Harding v. Littlehale

Knoweton, J. The St. of 1885, c. 183, made important changes in the law relative to life and casualty insurance on the assessment plan. Section 1 is as follows: Every contract whereby a benefit is to accrue to a party or parties named therein upon the death or physical disability of a person, which benefit is in any degree or manner conditioned upon the collection of an assessment upon persons holding similar contracts, shall be deemed a contract of insurance on the assessment plan, and the business involving the issuance of such contracts shall be carried on in this Commonwealth only by duly organized corporations, which shall be subject to the provisions and requirements of this act; but nothing herein contained shall be construed as applicable to organizations which conduct their business as fraternal societies, on the lodge system, or to organizations which do not employ paid agents in soliciting business, or limit their certificate holders to a particular order or fraternity, or to the employees of a particular town or city, designated firm, business house, or corporation; or to organizations which are unincorporated and limit the amount of every certificate issued to a maximum amount, not exceeding five hundred dollars on any one risk. If the benefit is to accrue through the death of the insured person, the contract shall be of life insurance; if through the accidental death only, or the physical disability from accident or sickness of the insured, it shall be of casualty insurance.” In the first part of the section is a broad and comprehensive definition of insurance on the assessment plan. The last part [104] of the section marks the distinction between life insurance and casualty insurance. In the middle of the section certain classes of organizations are excepted from the provisions of the act. Section 2 provides for the formation of corporations to carry on the business of life or casualty insurance on the assessment plan. Section 3 relates to existing corporations engaged in transacting that business, and authorizes the reincorporation of such corporations, with a proviso “ that nothing in this act contained shall be construed as requiring or making it obligatory upon any such corporation to reincorporate, and any such corporation may continue to exercise all rights, powers, and privileges conferred by this act or its articles of incorporation not inconsistent herewith, the same as if reincorporated hereunder.” This section gives existing corporations all the benefits of the statute without their taking formal action of any kind, or making any change further than may be necessary to comply with the requirements of the act as to their management and the transaction of their business. It includes all corporations coming within the definition contained in § 1. Under this statute there can be no doubt that a corporation may insure an applicant for his own benefit, and that in such a case the proceeds of the certificate after his death will go to his executor or administrator, for the benefit of his estate. The provisions of §§ 10 and 11, which forbid insurance for the benefit of persons who have no interest in the insured life, and exempt from attachment the money to be paid under the certificate, are not inconsistent with this construction. The limitations of the St. of 1874, c. 375, and of the St. of 1877, c. 204, § 1, (Pub. Sts. c. 115, § 8,) as interpreted in American Legion of Honor v. Perry, 140 Mass. 580, and in Daniels v. Pratt, 143 Mass. 216, are not applicable to a certificate issued under this statute. The next question in the case is whether the certificate before us was so issued. The corporation which issued it was organized in 1878, under the provisions of the St. of 1874, c. 375, and of the St. of 1877, c. 204. It never had any by-laws in relation to the contracts between it and its members. There is nothing to indicate that it belonged to either of the classes of organizations excepted in § 1 of the statute which we have been considering. On the contrary, there are indications in the certificate and in the [105] application which fairly show, in connection with the report, that it belonged to neither of these classes. The sixth of the rules and conditions contained in the certificate provides for the accumulation “ of the Emergency Fund required by the laws of this Commonwealth,” and shows that the corporation was acting under this statute, in compliance with the provisions of § 8. In other particulars the certificate is made to conform to the requirements of the chapter, and the contract must be deemed to have been made by a corporation doing business with the enlarged powers conferred by recent legislation. Construing the certificate under the statute of 1885, it remains to inquire whether it provides a fund for the heirs of the insured as individual beneficiaries, or for his estate, to be disposed of under the will. The statute permits parties to make a contract in either form. What was their intention as shown by their language? By the first clause of the conditions of the certificate, the application is expressly made a part of the contract. In the application, we find the only specific provision as to ownership in the question, “ For whose benefit is this contract made (give relationship of beneficiary and full name) ? ” and in the answer, “ Myself.” The only doubt as to the construction of the contract is created by the words of the certificate in the printed blank, where the agreement of the corporation is to pay “ to the executors or administrators of said member, in trust, however, for, and to be forthwith paid over to, his heirs at law.” The chief purpose of this language is to state the undertaking of the corporation, and that is fully accomplished before the words “in trust” are reached. The final clause is a statement of the existence of a trust which is supposed to have been created by the designation of the insured in his application. In the present case these words are in direct conflict with the statement of ownership in the written portion of the contract, and it seems likely that they were inadvertently left in the printed blank. In the absence of anything else to show an intention to make his heirs beneficiaries, we are of opinion that the words referring to a trust must yield to the language of the application, and that the proceeds of the certificate must be administered as a part of the estate of the insured under his will. Decree affirmed.