they explicitly provide that in the condition of affairs which this case presents, the widow, orphans, heir, assignee or legatee shall be entitled to i’eeeive it. An argument is based on the language of article V, section 5, which provides that where the deceased member has no legal representative, the money shall become the property of the association. From this provision it is argued that if there are legal representatives of the deceased, they must be entitled to the fund. This argument, if it proved anything, would prove too much. It would prove that in a case where there were no legal representatives, notwithstanding the existence of a widow, or an orphan, or heir, the money must go back into the general fund of the association to the direct frustration of the whole scheme and object of the association and in disregard of the express language of its charter and bylaws. We think, therefore, that the term “legal representatives” here means those who are legal representatives in the contemplation of this charter and these by-laws, namely, the very people who are there enumerated, “the widow, orphans, heir or legatee.” The fund is to go to some one of these parties. They are mentioned disjunctively ; the money is to be paid to the widow, or the orphans, or the heir, or the assignee or legatee. Now, that means one of two things, either that it shall go to some one of these to be selected by some authority, or else that they are to have precedence in the order in which they are named. But there is no authority provided for or indicated in either the charter or the by-laws by whom any one of these beneficiaries shall be selected ; and, therefore our conclusion is that the order in which they are named is the order in which they are to benefit by this fund ; first, the widow ; if there is no widow, then the orphans ; if there is no orphan, then the heir, See. In this case the question is between the widow and the personal representatives. The latter are excluded entirely by our construction of the by-laws, and therefore, the decree will be that the widow shall take the fund.  