Cook v. Supreme Conclave Improved Order Heptasophs

Hammond, J. This is an action upon a death benefit certificate issued by the defendant, a fraternal beneficiary corporation, to one Ephraim Provo, a member of the order, in which certificote the only beneficiary named was his wife. She died before him, and he did not designate any other beneficiary. The defendant filed a demurrer which was sustained in the Superior Court, and the case is before us upon a report: “ such order to be made as justice requires.” The law in force at the time the certificate was issued, so far as respected the death fund, was St. 1888, c. 429, §§ 8, 9. It is [87] alleged in the declaration that at the time of Provo’s death he had no heir at law or next of kin, or person dependent upon him; and further, that “ the constitution and laws of the defendant contain no provision as to whom the amount of the benefit certificate shall be paid under the conditions herein alleged, nor for the reversion of the same to the defendant.” And there is no allegation that there is in existence any person or corporation coming within the class of parties named as possible legal beneficiaries under the statute to whom the plaintiffs would be accountable as trustees. We have then a case where the beneficiary named in the certificate has died before the member, who has failed to name any other beneficiary, and where there is no express provision in the laws of the society as to what shall be done with the trust fund. The case therefore is plainly distinguishable from cases like ' Daniels v. Pratt, 143 Mass. 216, where the bylaws make provision for the, absence or invalidity of a special designation. The plaintiffs rest their case upon the doctrine of a resulting trust. It is thus stated in their brief: “ Provo was admitted as a contributor to this fund and continued as such for many years and up to the time of his death. The certificate was legally issued. The defendant has not made any provision in its laws for a reversion of the benefit fund to the society. These considerations make a strong equitable basis for the plaintiffs’ claim. The plaintiffs believe that the decisions of this court have clearly established, as a principle of law, the doctrine of a resulting trust in favor of the insured’s estate where there is a failure of the beneficiary.” It becomes necessary to examine into the nature of this so called trust fund. The purpose for which the death fund in societies like the defendant is raised, and the persons among whom it may be finally distributed, are described in the statutes. While a member can receive sick benefits during his life and therefore may be said to be a cestui que trust of the funds raised for that purpose, he never can be a beneficiary under a death benefit. He may designate to whom the part named in his certificate may be paid, but even then he must keep within the classes of beneficiaries named in the statute; and a designation outside of these classes is invalid. American Legion of [88] Honor v. Perry, 140 Mass. 580. Daniels v. Pratt, 143 Mass. 216. In the last case the designation was the estate of the member. It was declared invalid, the court saying, “ If it were a part of his estate, it would be assets for the payment of debts and expenses of administration, and would be subject to an unrestricted disposition by will. But this is inconsistent with the statutes, and so beyond the power of the parties.” It thus appears that this fund is not created for the member, and that the only power he has over it is a limited power of appointment. If by reason of a valid appointment expressly made by him, or if in case of his failure to make such an appointment there be a provision either in the certificate or in the laws of the association making a valid appointment (which may be regarded as indirectly made by him), then the fund goes to the appointee. But to say that when there is a failure to make a valid appointment the fund shall go to the member as a resulting trust is to announce a result totally inconsistent for the purpose for which the fund was created. There can be no resulting trust which is inconsistent with the trust created by statute. The case bears no analogy to a life insurance policy in a regular life insurance company, where the company is operated upon a reserve basis and the policy always has a pecuniary or cash surrender value, and where there is no statutory limitation as to the beneficiaries of the fund. It follows that the demurrer was rightly sustained. Among the authorities bearing upon the general subject see in addition to those cited above, Bancroft v. Russell, 157 Mass. 47; Haskins v. Kendall, 158 Mass. 224 (arising under St. 1885, c. 183), Boyden v. Massachusetts Masonic Life Association, 167 Mass. 242 (arising under St. 1890, c. 421); Marsh v. American Legion of Honor, 149 Mass. 512, and cases there cited; Hill v. American Legion of Honor, 178 Mass. 145 ; Warner v. Modern Woodmen of America, 67 Neb. 233; Eastman v. Provident Mutual Belief Association, 62 N. H. 555; also cases cited in 29 Cyc. 159, note 3. Demurrer sustained.