Court Opinion

ID: 7968596
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:53:00.586247+00
Date Added: 2024-06-11T16:34:42.848415
License: Public Domain

Mitchell, J.
The respondent association is a corporation of a class, now very common, by means of which persons of moderate means may, by payment of small stated assessments, make provision for their families in case of death. While possessing some of the features of ordinary life insurance, it is in fact a mutual aid society. Its expressed object is “aiding and assisting the widows and orphans of deceased members.”
Its by-la-ws provide that: “Every applicant for membership shall designate in his or her application the person or persons to whom, in the event of his or her death, the benefit shall be paid. Any mem*127ber in good standing may change his or her beneficiary or beneficiaries by sending a written application, duly acknowledged before a notary public, to the secretary, and by surrendering his or her certificate, and paying a fee of one dollar. In case such change is approved by the board of managers, the secretary shall issue a new certificate to such member, and no change of beneficiary shall be made in any other way than as herein provided.” “Benefits shall be payable at the city of Bed Wing, Minnesota, and shall be paid as follows:
(1) To such person or persons as the deceased may have designated to receive the same, as shall appear upon the books of the association.
(2) If such beneficiary or beneficiaries shall die prior to the death of such deceased member, or if no designation has been made, then the benefit shall be paid to the legal heirs or devisees of such deceased member.”
The facts found by the court, and amply supported by the evidence, are as follows: In March, 1882, the association accepted one Olaf Hanson as a member, and issued to him a certificate of membership. Neither in his application nor at the time of the issuance of the certificate did Hanson designate the beneficiary or beneficiaries to whom the benefit should be paid. Some time in 1883 or 1884, he appeared in person at the general office of the association, and verbally notified its secretary, one Werner (whom the association in its answer also designates and recognizes as its general manager), that he desired to designate his children Axel, Esther, Gertie, and Christine as the beneficiaries to whom the benefit should be paid, and requested Werner to make such designation. In pursuance of such request, Werner made an entry to that effect in the association's book or record of membership, in the column headed “Certificate in Favor of,” and then and there read the entry to Hanson, who then inquired “if there was anything more to do,” to which Werner replied, “That is all you need do; that is solid.” The validity of this designation was never questioned by either Hanson or the association. The foregoing is the only designation of beneficiaries which Hanson ever made. The certificate issued by the association to Hanson was merely one of membership, and in no way referred to the payment of the benefit, or to whom it was payable; and it does *128not appear that there was any by-law requiring such certificate to state the name of the beneficiary in case one is designated. Hanson continued to pay his assessments until 1890, when he died intestate, leaving surviving him, as his heirs or distributees, in addition to the four children named in the foregoing designation, a widow and one other daughter. A controversy having arisen between them as to who were entitled to the money under the certificate, the association, in its answer, merely alleged the facts, and expressed its readiness and willingness to pay the money to the persons entitled to it.
The point is made that even if the designation of beneficiaries was void, yet the widow has no interest in the money, because she is not a “legal heir” of her husband. In view of the expressed purpose of the association, we are of the opinion that the word “heir,” as used in the by-laws, is to be construed, not in its technical, common-law sense, but as including all those who succeed to personal property under the statute of distribution, including, of course, the widow. The main question, however, in the case, is whether there was a valid designation of the four children as beneficiaries; the contention of appellants being that it was void because not made in accordance with the requirements of the by-laws as to changing beneficiaries. Appellants’ counsel argue that this was not an original designation, but a change, of beneficiaries. We have no occasion to consider whether it would make any difference which of the two it was, but we are clearly of the opinion that, within the contemplation of the by-laws, it was the former.'
By the “designation” of a beneficiary, the by-laws evidently refer to the express act of the member specifying and naming some particular person, and. by “changing” beneficiaries they refer to the act of naming and specifying some other person or persons in place of those previously designated. According to this construction of the by-laws the act of Hanson was an original designation, and not a change, of beneficiaries, and hence the only departure from the strict requirement of the bydaws was Hanson’s designating the beneficiaries verbally after the certificate of membership was issued, instead of doing so in his written application for membership. The requirement of the by-laws in this regard was designed for the protection of the association, the object being that it might have on file authenticated *129written evidence as to who were the ’ designated beneficiaries, to whom the benefit should be paid in case of the death of the member. If is a formality which neither goes to the substance of the contract of membership nor affects the expressed object of the association. Therefore, the association might waive it, and, if it did so, those who might prove to be the heirs or legatees of the member at his death cannot be heard to object. The matter was one wholly between the association and the member. This logically follows from the fact that such possible heirs or legatees had no vested right whatever in the benefit during the life of the member. See Supreme Conclave v. Cappella, 41 Fed. 1. There is nothing inconsistent with this view in Hall v. Merrill, 47 Minn. 260, (49 N. W. 980.) Not only was that a case of an attempted change of beneficiary, but the association never had waived the requirement of the by-laws, and hence no change was in fact ever effected. Moreover, in that very case the power of the association to waive matters of form was expressly recognized. In the present case the association did waive a written designation in the application for membership, and accepted in place of it a verbal designation, .and made the appropriate entry of it in its records, — a thing which the by-laws clearly contemplate being done.
It is urged that it does not appear that the board of managers ever approved this designation. Viewing it as an original designation, and not a change, of beneficiaries, within the-meaning of the by-laws, we find nothing in them expressly requiring such approval. But, conceding that this is implied, the fact that such designation stood of record in the book of the association, kept for that express purpose, for so long a time without objection on part of the managers, amounted to an approval. They either knew of it or ought to have known of it, and hence must be presumed to have known of it; and by not objecting they approved. A formal vote was not necessary. See Durar v. Hudson Co. M. Ins. Co., 24 N. J. Law, 171; Phillips v. Merrimack M. F. Ins. Co., 10 Cush. 350; Topping v. Bickford, 4 Allen, 120.
Order affirmed.
Gilfillan, C. J., absent on account of sickness; took no part.
(Opinion published 60 N. W. 1091.)