Court Opinion

ID: 9310166
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:38:24.360665+00
Date Added: 2024-06-11T17:14:06.626728
License: Public Domain

Carl Halle, Manuel Halle, Moses Halle, Bertha' Goldsmith, Regina Rheinhand, Caroline Shall and Minnie Goldsmith, alleging that they are the sole heirs at law of Aaron Halle, deceased, brought their action in t'he court below against District Grand Lodge No. 2, I. O. B. B., to recover certain benefits which thev claimed to be due from said lodge, alleging that the lodge is a corporation organized under the laws of the state of Ohio for the purpose of mutual protection and relief of it's members and for the payment of stipulated sums 'of money to the families or heirs of deceased members of such association, and that it has certain powers, etc.
The language of the allegations regarding the objects of the order is taken from the act of April 20, 1872 (69 O. L., 82). Although this act has been amended since 1872, we have taken it that that act controls in this case, as there is no allegation or proof that subsequent amendments of the law have been taken advantage of by the association.
The petition states that Aaron Halle became a member of the defendant association in 1874 and remained such until his death in *841897; that in 1874 he became a participating member of its covenant and endowment fund, paid all dues and assessments, and died on April S3, 1897, at Cleveland, in good standing, never having designated who should be his beneficiary, and leaving no widow, nor children, nor grandchildren. Due notice of his death was given and proof thereof was made according to the printed rules and regulations of the order.
Section 11 of the by-laws of the order provides in substance that each member shall make a designation as to whom his endowment money shall be paid at his decease.
Section 12 of the by-laws provides who may be thus designated, to-wit: “A member or members of his family, blood relatives, or a dependent or dependents of such participating member, or charitable or benevolent institutions or associations, including a lodge of this order for some specific benevolent purposes.”
Section 13 of the by-laws construes the designation “wife and children” or “family,” and provides who shall receive the benefits upon the prior decease of a designated beneficiary and directs upon the prior death of all designated beneficiaries the money shall'pass to the emergency fund under Section 18 of the by-laws and be controlled by the provisions of such section, and, if not distributed thereunder, shall lapse and become a part of the reserve fund.
Section 14 of the by-laws provides that in case the member fails to make any designation as 'to whom his endowment shall be paid, the endowment shall be paid to his wife and, in case there be no wife, then to his children, then to his grandchildren, 'and in case there be no wife, children nor grandchildren, no endowment shall be paid, subject, however, to the provisions of Section 15 of the by-laws.
Section 15 provides that any member who may be a member of a home for aged or infirm or of any similar charitable institution may designate such home or institution as a beneficiary, shall not be entitled to make any change, etc.
Section 18 provides that in any case where there may be no one entitled to demand payment as beneficiary on the death of any member, the trustees of the endowment fund may pay over the endowment on such death, or such part thereof as they may deem *85advisable, into a fund which shall be known as the emergency fund and the trustees are empowered to pay from that fund to such members of the family, or blood relatives of the deceased member so dying without valid designation, or such charitable institution which may have assisted him, as the trustees may deem worthy of relief, and any portion of said fund not so applied by the trustees shall lapse and pass into and become part of the reserve fund.
A reserve fund is provided for in Section 9, from which endowments shall be paid whenever they exceed the current receipt's.
A general demurrer to the petition was sustained by the common pleas court.
Attention is called to the fact that the plaintiffs’ claim to be the sole heirs at law of the decedent member, but they do not claim to be the wife, children or grandchildren, or any of the heirs at law designated in the by-l'aws as entitled to be beneficiaries under the designation of members.
It is contended by plaintiffs that Aaron Halle having died without designating any beneficiary, they are entitled to his endowment because the law under which the order is organized provides that it may pay “stipulated sums of money to the families or heirs of deceased members,” and that they are the heirs of Aaron Halle within the purview of said statute, and he had no family. They claim that the law and the by-laws of the order make a contract in their favor and that the by-laws of the order can not be in conflict Avith the law, anid if they are, the statute prevails. They claim that in so far as the by-laws limit the payment of benefits, upon failure of designation, to certain heirs, excluding nephews and nieces, for instance, such as they are, the by-laws are invalid.
It is well settled in this state that the scope of the by-laAAjs can not be greater than that' of the law. State, ex rel, v. People’s Mutual Benefit Assn., 42 O. S., 579.
The authorities cited by counsel for plaintiff hardly bear out their contention that the association can not decline to take the benefit of the whole law, and can not limit the classes who may be designated by the members as beneficiaries or Avho may receive benefits where no valid designation is made. They are rather in line Avith the case above referred to, for instance:
*86In the ease of The Supreme Council American Legion of Honor v. Perry, 140 Mass., 580, under a statute authorizing the creation of corporations, for the purpose of assisting the widows, orphans, or other relatives of deceased members or persons dependent upon deceased members, it was provided in the by-laws that in the event of no designation the benefit was to go to the dependent heirs of the deceased member, and it was held that a member could not direct by will that a person not' within the class contemplated by the statute should receive the benefit of a certificate issued to him. even if the terms of the certificate permit such disposition to be made. In this case the benefit fund was bequeathed by the member to a person to whom he was engaged to be married, but to whose support he had contributed nothing and who was not dependent upon him.
In the case of Britton v. The Supreme Council of the Royal Arcanum, 46 N. J. Eq., 102, the same law of Massachusetts was under consideration and the court held that a member could not designate a creditor in no wise related to or dependent upon him as his beneficiary, and having done so, there was such failure to designate that the fund would go to the “legal heirs” mentioned in the by-laws who were construed to be the next of kin of the member.
In the case of Alexander v. Parker, 144 Ill., 355, the statute regulating the organization of such corporations “for the purpose of assisting the widows, orphans, or other persons dependent upon deceased members,” and the by-laws providing for the payment of benefits to a member’s wife, children, etc'., and lastly, to any other person dependent upon him, it was held that.a member could not designate as his beneficiary his affianced wife who was not dependent upon him.
To .the same effect is the case of Baldwin v. Begley, 185 Ill., 180, where the claimant was a niece of the deceased member’s wife and the by-l'aws provided for the payment of benefits only to the families, heirs, blood relatives, affianced wife of, or persons dependent upon the member.
We are satisfied that while members of mutual benefit associations can not designate as beneficiaries persons outside the classes specified in the statutes regulating such associations, and while *87such associations can not provide for the payment of benefits to persons outside the.classes mentioned in the statutes, such associations may limit the payment of benefits within the classes designated by law. If the law provides that benefits may be paid to heirs, generally, the by-l'aw may specify what heirs and limit and restrict the beneficiaries to certain heirs.
Defendant claims not only that plaintiffs are not the wife, children or grandchildren of the deceased member, within the meaning •of the by-laws, and so not entitled to any benefits, but that there being no wife, children or grandchildren, all benefits have lapsed and it is indebted to no one by reason of the endowment membership of Aaron Halle. Plaintiff claims that the by-laws providing for the lapsing of benefits are invalid, being contrary to the .spirit of the statute and in an indirect manner provide for the payment of benefits t'o institutions beyond the purview of the statutes. We do not see how plaintiffs’ claims t'o the fund are better established by showing that some other payment provided for under the by-laws is unlawful.
If plaintiffs have no right to the fund that settles this case, whether the association may afterwards make unlawful use of the money or not. Order of Mutual Companions v. Griest, 76 Cal., 494. By-law 14 provides that if there is no wife, and no children or grandchildren, no endowment shall be paid, subject to the provisions of Section 15 authorizing the member to designate a charitable institution as his beneficiary. Section 18 directs that in any case where there may be no one entitled to demand payment as beneficiary the money may be paid into the emergency fund, from which payments may be made to needy members of the •deceased member’s family, blood relatives, or a charitable institution, if the trustees deem them worthy, and any portion not so paid by the trustees shall lapse and go into the reserve fund, from which other endowments are paid when the receipts are inadequate for their payment.
The authorities seem to hold that where the by-laws of a mutual benefit association require the member to designate a beneficiary, and upon his failure to do so, provide that the benefits shall be paid to certain heirs in an order named, upon failure of the member to designate a beneficiary and there being no such heirs as are *88specified in the by-laws, the order has the right to designate what shall be done with the endowment. Arthur v. Odd Fellows Beneficial Association, 29 O. S., 560; Hellenberg v. District No. 1, I. O. B. B., 94 N. Y., 580; Maryland Mut. Ben. Society v. Clendinen, 44 Md., 429; Order of Mutual Companions v. Griest, 76 Cal., 494; Eastman v. Provident Mutual Relief Ass’n, 62 N. H., 555; Loewenthal v. District Grand Lodge No. 2, I. O. B. B., 19 Ind. App., 377.
.8. A. Grossner and H. Preusser, for plaintiffs in error.
Horr & Loewenthal, for defendant in error.
Following these authorities we find that the demurrer was properly sustained and there is no error.
Judgment affirmed.