
    National Mutual Aid Association v. Gonser.
    
      Mutual protection and relief association insurance — Right of assured to bequeath proceeds of certificate of membership to stranger.
    
    .1. A certificate of membership issued by an association organized under the provisions of the Revised Statutes, section 3630, “for the purpose of mutual protection and relief of its members, and for the payment of stipulated sums of money to the families or heirs of the deceased members,” which by its terms is made payable to the assured member, “or any person designated by his will, or his heirs, if no person is designated herein, or by will,” within ninety days after proof of death of the assured member, does not authorize such member, by testamentary appointment, to constitute a person a beneficiary of such insurance, who is not of the family of the assured, or may not, upon his death, become his heir.
    2. A bequest by an assured member of such a company, of the proceeds of his certificate of membership to a stranger or a creditor, does not constitute such legatee an “ heir” of the testator, in the statutory sense of that term.
    Error to the District Court of Holmes county.
    The action below was by the defendant in error, Absalom B. Gonser, against the plaintiff in error, an association formed for the “ mutual protection and relief of its members, and for the payment of stipulated sums of money to the families and heirs of the deceased members,” under the authority of the legislation embodied in the Revised Statutes, section 3630, and having its principal office in the city of Columbus, Ohio.
    On the 30th day of July, 1879, this association executed and delivered to one Wilhelm, Kebaugh, a resident of Holmes county, in this State, a certificate of membership, whereby it undertook, upon sufficient consideration and in the following terms, to “ assure the life of William Kebaugh in the amount of such sum as will equal seventy-five per cent, of the amount collected of the assessments made for the payment thereof, but not to exceed $2,000. And the said association does hereby promise and agree to pay the amount of said claim at its office in Columbus, Ohio, in conformity with the rules and regulations of the association, to William Kebaugh, or any person designated by his will, or his heirs, if no person is designated herein, or by will, within ninety days after due notice and proof of death of said party, whose life is hereby assured.”
    This certificate was by its terms assignable by the consent of the association indorsed thereon.
    Kebaugh accepted this certificate and remained a member of the association until his de-ath.
    On the 26th day of December, a. d. 1879, Kebaugh duly made and published his .last will. Qn the 16th day of December, 1880, he died. On the 27th day of December, 1880, his will was duly probated in and by the Probate Comd of Holmes county. By the 3d day of January, 1881, full proofs of the death of the assured were duly made to the association.
    The dispositive parts of the will are as follows:
    “ Item I. I, Wilhern Kebaugh, of Millersburg, Holmes county, Ohio, being of sound mind and memory, do make ,and publish this my last will and testament, hereby revoking all other wills or codicils made by me. And I further state that I have assigned to Absalom B. Gonser, of said county, my certificate of life insurance No. 500, in the National Mutual Aid Association, of Columbus, Ohio, issued the 30th day of July, 1879, for two thousand dollars, upon the valuable consideration that the said Gonser has often befriended me with kindness and kindly offices, without which it would have often been difficult for me to have lived in comfort, and also for money received from him from time to time, during the last ten years, aggregating the sum of over eight hundred dollars, all of which was fully released and canceled by him at the time of the .assignment of said certificate.
    “And now, for the purpose of fully complying with the rules and regulations of said association, with which I have been made acquainted by the agent thereof, and of the requirements of said certificate, and for the purpose of placing it beyond doubt that my said friend shall have the full benefit of said certificate and the proceeds thereof, when payable according to its terms. I make this my last will and testament, in reference only thereto, not intending, however, to make a disposition of any other property or means belonging to me, and if I should at any time hereafter dispose of my other property and means by will, it is my iutention the same shall not, by general descriptive words or otherwise, have any effect upon the bequest herein made.
    “ Item II. I do hereby bequeath to Absalom B. Gonser, of Millersburg, Ohio, who has long been my friend, all my right, title, and interest in and to certificate ‘No. 500,’ in the National Mutual Aid Association of Columbus, Ohio, certificate on the life of Wilhelm Kebaugh, of Millersburg, Ohio, in favor of himself, issued the 30th day of July, 1879, and all proceeds which may hereafter become due by the terms of said certificate, the application on which it is based and by the rules and regulations of said association. Said certificate is issued for the sum not exceeding two thousand dollars; the said Absalom B. Gonser is to have the full benefit of said insurance, and I hereby designate him, to whom all the proceeds thereof are to be paid thereunder at my decease, and under the rules of said association, and said association relinquishing all and every claim thereto by the execution hereof and the assignment hereinbefore referred to.”
    Kebaugh died solvent, requiring no part of the proceeds of his certificate to pay his debts or costs of administering his estate.
    At the time- of his death the association had outstanding and in force more than six thousand certificates of membership, liable to be assessed by it in the sum of $6,000, for the payment of his certificate. No part of any claim under this certificate has been paid.
    The petition of Gonser in the court below states the foregoing facts, has annexed thereto a copy of the will of Kebaugh as a part of it, and concludes with a prayer that the amount due-him on the certificate may be found, the liability of the defendant determined, and that he may have judgment against the defendant for the sum of $2,000, with interest, or for such sum as may be found due him on the certificate, with interest. The facts recited in the will are not substantively averred in the body of the petition.
    The defendant below demurred to this petition for alleged insufficiency of the facts stated therein.
    This demurrer was overruled, and judgment rendered as prayed for in the petition. This judgment was affirmed by the District Court on error; to reverse which judgments the present proceeding is prosecuted.
    The overruling of this demurrer and rendering judgment upon the petition are assigned as ground of reversal.
    
      M. A. Daugherty, for plaintiff in error.
    
      D. 8. Uhl and Critchfield tif Huston, for defendant in error.
   Owen, J.

Did the trial court err in overruling the demurrer to the petition and rendering judgment thereon against the defendant below ?

That the plaintiff in. error had no power to issue certificates of membership, payable upon the death of an insured member, to a person not an heir or of the family of a deceased 'member, and that such a certificate is void, is too well established to admit of controversy. The State v. The Central Ohio Mutual Relief Association, 29 Ohio St. 399; The State v. Moore, 38 Ohio St. 7; The State v. The Standard Life Association, 38 Ohio St. 281; The State v. People’s Mut. Ben. Association, 42 Ohio St. 579.

By the terms of the certificate before us the death claim was made payable to the assured, Wilhelm Xebaugh, “ or any person designated by his will, or his heirs, if no person is designated herein, or by will.”

If the assured may designate the beneficiary of the insurance by testamentary appointment (a question the determination of which is not necessary in the case before us), it is very clear that such beneficiary must be either a member of his family, or one who, upon his death, may be his heir. There is no averment in the petition that Gonser was a member of the family of the assured, or that he is his heir. It is maintained by him, however, that the recitals of the will disclose such relations between him and the assured as entitle him to be regarded by the court as a member of the family of the assured.

This calls upon us to accept the mere recitals of the will as a substitute for substantive averments of fact in the petition, and would do violence to the rule of pleading which requires the facts relied upon by a party to be stated in his pleading, either by direct averment or by pertinent reference. Neither is done iu the case before us.

It is further maintained that the assured constituted Gonser his heir by testamentary appointment.

If this view is tenable, it is in the power of each insured member, by will, to constitute him a beneficiary of, the insurance who is not permitted by the company’s charter to share in its benefits. The terms of the will indicate that its purpose was to give effect to a prior assignment of the policy to which the company had not given its assent. This court has already held, in The State v. People's Mutual Benefit Association, supra, that such an association has no power to issue certificates payable to a named beneficiary, “ or assigns,” as this would authorize the creation of a class of beneficiaries neither contemplated nor authorized by the company’s charter.

If an insured member may, by testamentary appointment, constitute one a beneficiary who is neither a member of his family, nor may, upon his death, become his heir, he may thereby accomplish all the practical effects of an assignment of his policy, and thus defeat one of the declared objects of the statute.

But if we were at liberty to regard the recitals of this will as equivalent to substantive averments of fact in the petition, we could ascribe to Gonser no other relation than that of a creditor of the testator; and, as we have already seen, creditors are not of the class who may be created beneficiaries of such insurance. '

It is further maintained by Gonser that as this company was organized, among other objects, for the “ mutual protection and relief of its members,” the assured member had the right, in his life-time, and for his own “protection and relief,” to make such use or disposition of the policy, either by hypothecation, by assignment, or by will, as would best yield such result. This argument involves the presupposition that Wilhelm Kebaugh, the assured member, is the party for whose benefit this policy was issued. It is in no sense an endowment policy. True, it is in terms made payable “ to Wilhelm Kebaugb, or any person designated,” etc., but it is expressly made payable “within ninety days after due notice and pYoof of” his death. It is clear that this policy contemplated that its benefits were destined to accrue to the person designated by the will of the assured, orto his heirs,if no such designation were made. It follows that, to entitle himself to recover upon this policy, Gonser must bring himself within the operation of the second declared purpose of the statute, to wit: “ for the payment of stipulated sums of money to the families or heirs of the deceased members of such company.” Gonser’s petition fails to bring him within either designation.

It is further maintained, in support of the petition, that the company, by the terms of its policy, authorized Kebaugh to make this will, and that it is thereby estopped to deny its liability.

Assuming that it was within the power of the company to issue a certificate in this form, and that the assured member was vested with the power, by testamentary appointment, to designate the beneficiary, this power ought, by every consideration of public policy and of sound construction, to heve been so exercised as to effectuate and not defeat the objects of the company’s charter. If the language of the certificate be capable of two constructions, one of which is consistent with the statute and the other at war with it, it is our plain duty so to construe it as to give it effect according to the true intent and purpose of the law. If, then, Kebaugh was by the policy vested with power to appoint, by will, the beneficiary under it, the law plainly directed him to select such beneficiary from his family or heirs, and Gonser, being but a stranger, or, at best, a creditor, is in no position to profit by Kebaugh’s perversion or abuse of the power of appointment with which the policy invested him.

This is no case for the application of the principle of estoppel. This court has held that a contract by such a company “ to pay, in case of a member’s death, ‘ to himself or assigns,’ ‘ to his estate,’ ‘ to his executors or administrators,’ or to any person, whether a relation or not, who is not of his family or heirs, is against public policy, and void.” The State v. The Standard Life Association, 38 Ohio St. 282.

The moment that the certificate before us is brought, by construction, within the view contended for by ■ Gonser, that moment it falls as a vain and void thing, and considerations of graver moment than those of mere private right or contract, call upon us to leave the parties to it where we find them.

We are not called upon, in the present case, to determine or discuss whether any or what claim the heirs of Kebaugh may have under this policy. It is sufficieut for the disposition of the case that we find and declare that Gonser has failed, by the averments of his petition, to show himself entitled to recover upon it.

The court of’ common pleas erred in overruling the demurrer to the petition and entering judgment thereon, and the district court erred in affirming such judgment.

Judgment reversed.

Okey, J., took no part in the decision of this case.  