Case 16 — Action to Determine the Right to a Benefit Fund

Oct. 5.

#### O’Neal v. O’Neal—O’Neal’s Admr. v. O’Neal.

APPEAL FROM MABION CIRCUIT COURT.

Benefit Societies — Death of Beneficiary Named.

Held: Where a member of a benefit society took out a benefit certificate payable to his wife, naming her, and after her death he married again, and died childless, leaving his second wife surviving him, but without having named another beneficiary, the widow is entitled to the benefit fund (under a provision of the charter securing the fund to the “family” of the deceased member), to the exclusion of the father of deceased, who was not a member of his family, or dependent upon him for support, and also to the exclusion of the administrator; it being provided by the charter that in no event shall the fund be liable for any debt of the member.

BEN. SPAULDING, Attorney for appellant, Mrs. Kate O’Neal.

i.A Court of Equity should look to the object sought to be obtained by those making a charter granting special privileges. Leaf v. Leaf, 92 Ky., 171; Manning v. Ancient Order United Workmen, 86 Ky., 136; Schellinger v. Boes, &e., 85 Ky., 357; Am. & Eng. Ency. Yol. 16, page 48; Riley v. Riley, 44 Wis. N. W. Rep., 112.

C. S. HILL, Attorney for appellant.

1. Section 162 of the Constitution of the order provides that in the event of the death of all beneficiaries, selected by the member before the decease of such member if he shall make no other or further disposition thereof, the benefit shall be paid to the heirs of the deceased member.

2. We must therefore look to the statute laws of Kentucky to know who are the heirs, and how they take under the statute.. Basey v. Adams, 31 Ky., 377.

3. A life policy is personal property for all intents and purposes, A policy is not a testament, 'but it is in the nature of a testament, and the court should construe it as far as possible as a will — 79 Ky., page 228.

H. P. COOPER, Attorney for appellee.

1 'The benefit certificate in controversy was taken out by decedent for the benefit of his wife, Elizabeth, who was then living. *114After her death, he married his second wife, Kate O’Neal, who survives him and now claims to he the beneficiary, hut never at any time did the husband apply for or indicate a desire to have his second wife's name entered in the benefit certificate as his beneficiary.

2. Appellee Ben O’ Neal, being the only surviving parent of the deceased member and the defendant, Kate O’Neal, being a widow of the deceased member, they were under sec. 2132 Ky. Stats., ■each entitled to one-half of the fund in controversy. 79 Ky., 229; Duvall v. Goodson; By Laws secs. 6, 161 & 162 of the order.

Opinion cur the coubt by

JUDGE BXJRNAM

Reversing.

Iii 1882,. Henry O’Neal procured from the Catholic Knights of America a benefit certificate for $2,000, pay-ble at his death to his wife, Elizabeth O’Neal. In 1891 Elizabeth O’Neal died without leaving children surviving her, and in 1893 Henri' O’Neal married the appellant Kate O’Neal. After the death of his first wife, who was named as the beneficiary in the certificate, he continued to pay the premiums, but named no- other beneficiary. In 1898 he died intestate and childless, leaving surviving him his father, the appellee Benjamin O’Neal, and his wife, the appellant, Kate O’Neal. Subsequently thereto, in January, 1899, the Catholic Knights of America instituted this suit, making the father and wife and the administrator of decedent defendants, and recited that the administrator claimed the fund due from the company for the benefit of the estate of the deceased, while the father and widow each claimed the right to receive the whole of the $2,000 due by the company, and asked the court to adjudge to whom the fund belonged and should be paid. Each defendant answered, asserting title and ownership to the fund, and it was adjudged' by the circuit court that the $2,000 fund should be paid equally to the father and wife of the deceased, and from that judgment the administrator of decedent appeals, and the wife also appeals from *115so much, of the judgment as bolds the father of her deceased husband entitled to one-half of the fund. The corporation known as the “Supreme Council Catholic Knights of America,” was incorporated by the Legislature in an act approved April 30, *1888. The*second section of the original act defines the object of the corporation to be “to unite fraternally all acceptable Catholics of every profession, business and occupation; to give all possible moral and material aid in its power to members of the organization, by holding instructive and scientific lectures, by encouraging each other in business and assisting each other to obtain employment; to establish and maintain a benefit fund from which' a sum not to exceed two thousand dollars shall be paid at the death of each member, to his family or be disposed of as he may direct.” Section *7*of the charter provides: “That the said supreme council shall have the power to create, hold and disburse the funds named in the object of the corporation for promoting benevolence and relieving the sick and distressed, under such regulations as it may deem necessary to adopt; and said fund shall be exempt from execution, and shall under no circumstances be liable to seizure or appropriation by any legal er equitable process for any debt or debts of any of its living or deceased members.” It is provided by section 162 of the Constitution or by-laws of the organization that, “in event of the death of all of the beneficiaries selected by the members before the decease of such member, if he shall make no other or further disposition thereof, the benefit shall be paid to the heirs of the deceased member.”

“The charter of the company prescribes who shall become members of the corporation, their obligations, and who shall become the beneficiaries of the members after *116their death; and it is not in the power of the company, or of the member, or of both, to alter the rights of those who by the charter are declared to be the beneficiaries, except in the mode and to the extent therein indicated.” See Insurance Co. v. Miller’s Adm’r, 13 Bush, 494. Section 2 of the charter of the company provides that a sum not to exceed $2,000 should be paid at the death of each member to his family, or be disposed of as he may direct. Henry O’Neal had a right, by virtue of his contract with the company and under this provision of its charter, after the death of his first wife, to have designated another beneficiary of the sum provided by the benefit certificate. Having failed to exercise this right, the fund, under the provisions of the charter of the company, belonged to his family. “An important difference between the ordinary insurauce' companies and benefit societies consists- in the fact that the beneficiary of the latter are generally limit-ited and restricted to the family, heirs, and dependents of the insured, and these restrictions of the charter must be observed in making contracts, and the society has no power to go beyond them.” See 16 Am. & Eng. Enc. Law, p. 46. If, as contended, the heirs of a deceased im elude persons who are not members of his family, or who are not dependent upon him for support, then the by-law in question conflicts with the provision of the charter, and is inoperative, and can not prevail over the unequivocal provisions of the charter securing the fund to the family of the deceased. The question, then, to be determined, is, who is the surviving family of the deceased? Webster defines the word “family” as “a group composed of the husband, wife and children,” and, in the popular interpretation of the meaning of the word, the wife or mother is always the central and important member of the fam*117ily, about whom every domestic interest centers. In the case of Schillinger v. Boes, 85 Ky., 357, (3 S. W., 427), the husband took out benefit certificates payable to “his wife, Katherine Boes,” and it was claimed that the fund belonged to the wife, and was liable for her debts, and the chancellor adopted that view, and subjected her share to the payment of her debts. But this court held that the fund, although payable to the wife, was for the benefit of the family of the member. The court said: “The beneficiary fund in this order is created fon the relief of the members and their families, and by the organic law of the order that necessarily enters into and becomes a part of the certificate. The order is required to disburse this beneficiary fund for the benefit of the family of tire member as well as the member himself. It may be that the member may name a particular member of his family to whom he desires the money paid and the certificate issued,, but when issued to the wife it follows that it is for the benefit of the members of the family.” In the case of Riley v. Riley, decided in the Supreme Court of Wisconsin, and reported in 44 N. W., 112, the action was against the Masonic Benefit Association, an incorporated company carrying en the business of life insurance on the mutual benefit plan. In that case Robert Riley had taken out a certificate of insurance payable to his wife, Elizabeth Riley, or such other person as might be entitled to receive the insurance. The beneficiary died leaving the husband and children surviving. Subsequently the husband married' the plaintiff in that action, and died intestate. The question was, who was entitled to the insurance money, — ■ the plaintiff, who was his widow, or the children by his first wife? The court said: “The plaintiff is Riley’s widow, and it is the widow who is to have the avails of the *118policy where the insured had. giren no other direction as to the person to whom it is to be paid. The declared object of the association is to afford aid to the widow and orphans. The second wife, haring lost her husband, may be as meritorious as the first wife, left a widow. Suppose the husband had surrired both wires, haring no children by. the first, but learing children by the second; could it be claimed with, any reason that these children would not be entitled to the insurance money? It might be argued with, as much consistency that it was not intended the insurance should be paid them as is now insisted that it should not be paid to the widow of the second marriage. Such a refinement upon language is not to be .indulged in in the construction of these policies, which are usually drawn by business men; who use language in its common meaning.’' And it was held that the widow, and not the children, was •entitled to the insurance money. In the case of Given v. Insurance Co. (Wis.) 37 N. W., 817, the certificate was to be paid to “Sarah Giren, my wife.” Sarah died, her husband surriring her. He made no change as to the beneficiary, but married again. He afterwards died, learing plaintiff as his widow by the second marriage. He had two children by his first wife and one by his second. It was held that the appointment of the first wife as beneficiary was reroked by her death, and that the widow by the second marriage was entitled to the insurance under the prorisions of the charter. In the case of Arthars v. Baird, 8 Pa. Co. Ct. R., 67, it was held that the member’s wife was preferred to his mother, within the meaning of the laws of a benefit society, prorided that care must be ■taken to see that the person or persons of a member’s family are the ones to- be named as his beneficiaries. We áre of the opinion, therefore, that the widow of the de*119ceased member, lie baying died childless, is entitled to' the proceeds of the benefit certificate, to the exclusion of the father, who was not a member of his family, or in any wise dependent upon him for maintenance or support. The claim of the administrator of the deceased member to any portion of the proceeds of the benefit certificate is in direct conflict with section 7 of the charter, which expressly stipulates that, under no circumstances, shall the fund be liable to seizure or appropriation by any legal or equitable process for any debt or debts of any of its living or deceased members. For reasons indicated, the judgment is reversed on the appeal of Kate O’Neal, v. Benjamin O’Neal, but affirmed on the appeal of Henry O’Neal’s Adm’r. v. Kate O’Neal, and the cause is remanded for proceeding consistent with this opinion.