Holland, Guardian, v. Taylor et al.

both of which are filed in the Supreme Secretary's office, be made a part of the contract; and upon condition that the said member complies in the future with the laws, rules and regulations now governing said council and fund, or that may hereafter be enacted by the Supreme Council to govern said council and fund. The conditions being complied with, the Supreme Council of the Royal Arcanum hereby promises and binds itself to pay, out of its widows and orphans' benefit fund, to Samuel Taylor and Martin V. McGilliard (executors), for the benefit of Anna Laura Taylor (daughter), a sum not exceeding three thousand dollars, in accordance with and under the provisions of the laws governing the said fund, upon satisfactory evidence of the death of said member, and upon the surrender of this certificate: Provided, that the said member is in good standing in this order at the time of his death; and provided, also, that this certificate shall not have been surrendered by said member and another certificate issued at his request, in accordance with the laws of this order.

"In witness whereof, the Supreme Council of the Royal Arcanum has hereunto affixed its seal, and caused this certificate to be signed by its Supreme Regent, and attested and recorded by its Supreme Secretary, at Boston, Massachusetts, this 25th day of August, 1884.

"JOHN HASKELL BUTLER, Supreme Regent. "Attest: W. O. ROBSON, Supreme Secretary." On the back of the certificate is this form:

"Form of change of beneficiary. Council, No. —, R. A. To, 18. Supreme Secretary S. C. R. A., I hereby surrender and return to the Supreme Council of the Royal Arcanum the written benefit certificate No. and direct that a new one be issued to me, payable to.

"[Seal of sub-council.]

"Attest:

[Member's signature.] Secretary."

The Royal Arcanum is governed by a constitution and by

Holland, Guardian, v. Taylor et al.

laws, sections two and three of the by-laws being as follows:

"Section 2. Each member shall enter upon his application the name or names of the members of his family, or those dependent upon him, to whom he desires his benefits paid, subject to such future disposal of the benefit among his dependents as the member may thereafter direct, and the same shall be entered in the benefit certificate according to said directions," etc.

"Section 3. A member may, at any time, when in good standing, surrender his benefit certificate, and a new certificate shall thereafter be issued, payable to such beneficiary or beneficiaries dependent upon him as such member may direct, upon the payment of a certificate fee of fifty cents."

On the 22d day of August, 1884, the day on which, as alleged in appellees' answer, Taylor applied for the above certificate, he made his will. In that will he recited as a fact, that he had in his possession a policy of life insurance for three thousand dollars, issued to him by the Royal Arcanum, and payable to Samuel Taylor and Martin V. McGilliard, his executors, for the benefit of his daughter, Anna Laura Taylor.

In another item of the will the testator directed that, in the event of his personal property being insufficient to pay his debts, the first interest or earnings of the life insurance fund should be applied to that object, the principal to remain intact.

In another item he directed that after his death the insurance fund should be collected by his "said administrators," and safely invested in real estate loans, and that the interest derived therefrom should be first used in the payment of his debts, and the remainder in the education of his daughter, Anna Laura, according to the best judgment of his "administrators;" that in the event of his daughter being left motherless, the fund should be used for her benefit in accordance with the judgment of his "administrators;" and that when

Holland, Guardian, v. Taylor et al.

she should arrive at the age of twenty-one years, the fund, with accumulated interest, should be paid to her.

By another item of the will, and a codicil thereafter made, the testator directed that in the event of the death of his daughter before arriving at the age of twenty-one years, the insurance fund should be given and divided by his administrators, a certain portion to his wife, another portion to his father, another portion to a person neither related to, nor dependent upon, him; and still another portion to the American Baptist Home Mission Society.

In another item appellees, Samuel Taylor and Martin V. McGilliard, were designated as the executors of the will. The assured and testator, Charles D. Taylor, died in February, 1885.

Subsequently, appellees were appointed and duly qualified as executors of the will, and collected the insurance fund from the Royal Arcanum. Subsequent to the death of the testator, also, appellant was appointed guardian of the person and estate of the daughter, Anna Laura.

In May, 1885, he filed his petition in the Marion Circuit Court, asking therein for an order upon the executors to pay over to him, as such guardian, the fund so collected by them from the Royal Arcanum.

That petition, and the answer thereto by the executors, state the facts substantially as above recited.

The court overruled a demurrer to the answer, and held that the executors were entitled to the fund, to be disposed of as the will directs.

The question for decision is, shall the benefit fund remain in the hands of the executors to be managed, disposed of, and distributed as the will directs, or ought it to be turned over to the guardian as the absolute property of the daughter, Anna Laura Taylor?

Upon a fair construction of the certificate, the by-laws of the order are a part of the contract. Therefore, by accepting the certificate, the member (Taylor) obligated himself to

Holland, Guardian, v. Taylor et al.

comply with the by-laws, and agreed that payment should be made to the executors for the benefit of his daughter, unless the certificate should be surrendered by him, and another issued at his request, in accordance with the laws of the order.

He, and all concerned, would have been bound by the bylaws, even though there had not been such a reference to them in the certificate. Benevolent associations, such as the Royal Arcanum appears to be, are in the nature of mutual insurance companies. Persons who become members of such associations, and accept certificates, are bound to take notice of the by-laws; they enter into and become a part of the contract the same as if they were written out in the certificate. Bauer v. Samson Lodge, Knights of Pythias, 102 Ind. 262.

Whatever rights beneficiaries have in life policies, they have by virtue of the contract between the insurance company and the assured. In the case of an ordinary insurance policy, the rights of the beneficiaries in the policy, and to the amount to be paid upon the death of the assured, are vested rights, vesting upon the taking effect of the policy. These rights can not be defeated by the separate, or the combined, acts of the assured and insurance company without the consent of the beneficiary. Harley v. Heist, 86 Ind. 196 (44 Am. R. 285), and authorities there cited; Damron v. Penn Mutual Life Ins. Co., 99 Ind. 478, and cases there cited.

As in other cases, so here, whatever right or power Taylor, the assured, had to and over the certificate, was by virtue of the terms of the certificate and the by-laws of the order, which together constituted the contract between him and the order. And whatever rights the beneficiary, Anna Laura, had, or now has, to the fund to be, and in this case paid, upon the death of the assured, her father, she had, and has, by virtue of the same contract.

It should be observed that the Royal Arcanum is not a

Holland, Guardian, v. Taylor et al.

domestic corporation, and hence not affected by section 3848, R. S. 1881. Presbyterian Mutual Assurance Fund v. Allen, 106 Ind. 593. If, then, the Royal Arcanum were to be treated as an ordinary life insurance company, and the certificate as an ordinary life policy, it would be clear that Taylor, the assured, had no authority, by will or otherwise, to change the beneficiary, or to in any way affect her rights without her consent.

For many, and, indeed, for most purposes, mutual benefit associations are insurance companies, and the certificates issued by them are policies of life insurance, governed by the rules of law applicable to such policies. There are, however, some essential differences usually existing between the contracts evidenced by such certificates and the ordinary contract of life insurance. Presbyterian Mutual Assurance Fund v. Allen, supra; Elkhart Mutual Aid, etc., Ass'n v. Houghton, 103 Ind. 286 (53 Am. R. 514); Bauer v. Samson Lodge, Knights of Pythias, supra.

The most usual difference is the power, on the part of the assured in mutual benefit associations, to change the beneficiary. But as in either case the rights of the beneficiary are dependent upon and fixed by the contract between the assured and the company or association, there seems to be no reason why the assured should have any greater power to change the beneficiary in one case than in the other, except as that power may be inherent in the nature of the association, or is reserved to him by the constitution, or by the laws of the association, or by the terms of the certificate.

In the case before us, the right and power of the assured, Taylor, to change the beneficiary was reserved to him by the by-laws of the order, and recognized in the certificate. Because of that reservation, the beneficiary, Anna Laura, did not have a right in and to the certificate, and the amount to be paid upon the death of the assured vested in such a sense that it could not be defeated. But it would be saying too much to say that she had no rights. She was the bene