
    Walsh v. Walsh et al.
    
    
      (Supreme Court, General Term, Fourth Department.
    
    November, 1892.)
    1. Mutual Benefit Insurance—Death of Beneficiary before Member.
    Laws 1879, c. 496, §§ 5-7, incorporating a mutual benefit association, provide that the object of the corporation is to aid, assist, and relieve members, “or their families in case of death, ” and authorize it to create a beneficiary fund for the relief of members “and their families, ” which may be set apart and paid over “to the families, heirs, or representatives of deceased members, or to such person or persons as such deceased members may, while living, have directed, ” etc. Held, that where the beneficiary named in a certificate of such association dies before the member, the sum due on the certificate should be distributed as intestate property.
    2. Same—By-Laws—Construction.
    Where a member of such association at his death left, him surviving, a wife, and brothers and sisters, but no children or parents, the wife is not excluded from participation in such distribution by a by-law providing that, “in case of a failure of or imperfect designation, then the amount shall be paid to the legal heirs of deceased members, ” since the words “legal heirs” must be construed with reference to the purposes of the association, and are intended to describe the person or persons who would take in cases of intestacy.
    Appeal from special term, Chemung county.
    Action originally brought by Harriet Walsh against the Catholic Mutual Benefit Association on a certificate of membership issued to William Walsh, deceased, plaintiff’s husband. Subsequently the association paid the amount due into court, and, by order of interpleader, Patrick Walsh and others, brothers and sisters of William Walsh, deceased, claiming to be entitled to the amount due on the certificate, were substituted as defendants. The ease was tried to the court without a' jury, and from a judgment directing the payment to defendants of the sum payable under the certificate, plaintiff appeals. Reversed.
    The action was tried before a court without a jury, and the findings of fact made by the trial judge were substantially as follows: That the Catholic Mutual Benefit Association was organized under chapter 496, Laws 1879; that at the time stated in the complaint there was in existence in the city of Elmira a branch known as “Branch No. 51;” that the general laws of the association provided: “On or before sixty days after due notice and proofs of death of a member in good standing shall have been received, the amount as set forth in the beneficiary certificate of said deceased shall be paid to the person or persons designated therein, or, in case of failure of or imperfect designation, then the amount shall be paid to the legal heirs of the deceased member;” that William Walsh was a resident of Elmira, became a member of the Elmira branch of said association, September, 1879, and remained a member in good standing until his death; that when he became a member a certificate of insurance was issued to him, entitling him to participate in the beneficiary fund of the association to the amount of $2,000, “which sum shall at his death be paid to his mother, Mary Walsh;” that this certificate was in force and valid at the time of Walsh’s death; that the beneficiary named died August 17, 1887; that William Walsh was married to the plaintiff in June, 1888, and died March 20, 1890; that no change in the designation of the beneficiary was ever made; that there was no issue of the marriage of Walsh to the plaintiff, and he left, him surviving, no parent or descendant; and that the defendants are his brothers and sisters, and were all living at the time he became a member of the association. As conclusions of law the court held: (1) At the time of the maturity of the claim under the certificate of insurance, there was a failure of designation of the beneficiary to whom such insurance should be paid; (2) the amount due under the certificate was at the commencement of this action and is now payable to the legal heirs of William Walsh, deceased; (3) the defendants, the brothers and sisters of William Walsh, are his sole legal heirs; (4) the plaintiff has no cause of action; (5) the defendants herein are entitled to judgment directing the payment to them of the sum payable under the said certificate of insurance.
    The statute incorporating the supreme council of the Catholic Mutual Benefit Association contained the following provisions: “See. 5. The object of this corporation shall be to improve the moral, mental, and social condition of its members, and to educate them in integrity, sobriety, and frugality, to endeavor to make them contented with their position in life, and to aid and assist members or their families in case of death. Sec. 6. It shall be lawful for this corporation to create, hold, manage, and disburse a beneficiary fund, sufficient to pay all losses and expenses incident to the corporation, and for the relief of members and their families of the branches and grand councils, under the jurisdiction of this corporation, under such regulation as may be adopted by said corporation. Sec. 7. Such beneficiary fund as may be ordained suitable by said corporation may be set apart and provided to be paid over to the families, heirs, or representatives of deceased members, or to such person or persons as such deceased members may, while living, have directed, and the collecting, management, and disbursement of the same, as well as the person or persons to whom, and the manner and time in which, the same shall be paid, on the death of a member; Shall be regulated and controlled by the constitution, by-laws, rules, and regulations of the corporation; and such beneficiary fund so provided and paid shall be exempt from executions,'and shall not be liable to be seized, taken, or appropriated by any legal or equitable process, to pay any debt of said deceased member. Diocesan beneficiary districts may be set apart from time to time, and shall be governed by this law. The general and beneficiary accounts of said corporation, and those of its branches, grand councils, and districts, shall be kept entirely and distinctly apart, and in separate books and accounts.”
    Argued before Hardin, P. J., and Martin and Merwin, JJ.
    
      Frederick Collin, for appellant. Babcock, Baxter & Gibson, for respondents.
   Martin, J.

This action was upon a certificate of membership which was in the nature of a policy of life insurance, issued to William Walsh by the Catholic Mutual Benefit Association. The action was originally brought by the plaintiff, who was the widow and administratrix of the assured, against the association. Subsequently the association paid the amount due upon the certificate into court, and by an order of interpleader the brothers and sisters of the decedent were made defendants. The action seems to have been tried upon the pleadings, although by stipulation either party was permitted to refer to or read in evidence any part of the constitution or by-laws of the association. The question involved on this appeal is whether the plaintiff was entitled to the $2,000 paid on this certificate, or whether it belonged to the defendants. An examination of the statute incorporating the association discloses that its real and avowed purpose was to aid, assist, and relieve members and their families during the life of the members, and aid and .assist their families after death. Laws 1879, c. 496, §§ 5, 6. After declaring such to be the purpose and object of the association, the statute authorizes it to accumulate a fund which may be set apart and paid over “to the families, heirs, or representatives of deceased members, or to such person or persons as such deceased members may, while living, have directed.” In Bishop v. Grand Lodge, etc., 112 N. Y. 627, 20 N. E. Rep. 562, which was a case involving the construction of a phrase in all respects like this, it was held that “the families, heirs, or legal representatives” meant and included those who would take such property in cases of intestacy. The doctrine of that case is decisive of 'this, unless the by-laws of the association have changed the persons entitled to the benefit under such a certificate, where no designation has been made. The provision relied upon to effect that change in that, “in case of a failure of or imperfect designation, them the amount shall be paid to the legal heirs of the deceased member.” The? words “legal heirs” are inapt and inappropriate when applied to such property; hence it is obvious that they were not used in their strict legal sense» Nor do we think they were intended to include only the “next of kin.” As we have already seen, the purpose of the association was to aid, assist, and relieve members and their families during the life of the members, and upon their death to aid and assist their families. Manifestly, this by-law was established in contemplation of the purposes of the association, and with an intent to carry them into effect. We cannot believe that, after the purposes of .the association to aid and assist the families of deceased members had been so carefully and plainly stated, the association intended by its by-laws to so change that purpose as to aid only their heirs at law or next of kin, and thus-ignore the wife of a member, who with him, when living, constituted his-family. The words “legal heirs" should be construed with reference to the general purpose of the association, and when so construed were, we think» intended to describe the person or persons who would take such property in cases of intestacy. This construction is consistent with the statute, seems to give effect to the real purpose of the association, and is, we think, sustained by the authorities. Hannigan v. Ingraham, (Sup.) 8 N. Y. Supp. 232; Lawton v. Corlies, 127 N. Y. 100, 106, 27 N. E. Rep. 847; Heath v. Hewitt, 127 N. Y. 166, 27 N. E. Rep. 959; Griswold v. Sawyer, 125 N. Y. 411, 26 N. E. Rep. 464; Woodward v. James, 115 N. Y. 346, 22 N. E. Rep. 150; Association v. Hanson, (Sup.) 6 N. Y. Supp. 161. Judgment reversed, and a. new trial ordered, with costs to abide the event. All concur.  