Sykes v. Armstrong

Sykes, J.-, delivered the opinion of the court. This is an appeal from the decrees of the chancery ■court of Monroe county overruling exceptions of appellant to final accounts of the administrator, first, of the estate of Alice Sykes, deceased, and, second, of the estate of W. M. Sykes, deceased. W. M. (or' Bill) Sykes at the time of his death held a policy of insurance in the Odd Fellows’ Benefit Association of the District of Mississippi, payable to “Mrs. Alice Sykes, the wife of Bill Sykes, of Lodge 1028 at his death (if financial in the 0. F. B. A.),” etc. The beneficiary, Alice Sykes, predeceased W. M. Sykes, leaving surviving her three children as the fruits of this marriage. W. M. Sykes at the time of his death was married to Clara Sykes, and left surviving him his wife, Clara, and his three children by his first wife, Alice Sykes. After W. M. (or Bill) Sykes’ death, letters of administration were taken out by J. D. Armstrong as administrator, first, of the estate of Alice Sy]kes, and, second, of the estate of W. M. (or Bill) Sykes. The insurance order paid the amount due under the policy to the said Armstrong as administrator of the ■estate of Alice Sykes. This controversy arises over the question of who is entitled to the proceeds of this insurance policy. The appellant, Clara. E. Sykes, claims that she is entitled to the entire amount, basing her claim on section 2 of the constitution and by-laws of the order, which reads as follows: “Purpose. Sec. 2. To provide a fund to be paid to the widow, orphan or legal .representatives of deceased Odd Fellows and inmates of the household of Ruth within ihe jurisdiction of the District Lodge and Household under said jurisdiction. ’ ’ [52] Appellant claims that by virtue of the above section of the constitution it is provided that in case there is a lapse of the named beneficiary or, if there be no beneficiary designated, the proceeds of the policy go to one of those designated in section 2, that these beneficiaries are named disjunctively in said section, and that the meaning of same is that the proceeds should go, first, to the widow, or, in case there be no widow, then to the orphan, or, if there be no orphan, then to the legal representatives. The administrator of the estate of Alice Sykes claimed this amount as belonging to said estate, or, if mistaken in that, then he claimed that he was entitled to administer thé same as administrator of the estate of William Sykes. The learned chancellor in the court below held that it was no part of the estate of Alice Sykes, and ordered Armstrong, administrator of Alice Sykes’ estate, to turn the same over to Armstrong, administrator of the estate of W. M. Sykes. In this he was correct. It is well settled in this state, as well as in a majority of states, that the beneficiary in a mutual benefit policy like this one has no vested interest in same during the life of the insured. In the case of Carson v. Bank, 75 Miss. 167, 22 So. 1, 37 L. R. A. 559, 65 Am. St. Rep, 596, this court says: “It is settled that the right of a beneficiary of a benevolent society, like this of the Knights of Pythias, is inchoate, imperfect, and ambulatory until the death of the member holding the endowment certificate.” Rollins v. McHatton, 16 Colo. 203, 27 Pac. 254, 25 Am. St. Rep. 260. In the case of the Masonic Mutual Relief Association v. Mary McAuley et al., 2 Mackey (D. C.) 79, in passing upon this proposition, the court said: “We think, therefore, the meaning of the language used by the husband in designating the beneficiary was that the benefits of this provision were to go to his wife only in case she survived him; and, as she did not survive her husband, the provision falls to the ground so far [53] as she is concerned, and the claims of her representatives are ont of the question.” The learned chancellor, however, ordered the costs of the administration of the estate of Alice Sykes to be paid out of this insurance fund. In this respect alone he committed error. The principal contention in the case is that of appellant that she is entitled to the entire amount of this fund, and that it should not be equally divided among her and the children of W. M. (or Bill) Sykes, as was done under the decree of the court below. There are some cases holding according to this contention of appellant. It is our opinion, however, that this policy is too vague and uncertain to be construed in this way. This is a negro mutual benefit insurance society. As was stated by this court in the case of Shelton v. Minnis, 65 So. 115: “It seems to us that in determining who is entitled to receive the benefits of mutual benefit associations, wherein-the money contributed by its members provides the fund from which the benefits are paid, we should give a liberal construction to the by-laws of the association so as to effect the purposes of the parties to the contract.” Again, in the case of Grand Lodge, etc., v. Harris, in 68 So. 76, in delivering the opinion of the court, Judge Cook aptly said: “In all of these cases the courts enforced the laws of the order as the law of the case, and held that the legal beneficiary was entitled to the fund.” Applying these liberal rules of construction, it is our opinion that the constitution and by-laws of this order simply mean that when the beneficiary named under the policy is dead, or, when there is no named beneficiary in the policy, then the proceeds of the same go to the widow, orphan, or legal representative; that the named beneficiaries take under the policy the amount they would inherit from the decedent in case of his intestacy, as if-it was a part of his estate. We approve of the reasoning and decision in the case of Bishop, Administratrix, v. [54] Grand Lodge of the Empire Order of Mutual Aid of the State of New York, 112 N. Y. 627, 20 N. E. 562, which is a case very much like the case at bar, and in which the same contention was made as is made here by the appellant. The opinion of the court was delivered by Justice Peckham. On page 634 of 112 N. Y., on page 565 of 20 N. E., the court in part says: “It is true the act and the constitution fail to state which it shall be in case no direction is given, whether it shall he the family, the heirs, or legal representatives'; but we think this expression should be construed with reference to the general purpose of the corporation, and, having such purpose in view, we think it was really meant, and that it should be held to include these who would take such property as in cases of intestacy.” Again on page 636 of 112 N. Y., on page 566 of 20 N. E., the opinion says: ‘ ‘ In deciding here that, in the absence of the certificate, the beneficiary fund would go to those who by the general laws of the state would take the money, we do not mean that the money would go as a part of the estate of the deceased, subject to the payment of his debts; but it would be a special fund, subject to the exemption provided for in the act of incorporation, and not to be liable for the payment of the debts of the decedent or to be taken on any process for ■ the payment of such debts. We also think the plaintiff had sufficient interest in the fund to sustain this action in her capacity as administratrix. ” Under this authority it is our opinion that the administrator of the estate of Bill Sykes had a right to distribute this fund as a trust fund for the benefit of the wife and children. That the same did not form any part of the estate of the deceased, Bill Sykes. The fund, however, is subject to the costs of the administration of the estate of William Sykes as was adjudged by the chancellor. In conclusion we therefore say that we cannot' agree with the learned counsel for the appellant in their posi [55] tion that the living wife is entitled to the entire proceeds of this policy. The laws and. constitution are not sufficiently plain for this construction. This being true, we adopt the liberal rule that those named in the constitution and by-laws as being parties for whom this fund is provided, where the beneficiary has lapsed, as in this case and where no other beneficiary has been designated, are by ■ the terms of the constitution and by-laws entitled to share in the proceeds of same to the same extent that they would share in the estate of' the decedent. , "We further hold that in no case where there are any of the class living who are designated as probable beneficiaries in the policy does the insurance entirely lapse or that it is uncollectible. The decree of the lower court is affirmed except as to the payment of the costs of the Alice Sykes ’ estate, which part of the decree is reversed. Affirmed m part cmd reversed in part.