
    Isaac Boasberg, Resp’t, v. Timothy J. Cronan, Impl’d, App’lt.
    
      (Superior Court of Buffalo,
    
    
      General Term,
    
    
      Filed April 9, 1890.)
    
    1. Benefit societies—Empire Order of Mutual Aid—Assured cannot IMPRESS A TRUST ON THE FUND.
    A member of the Empire Order of Mutual Aid has no property rights in the sum payable on his death and cannot impress it with a trust for the payment of his debts.
    3. Same.
    Defendant was named as beneficiary and agreed to accept the sum as trustee for the benefit of creditors of the assured. In an action by a creditor, Held, that assured had no power to conti ol the disposition of said sum in this manner, and that if the designation were held void on the ground of fraud, equity would compel a distribution among those empowered by the statute to take, among whom creditors are not included.
    The complaint in this action alleges that Daniel Cronan, now •deceased, in his lifetime entered into a contract with a lodge of the Empire Order of Mutual Aid, to insure his life for the benefit of the defendant, in the sum of $1,000. The said defendant, at the request of deceased, agreed to accept said sum as a trustee for the benefit of creditors of deceased, and for the benefit of plaintiff, and to pay said creditors ratably and in proportion to their •claims. Then alleges the indebtedness of Daniel Cronan to plaintiff; that the defendant threatens to appropriate said money to other and different purposes than those provided for in said trust, and to prevent plaintiff from having or receiving any of said money. An injunction was obtained restraining defendant corporation from paying said money to defendant Cronan. Issue was joined upon this complaint and a trial had, which resulted in a judgment in favor of plaintiff for the amount of his claim, with costs. From this judgment the defendant Cronan appeals.
    
      John T. Joyce, for def't; Ullman & Tillman, for pl’ff.
   Hatch, J.

The defendant corporation makes no defense to this action; admits liability to pay the said sum of $1,000 to whoever the court decrees entitled thereto. The question presented upon this appeal is, can the insured during life so far control the fund by the creation of a trust or otherwise as to make it applicable to-the payment of his debts after death ? The answer to this requires an examination of the contract made by the insuring company and the assured, and the character of the interest which the latter takes. The Empire Order of Mutual Aid is a corporation created under and by virtue of chap. 189, Laws 1879. Section 2 of. said act provides that the objects of incorporation are to improve the moral, mental and social condition of the members, to prevent strikes and to aid,1 assist and support members or their families, in case of want, sickness, or death. Section 3 authorizes the creation, management and disbursement of a beneficiary fund.

Section 4 provides: “ Such beneficiary fund as may be ordained suitable by said grand lodge of the state of New York may be provided and set apart to be paid to the families, heirs or legal representatives of deceased or disabled members, or to such person or persons as such deceased member may, while living, have directed. * * * And such beneficiary fund, so provided and paid, shall be exempt from execution, and shall not be liable to-be seized, taken or appropriated by any legal or equitable process to pay any debt of such deceased member.” The proof upon the trial tended to establish, and the court found, that the defendant was duly designated by deceased, in his lifetime, as beneficiary in the sum of $1,000; that said defendant in consideration of said sum agreed to pay the creditors of deceased the amounts due them, pay his funeral expenses and erect a monument over his-grave; that plaintiff was a creditor and became entitled to judgment for the amount of his proved claim. The finding of the court in language is, that defendant in consideration of the sum of $1,000 agreed to pay creditors, etc. If such finding be construed literally it would, if warranted by the evidence, support the judgment rendered, but it is to be construed in connection with the other findings and the proof, and when so construed, it appears that its true interpretation is that the thousand dollars received by defendant is such sum as he received by virtue of his designation as-beneficiary in the certificate issued by the corporation, and alone furnishes the consideration to support the judgment, otherwise there would be a failure of evidence to support the finding. It is the duty of the court to construe and harmonize findings so as to give them effect when possible. Green v. Roworth, 113 N. Y., 467-468; 23 N. Y. State Rep., 149.

It is clear from the provisions of the act of incorporation that the fund authorized to be created has for its fundamental object, so far as the same relates to the payment of the fund after death, the providing a sum of money for the benefit of families, heirs or legal representatives of deceased persons, solely applicable to such purpose, freed from any liability of seizure for debt. The contract of insurance is executory in its character, and under the provisions of this act the agreement of the association was to pay to certain persons named in the statute, or to such person or persons as the insured should designate in his lifetime. There is nothing in the act or in the by-laws of the corporation which enlarges in this regard the rights of the parties with respect to the fund. There is no property vested in the insured, or property right in any sense, and it does not form any part of his estate. Bishop v. E. O. of M. A., 112 N. Y., 627; 21 N. Y. State Rep., 811; Greeno v. Greeno, 23 Hun, 478; Hellenberg v. Dist. No. 1, etc., 94 N. Y., 580.

As it forms no part of his estate, it does not pass to his executor or administrator, and a will is ineffectual for the purpose of making it subject to the payment of debts. Bown v. Catholic M. B. Ass’n, 33 Hun, 263.

In the event of failure of persons to take under the statute as therein named, and in the absence of a designation by the insured, there is no person to take and the corporation is under no obligation to pay. Hellenberg v. Dist. No. 1, etc., supra.

The right, therefore, of the insured in and to the fund created is not a property right, but a right to provide a fund to be disposed of by the statute or by the naked power of designation; beyond this he cannot go in the control of the fund or its disposition. Sabin v. Grand Lodge, A. O. U. W., 6 N. Y. State Rep., 151; M. B. Soc. of Red Men v. Clendinen, 44 Md., 429.

The beneficiary named takes no vested right in the certificate of insurance until the contingent event of death happens. Sabin v. Grand Lodge, A. O. U. W., 28 N. Y. State Rep., 45; Luhrs v. Lodge, 27 id., 88.

If, therefore, the fund provided is not the property of the assured, and he has no property rights therein, he cannot deal with it as property and impress it with a trust for the payment of debts, as the impress of a trust upon the disposition of property necessarily presupposes a property right and interest upon which the trust may fasten; where that fails the whole is nugatory. Creditors dealing with the deceased can in no view be Said to have so dealt upon the strength of the interest of the assured as the act, in terms, gives notice of the exemption from debt, and the limitation upon the power of disposition is equally clear, so no equities can exist in that regard. It is said that but for the agreement upon the part of defendant to distribute the fund he would not have been named as beneficiary, and consequently that having so received it, equity will lay hold upon the fund, impress it with the trust and distribute it accordingly.

If we assume this, to be true, it does not aid plaintiff, for the reason that the trust provided for was in violation of law and beyond the power of deceased to create, and if defendant by fraud procured himself to be designated, and the designation should be held void for that reason, equity might lay hold so far as to fasten upon him a trust ex maleficio, and compel distribution of the fund among those empowered to take, but this would only include the other persons named in the statute who would then be by law empowered to take, and would not embrace plaintiff or other creditors. Matter of Will of O'Hara, 95 N. Y., 403.

This conclusion renders unnecessary an examination of other questions presented by the record.

The judgment appealed from is, therefore, reversed, and a new trial ordered, with costs to abide the event.

Beckwith, Ch. J., concurs; Titus, J., did not sit in this case.  