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Holland, Guardian, v. Taylor et al.

ficiary named in the certificate. The executors, so far as shown by the terms of the certificate, had no right at all either in or to the certificate or to the amount to be paid by the association. So far as shown by that certificate, they were mere trustees to collect the amount for the use and benefit of the real beneficiary, Anna Laura. So long as the contract remained as executed, she had the right of a beneficiary, subject to be defeated by a change of beneficiary by the assured.

So long as the certificate remained as executed, the assured had reserved to himself the power to change the beneficiary, and that was the extent of his right in, or power over, the certificate, or the amount agreed to be paid at his death. He had no interest in or to either the certificate or the amount agreed to be paid, that would have gone at his death to his personal representatives. By virtue of the by-laws and the certificate, which, as we have seen, constituted the contract between him and the Royal Arcanum, he had power to change the beneficiary. That same contract fixed the mode and manner in which that change might be made; and we think that, taking the by-laws and certificate together, the mode and manner of changing the beneficiary was fixed as definitely, and was as binding upon the assured, as was the right to make such change binding upon the association and the beneficiary. In other words, under the contract, the assured had a right to change the beneficiary, provided he made the change in the manner provided in the contract. The agreement was that he might change the beneficiary by surrendering the certificate and taking another payable to such beneficiary dependent upon him " as he might direct.

In that contract Anna Laura, the beneficiary, had such an interest as that she had, and has, the right to insist that in order to cut her out, the change of beneficiary should be made in the manner provided in the contract.

The contract clearly contemplated that the change should be made and perfected by the assured during his lifetime.

Holland, Guardian, v. Taylor et al.

It was not contemplated that he might make such a change by will, of which neither the association nor the beneficiary named in the certificate would have notice before his death, and which would not take effect until after his death.

In many of the cases reported in the books, it appears that such associations had provided in their by-laws and certificates that changes of beneficiaries might be made by the will of the assured.

In the absence of such provisions, the decided weight of authority is, that such changes can not be made by will, and that, to be effectual and binding upon the beneficiary named in the certificate, they must be made in the mode and manner provided in the by-laws and certificate; in other words, that they must be made in the manner and mode provided in the contract.

From the by-laws and certificate before us, it is clearly apparent, also, that the undertaking on the part of the association was not to pay a sum of money for the benefit of the estate of the assured, but for the benefit of members of his family, and those dependent upon him.

Under the second by-law set out above, the member was required to enter upon his application the name or names of the members of his family, or those dependent upon him, to whom he desired his benefits paid, subject to such future disposal of the benefits among his dependents as he might thereafter direct.

By the third by-law the association agreed that, upon a surrender of the certificate by the member, it would issue another to him, payable to such beneficiary or beneficiaries dependent upon him as he might direct. Thus, under the by-laws, the assured might substitute a new beneficiary, provided such beneficiary was a member of his family or dependent upon him, and provided the change of beneficiary was made in the manner prescribed in the by-laws.

Taylor, the assured, did not make a change of beneficiary in the manner prescribed in the by-laws, nor did he name

Holland, Guardian, v. Taylor et al.

as new beneficiaries members of his family only, or those dependent upon him. He disregarded the provisions of the by-laws prescribing the manner of changing, and prescribing what class of persons might be named as beneficiaries, and attempted to make a change by his will. It is true, that he did not attempt to deprive the daughter of all rights as beneficiary, but, treating the certificate as though it belonged absolutely to him, undertook to dispose of the amount to be paid at his death by directing how it should be managed by the executors of his will, and directing that they should use the income from it as assets of his estate for the payment of his debts. And finally, without changing the beneficiary in the manner prescribed in the by-laws, he undertook to deal with the certificate and the amount to be paid upon it at his death as though the daughter had no right to either, except as might be bestowed by his will, and as though they both belonged to him to be disposed of by will as his property. And thus treating them, he undertook to dispose of the fund by giving it to others, neither members of his family nor dependent upon him, provided the daughter did not attain the age of twenty-one years. Without further elaboration upon this branch of the case, our conclusion is, that Anna Laura, having been named in the certificate as the beneficiary, and there having been no change of beneficiary in the manner prescribed in the by-laws of the association, she became the absolute owner of the insurance fund upon the death of her father, unaffected by the will. As fully sustaining our conclusion, we cite the following cases : Masonic Mutual Benefit Society v. Burkhart, 110 Ind. 189; Supreme Lodge, Knights of Pythias, etc., v. Schmidt, 98 Ind. 374; Stephenson v. Stephenson, 64 Iowa, 534; Hellenberg v. District No. 1, Independent Order of B'nai Brith, 94 N. Y. 580; Vollman's Appeal, 92 Pa. St. 50; Eastman v. Provident Mutual Relief Ass'n, 20 Cent. L. J. 266; Coleman v. Supreme Lodge, Knights of Honor, 18 Mo. App. 189 (14 Ins. L. J. 635); VOL. 111.-9

Holland, Guardian, v. Taylor et al.

Daniels v. Pratt, 143 Mass. 216; Supreme Lodge, Knights of Honor, v. Naim, 22 Cent. L. J. 274; Gould v. Emerson, 99 Mass. 154; Kentucky Masonic Mutual Life Ins. Co. v. Miller, 13 Bush, 489; Hogle v. Guardian Life Ins. Co., 1 Big. L. & A. Ins. Rep. 597; Worley v. Northwestern Masonic Aid Ass'n, 10 Fed. Rep. 227 (11 Ins. L. J. 141, 3 McCrary R. 53); McClure v. Johnson, 56 Iowa, 620; Maryland Mutual Benevolent Society v. Clendinen, 44 Md. 429 (22 Am. R. 52).

Appellee's counsel cite and rely upon the case of Splawn v. Chew, 60 Texas, 532. That case is not in harmony with what we hold here as to the want of power by the assured to change the beneficiary by a will; nor is it in harmony with the cases above cited. It was held in that case, that the by-law providing a mode for changing the beneficiary was directory only; that it was for the benefit of the association alone, and might be waived by it; that the association not objecting, the assured might change the beneficiaries by a will, and that the beneficiaries named in the certificate could not, after the death of the assured, be heard to say that there had been no change of beneficiaries in the manner provided in the bylaws.

As we have already said, in effect, in the case before us, our judgment is that the mode and manner of changing the beneficiary was as obligatory upon the contracting parties and all concerned as was the reservation of the power to the assured to make such change. The beneficiary, Anna Laura, did not have an indefeasible interest in the contract evidenced by the certificate, nor in the amount to be paid upon it upon the death of the assured, but she had an interest in them subject to be defeated by the change of beneficiary in the mode and manner provided by the by-laws which were a part of the contract. Supreme Lodge, Knights of Pythias, etc., v. Schmidt, supra.

Taylor, the assured, neither changed, nor attempted to change, the beneficiary in the mode and manner provided in

Holland, Guardian, v. Taylor et al.

the by-laws. He could not accomplish that end, nor affect the ultimate rights of the beneficiary by a will. Upon his death, therefore, Anna Laura became entitled to the amount. to be paid upon the certificate, as her absolute property; appellees' executors, having collected from the Royal Arcanum, hold the amount so collected in trust for her, but they have no right to control, manage, and dispose of the fund as directed by the will, because, as to that fund, the will is of no effect.

The fund belonging absolutely to her, her guardian is entitled to it, to control and manage it as the court may direct until she shall have arrived at the years of majority. The court below, therefore, erred in overruling the demurrer to appellee's answer.

In answer to counsel, it is sufficient to say that the fact that Taylor made his will upon the same day that he requested the certificate to be so made as that the amount should be paid to his executors for the benefit of his daughter, can make no difference. The will constituted no part of the contract between him and the Royal Arcanum. That order agreed in the certificate to pay the amount to "Samuel Taylor and Martin V. McGilliard (executors) for the benefit of Anna Laura Taylor (daughter)," but it in no way consented that the beneficiary should be changed, nor that the fund should in any way be turned away from her by the will of the assured; indeed, there is nothing to show that the agents and officers of the order had knowledge that anything of the sort had been attempted by the assured.

The judgment is reversed, at the costs of appellees, and the cause remanded, with instructions to the court below to sustain appellant's demurrer to the answer, and to proceed in accordance with this opinion.

Filed May 24, 1887.

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