Massey v. Mutual Relief Society — 2 N.Y. St. Rep. 487

Majority

p. 487

Samuel Massey et al., Resp’ts, v. Mutual Relief Society of Rochester, N. Y., Appl’t.^[1]

(Court of Appeals,

Filed June 1, 1886.)

Headnote

Insurance — Mutual benefit societies — Laws 1875, chapter 267— Benefits may be payable to strangers.

There is nothing in chapter 267, Laws 1875, under which defendant was incorporated, which restricts the objects of the societies formed under it to the relief of families of their members, and where, by its by-laws, each member, in "consideration of the sums contributed by him, became entitled to an instrument similar to a policy of insurance, and v as empowered to designate to whom the insurance should be paid upon his death. Held, that the designation of plaintiff, not a member of his family, as a beneficiary, was not in contravention of the certificate of incorporation, which stated the object of the society to be “to combine the efforts of all its members with the view to effect mutual relief, a d, and systematic contributions of benevolence and charity during their lifetime, and to their respective famille , from time to time, when rendered necessary by richness or pecuniarry ddstresss.”

Appeal from a judgment of the general term supreme court, third department, entered upon an order affirming a judgment, entered upon a verdict for plaintiff.

John M. Dunning, for app’lt; Nathaniel C. Moak, for resp’ts.

The defendant was organized under chapter 267 of the Laws of 1875, entitled “An act for the incorporation of societies or clubs for certain lawful purposes. ” The purposes enumerated in the act for which societies may be incorporated under it are quite numerous, including social, political, sporting, literary and other objects, and also “mutual benefit” and “benevolent” purposes. The subject of fife insurance is not among the enumerated objects, unless it is embraced in the term “mutual benefit” or “benevolent.” There is no restriction in the act which requires that the benefits or benevolence be confined to members or the families of the members.

Any five or more citizens of full age may form themselves into such a corporation by making and filing the prescribed certificate, stating the name of the society and its particular business and objects, and they may adopt a constitution, by-laws and rules.

The certificate Of incorporation of the defendant, which was filed April 21, 1877, states the object of the society to be “to combine the efforts of all its members with the view to effect mutual relief, aid and systematic contributions and charity during their life-time, and to their respective families, from time to time, when rendered necessary

p. 488

by sickness or pecuniary distress.” Here again there is no specific mention of life insurance nor any restriction of beneficiaries to the families of members, except when aid is rendered necessary by sickness or pecuniary distress, and from the context it is evident that this clause of the certificate treats of aid contributions to be furnished during the life-time of the members respectively. In the by-laws appears the first direct reference to anything of the nature of life insurance. Section 2 of article 1 of these by-laws declares that the objects of the society shall be to secure mutual benefit and protection to its members, and to furnish aid to their families or assigns in case of a member’s death, and section 3 states that “the plan of the society will be to issue certificates for a sum not to exceed $2,000, to be paid to the heirs or beneficiaries of deceased members named in his certificate, from funds arising from assessments for the payment of death claims according to the schedule of rates hereinafter adopted.” The by-laws then proceed to organize a system similar to that of a mutual life insurance company. A medical examination is required as a condition of admission to membership, an entrance fee and small annual dues are payable, and members are also required to pay assessments to meet death losses, on a scale graduated according to the age of the member at the time of his admission; and upon the death of each member, after the filing of the required proofs, the treasurer is required to pay to the legal representatives of the deceased member, or to such heirs or beneficiaries as are named in his certificate, the sum of $2,000.

There is nothing in the by-laws which requires that the beneficiaries named in the certificate should be members of the family of the deceased member, and if no beneficiaries are designated, the payment is to be made to his legal representatives. The power of the company to create a fund for the insurance of the lives of its members is not questioned on this appeal, and we do not, therefore discuss it. The act of 1875 authorizes the incorporation of societies for purposes of “mutual benefit,” and it must be under this head that the power is claimed to contract for the application of the joint contributions of the members to the payment of a gross sum to the legal representatives of each member, or to such beneficiary as he may designate to receive it upon his death.

There is nothing in the act which restricts the objects of the societies formed under it to the relief of families of their members. They may be formed for general purposes of benevolence and for many other objects, such as social, political, athletic, sporting, etc. Neither does the certificate of association of the defendant restrict the application

p. 489

of its funds to the relief of a member or his family, except where such relief is to be extended during the life of the member.

• But the by-laws disclose the plan by which the society proposed to carry out the object stated in the certificate, viz., “ to combine the efforts of all its members, with the view to effect mutual relief, aid and systematic contributions of benevolence and charity during their life-time,” and this plan was to combine their contributions so as to secure mutual benefit to the members and to afford aid to their families or assigns, in case of a member’s death, by issuing the certificates of membership before referred to, whereby the payment of $2,000 was secured to the legal representatives of each member on his decease, or to such other beneficiaries as he might cause to be designated in the certificate. By this means each member, in consideration of the sums contributed by him to the funds of the society, became entitled to an instrument similar to a policy of insurance upon his life, and was empowered to designate the person to whom the stipulated sum should be paid upon his death. This power was a present benefit to the member, as he might use it for the purpose, not only of malting future provision for some member of his family, or some other object of bis benevolence, but even to raise money to supply his own immediate necessities, and it was no concern of the society in what manner he made it available. The society could not in any event escape the payment of the stipulated sum, for if, as it now claims, the designation of a person not a member of the family of the deceased, was void, the payment would, according to the terms of the by-laws and certificate, be due to his legal representatives.

For the reasons stated we are of opinion that the designation of Massey as a beneficiary was not in contravention of the certificate of incorporation. That certificate did not contain the restriction which appears in the certificate of incorporation referred to in the case of State v. Central Ohio Mutual Belief Association ( 29 Ohio St. 399 , 403). In that case the certificate stated the object of the association to be “for the 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 of the association.” And in Folmer’s Appeal ( 87 Penn. St. 133 , 135), the charter of the relief association declared, “ The object of this association shall be the relief of widows, orphans or families of deceased members.” The language in the cases cited was clearly restrictive, but in the present case, the certificate of incorporation is much more broad. It declares the object of the association to be, to combine the efforts

p. 490

of the members with a view to effect mutual relief, leaving the details of the plan to be provided in the by-laws, and these by-laws provided for the system of life insurance before detailed, with the power to each member to designate any person he might choose, to receive payment.

The judgment should he affirmed, with costs. - All concur.