Trust Co. v. . Widows' Fund of Oasis Temples

Bbogden, J. The legal problems presented are: 1. Does Contract No. 11689, issued by the Widows’ Fund, fall within the provision of C. S., 6508? 2. Was the substitution of the Equitable Trust Company, trustee, for Anna Lea Lansburgh, wife, a valid change of beneficiary? C. S., sec. 6491, et seq., constitutes the statutory law with reference to fraternal orders and societies, (a) “Fraternal Benefit Society” is defined by C. S., 6497. C. S., 6508, specifies the beneficiary in fraternal certificates or policies issued to members of the order. It is noteworthy that such beneficiary shall be natural persons, who are kin'to the insured by blood, marriage, or adoption, or dependent “upon the member.” Certain charitable institutions may be a beneficiary, but the Equitable Trust Company, trustee, is not within such statutory designation. The statute provides that “within the above instructions each member shall have the right to designate his beneficiary, and, from time to time, have the same changed in accordance with the laws, rules, and regulations of society,” etc. The Equitable Trust Company, trustee, insists, however, that the statute applies to membership benefits, and that as Contract No. 11689 *537 is a policy of insurance, it is thereby excluded from the operation of C. S., 6508. Contract No. 11689 is in the form of an insurance policy. It requires tbe payment of a monthly premium and contains certain provisions relating to forfeitures, loans, assignments, legal reserve, etc. However, paragraph 12 of the contract is as follows: “The insured agrees that the Widows’ Fund of Oasis and Omar Temples is a Frá-ternal Benefit Society without capital stock, organized and carried on solely for the mutual benefit of its insured members and their beneficiaries and not for profit, and having a lodge system and representative form of government; that the by-laws of the association, the application for membership therein, the medical examination, if any, signed by the applicant, and this policy, constitute the entire agreement between the parties hereto,” etc. This declaration in the contract classifies it squarely within the definition of Fraternal Benefit Society contained in C. S., 6491. Manifestly, therefore, the contract must be interpreted and construed as a Fraternal Benefit Contract, and, if so, C. S., 6508, is applicable. In answering the second problem of law, it must, therefore, be assumed that C. S., 6508, governs the interpretation of contract. The Equitable Trust Company, trustee, is not a relative by blood or marriage to the insured, nor is it a dependent. While the trust company, under the trust agreement with the insured, is in general terms required to use the fund for the use and benefit of the children of the sisters of the insured, nevertheless the trust agreement authorizes and empowers the trustee in the exercise of its discretion to advance money to the executor or administrator of the insured “with which to pay taxes, claims, or other indebtedness of the estate of the insured.” Furthermore, the by-laws of Widows’ Fund were offered in evidence and article 10 thereof declares “in case the certificate of membership shall be lost or destroyed, and a member desires to procure a new certificate of membership, or desires to change the beneficiary designated therein, he shall have the designated beneficiary, if living, join in the application for a new certificate,” etc. Paragraph 12 of Contract 11689 specifies that the by-laws as well as the policy shall be a part of the agreement between the parties. There is no evidence that the wife, Anna Lea Lansburgh, the beneficiary in the original membership certificate which was lost, consented to the elimination of her name as beneficiary in Contract No. 11689 and the substitution of Equitable Trust Company, trustee. Therefore, the court concludes upon the entire record that as C. S., 6508, is applicable, the change of beneficiary was invalid. It necessarily follows that the wife, Anna Lea Lansburgh, is entitled to the proceeds of the contract, and that the ruling of the trial judge was correct. Affirmed.