O'Brien v. Supreme Council

Hatch, J.: In organizations of this character it is well settled that the certificate and its conditions, the constitution and by-laws, furnish the contract [4] from which the rights of the parties are to be determined. (People ex rel. Attorney-General v. Life & Reserve Assn., 150 N. Y. 94; Bird v. Mutual Union Assn., 30 App. Div. 346.) Ordinarily, the sole right of the insured rests in the power to appoint a beneficiary, ánd if the person so appointed answers to that class of persons from which the beneficiary may be selected, and such beneficiary survive the insured, he or they become entitled to take. The present association, however, recognizes an interest of the insured in the policy to. the extent that, upon proof of permanent disability, he would become entitled to receive for his own benefit $2,000. Aside from this provision, he has only the power of appointment of a beneficiary, The interest of the latter is purely contingent. Whoever he may be of the class from which he may be selected, the interest is at all times subject to his survivorship of the insured, and also subject to the exercise of the insured’s right to change the beneficiary named. (Simon v. O'Brien, 87 Hun, 160.) The by-law. which is the subject of construction in this action is not repugnant to any provision of law governing the subject, either statutory or otherwise. The statute (Laws of 1881, chap. 256, § 1) provides that the certificate may provide for paying the amount secured thereby to its members or to others dependent upon such members, orto the beneficiary designated by the 'member. Three classes of persons are, therefore, entitled to take, but there is no provision in the statute that distribution of the funds secured to be paid shall be made among all of the members constituting a class. On the contrary, it rests with the insured to designate whom of the class he will make beneficiary. The by-law in question secures this right. Mary O’Brien, the first wife, therefore, took nothing as beneficiary in the certificate for two reasons. She did not survive the insured, and she held her position at all times as beneficiary, subject to the power of change by him. ; When he remarried he had authority to designate the wife of such marriage as beneficiary, and she occupied precisely the same relation with respect to the fund to be paid as did the first wife during her lifetime. She held such position upon precisely the same terms and conditions. As' she died prior to the insured, and as the latter thereafter made no designation of a beneficiary, as was within his power, the payment over of the fund by the association became governed exclusively by its by-laws then in force. The only limita5 tion upon the authority to adopt by-laws is that they shall be reasonable in character and within the power of the association to adopt. (Grossmayer v. Dist. No. 1, Benai Berith, 70 App. Div. 90.) The by-law which was in force at the time of the death of the first wife, where there has been an omission to designate a beneficiary after the one named had died, provided that the legal representative of the deceased member took the fund to be distributed among his heirs at law, according to the law of the State or Commonwealth in which he resided. The by-law which was in force at the time of the death of the insured changed this rule of payment by providing that the legal representative of the deceased beneficiary should be entitled to take, to be distributed to his or her heirs at law in like manner as in the former by-law. The last by-law related to the same subject-matter as the former. It is reasonable in its character, and was clearly within the authority of the association to adopt. No prior parties were in existence at the date of the death of the insured who had any vested interest in the fund, which for any reason would render the last by-law void as to them. Until the death of the insured, no persons had acquired any vested interest in this fund which could in any manner be enforced. The interests of the parties to share therein depended, therefore, upon the constitution and by-laws which were in existence at that time. By the provision of the by-law then in force, the legal representative of the deceased beneficiary became entitled to take the fund. Such representative, however, takes the fund solely for the purposes of distribution.Who the person may be that is ultimately entitled to take the fund it is not necessary that we now determine; All that is involved in the present submission relates to the representative entitled at this time to take by virtue of the by-laws. Such person is the legal representative of the deceased beneficiary, who takes for purpose of distribution. It follows that the defendant is entitled to judgment upon the submission. Van Bbunt, P. J., McLaughlin and Laughlin, JJ., concurred. Judgment ordered for the defendant.