named as a volunteer beneficiary in a certificate issued by such association, dies without leaving child or children, and without debts, prior to the death of the member, neither the administrator of the deceased member nor the administrator of the deceased beneficiary is a proper party to bring suit against the association for the benefit named in the certificate. [See note on this question beginning on page 762.] effect of rule of insurer. 2. In the question propounded by the court of appeals it does not appear that there is any provision made in the constitution, by-laws, or certificate issued by the mutual benefit association, providing for the payment of the benefit named in the cer tificate, upon failure of a beneficiary qualified to take. Where such provision is made in the constitution, bylaws, or certificate, or by the statutes of the state, the rule might be different. [See 19 R. C. L. 1314; 3 R. C. L Supp. 1012.] CERTIFICATION by the Court of Appeals for the opinion of the Supreme Court of a question arising upon writ of error by defendant to review a judgment in favor of plaintiffs in an action brought to recover the proceeds of a life insurance policy. Question answered. The facts are stated in the opinion Messrs. Branch & Howard, for defendant: The administrator of the deceased beneficiary, under the facts as stated by the court of appeals, has no right of action. Dell v. Varnedoe, 148 Ga. 91, 95 S. E. 977; Smith v. Locomotive Engineers Mut. L. & Acci. Ins. Asso. 138 Ga. 717, 76 S. E. 44. The administrator of the member has no right of action. Perry v. Tweedy, 128 Ga. 402, 119 Am. St. Rep. 393, 57 S. E. 782, 11 Ann. Cas. 46; Union Fraternal League v. Walton, 112 Ga. 315, 37 S. E. 389; Fraternal Life & Acci. Asso. v. Evans, 140 Ga. 284, 78 S. E. 915; Bacon, Life & Acci. Ins. 4th ed. 313; Warner v. Modern Woodmen, 67 Neb. 233, 61 L.R.A. 603, 108 Am. St. Rep. 634, 93 N. W. 397, 2 Ann. Cas. 660; 29 Cyc. 159, 162; 19 R. C. L. 1314; Union Fraternal League v. Walton, 109 Ga. 1, 46 L.R.A. 424, 77 Am. St. Rep. 350, 34 S. E. 317; District Grand Lodge v. Morris, 26 Ga. App. 371, 106 S. E. 188; District Grand Lodge v. Gardner, 27 Ga. App. 145, 107 S. E. 774. Messrs. Bond Almand and Willingham, Wright, & Covington also for defendant. Messrs. Harris & Harris, for plain tiffs: Plaintiff administratrix was entitled to collect the insurance. Smith v. Head, 75 Ga. 755; Steele v. Gatlin. 115 Ga. 931, 59 L.R.A. 129, 42 S. E. 253; Thomas v. Cochrane, 89 of the court. Md. 390, 46 L.R.A. 160, 43 Atl. 792; Hill, J., delivered the opinion of the court: The court of appeals requested instructions from the supreme court upon the following question: "Where the wife of a member of a mutual benefit association, who is named as a volunteer beneficiary in the certificate issued by such association, dies without leaving child or children, and without debts, prior to the death of the member, is the administrator of the deceased member, or the administrator of the deceased beneficiary, the proper party to bring suit against the association?" The question as to whether the administrator of the deceased bene ficiary, under the facts as stated by the court of appeals, is a proper party to sue for the benefit named in the certificate, seems to have been settled by the decisions of this court. In Dell v. Varnadoe, 148 Ga. 91, 95 S. E. 977, this court held: "A mere (156 Ga. 631, 119 S. E. 594.) volunteer beneficiary in a certificate issued by a mutual benefit association upon the life of one of its members has no vested interest therein prior to the death of the member." And in Smith v. Locomotive Engineers Mut. L. & Acci. Ins. Asso. 138 Ga. 717, 76 S. E. 44, it was held that "the interest of a beneficiary in a certificate on the life of a member of such association is a mere expect ancy, which becomes vested only on the death of the member." See also Modern Woodmen v. Puckett (Pilcher v. Puckett) 17 L.R.A. (N.S.) 1083 (3) and note (77 Kan. 284, 94 Pac. 132). The general insurance law is not applicable to mutual benefit associations, such as the one involved in the present case. Park's Code, § 2564 (t); Union Fraternal League v. Walton, 112 Ga. 315, 37 S. E. 389. Also Fraternal Life & Acci. Asso. v. Evans, 140 Ga. 284, 78 S. E. 915; Perry v. Tweedy, 128 Ga. 402 (6), 119 Am. St. Rep. 393, 57 S. E. 782, 11 Ann. Cas. 46. The next inquiry is as to whether the administrator of the deceased member can bring suit against the mutual benefit association. The weight of outside authority is to the effect that, in the event of the death of the beneficiary in a mutual benefit association certificate, in the lifetime of the member, if the member fails to designate another benefiary of the class provided by the constitution and by-laws of the order, Insurancepredecease of beneficiarywho may enforce. the benefits in such case revert to the order. Bacon, Life & Acci. Ins. 4th ed. 313; Warner v. Modern Woodmen, 67 Neb. 233, 61 L.R.A. 603, 108 Am. St. Rep. 634, 93 N. W. 397, 2 Ann. Cas. 660; 29 Cyc. 152, 162. In 19 R. C. L. 1314, it is said: "By the decided weight of authority, however, if a member dies leaving no designated beneficiary qualified to take, and there is no one who is entitled to payment under the charter, constitution, or by-laws of the association, or by virtue of statutory provisions, then the association is under no obligation to pay to anyone, nor can the fund be recovered by his executor or administrator as assets of his estate." There is no waiver of the right to the fund on the part of the mutual benefit association, but, on the contrary, it is insisted that the association is entitled to it. In the following cases the member's heirs took to the exclusion of the beneficiary's heirs or representatives: Haskins v. Kendall, 158 Mass. 224, 35 Am. St. Rep. 490, 33 N. E. 495; Espy v. American Legion of Honor, 7 Kulp, 134; Speegle v. Sovereign Camp, W. W. 77 S. C. 517, 58 S. E. 435; Fischer v. American Legion of Honor, 168 Pa. 283, 31 Atl. 1089; Supreme Council, A. L. H. v. Gehrenback, 124 Cal. 43, 56 Pac. 640; Michigan Mut. Ben. Asso. v. Rolfe, 76 Mich. 146, 42 N. W. 1094; Supreme Council, R. A. v. Bevis, 106 Mo. App. 429, 80 S. W. 739; Richmond v. Johnson, 28 Minn. 447, 10 N. W. 596; Daniels v. Pratt, 143 Mass. 216, 10 N. E. 166; note in 17 L.R.A. (N.S.) 1086. But in some of those cases, at least, provision was made, either in the constitution, charter, or by-laws of the society, preventing a forfeiture. effect of rule of insurer. But in the question propounded by the court of appeals there is no suggestion that there is any provision in the constitution, charter, by-laws of the society, or in the certificate of membership, either generally or specially, or by statute of the state, which would prevent a forfeiture; and we take it that the disposition of the benefit is generally determined by these provisions. In the absence of such provisions we hold, with the weight of outside authority, that the benefit reverts to the society, and, answering the question propounded by the Court of Appeals as asked, and assuming that the Court of Appeals means to ask whether in the one case or the other the administrator can bring suit against the association for the benefit named in the certificate, we are of the opinion that neither the administrator of the beneficiary nor the administrator of the member of the mutual benefit association is a proper party to bring suit against the association for the benefit named in the certif icate, so far as disclosed by the form of the question propounded by the Court of Appeals. All the Justices concur. ANNOTATION. Disposition of benefit fund in benefit society on failure of beneficiary in absence of specific provision for such contingency. I. In general, 762. II. Estate of beneficiary, 762. III. Estate of member, 764. 1. In general. This annotation does not include cases where the distribution of the fund in a mutual benefit society in case of failure of a beneficiary is governed by a specific provision of the constitution or by by-laws of the society, as it is assumed that the contract of membership is made with reference to the by-laws of the organization, and that they have become a part of the contract. It is difficult to align the cases on this question with accuracy as to the theory on which the benefit fund is to be distributed in the absence of a beneficiary, for for the disposition thereof depends on, or rather is affected by, the persons whom the member left surviving him. The aim, therefore, has been to classify with reference to the terms employed by the court to describe the persons, or classes of persons, entitled in the particular instance; although it is not clear but that in many instances, as, for example, where the fund is awarded to the "estate" or to the "heirs" of the member, the term used is an accident in the choice of words rather than intentional. It will be observed that in a number of the cases set out herein the association is not denying its liability for the fund, as in the reported case, but has expressed its willingness to pay the fund to the person to whom the court directs it shall be paid. And it has been said that under such circumstances the court will make an equitable distribution there V. Wife and children of member, 770. VI. Persons in eligible classes of beneficiaries, 774. VII. Reversion to society, 777. of. Supreme Colony, U. O. P. F. v. Towne (1914) 87 Conn. 644, 89 Atl. 264, Ann. Cas. 1916B, 181; Sovereign Camp, W. W. v. Muth (1920) 91 N. J. Eq. 460, 109 Atl. 853. II. Estate of beneficiary. It is a general rule that the beneficiary designated in a benefit certificate has only a contingent interest which is devested by his death before that of the insured, so that nothing passes to the beneficiary's estate in such case, in the absence of an express provision to that effect in the laws of the order. California. Supreme Council, A. L. H. v. Gehrenbeck (1899) 124 Cal. 43, 56 Pac. 640. Colorado. Rollins v. McHatton (1891) 16 Colo. 203, 25 Am. St. Rep. 260, 27 Pac. 254; Finnell v. Franklin (1913) 55 Colo. 156, 134 Pac. 122. Connecticut. Supreme Lodge, N. E. O. P. v. Hine (1909) 82 Conn. 315, 73 Atl. 791; Supreme Colony, U. O. P. F. v. Towne (1914) 87 Conn. 644, 89 Atl. 264, Ann. Cas. 1916B, 181; Order of Scottish Clans v. Reich (1916) 90 Conn. 511, 97 Atl. 863. Iowa. Schmidt v. Northern Life Asso. (1900) 112 Iowa, 41, 51 L.R.A. 141, 84 Am. St. Rep. 323, 83 N. W. 800; Cooper v. Order of Railway Conductors (1912) 156 Iowa, 481, 137 N. W. 472; Bush v. Modern Woodmen (1915) 182 Iowa, 515, 152 N. W. 31, 162 N. W. 59. Kansas. Boice v. Shepard (1908) 78 Kan. 308, 96 Pac. 485. Pilcher v. Puckett (Modern Woodmen v. Puck Minnesota. Richmond v. Johnson (1881) 28 Minn. 447, 10 N. W. 596. Mississippi. Carson v. Vicksburg Bank (1897) 75 Miss. 167, 37 L.R.A. 559, 65 Am. St. Rep. 596, 22 So. 1; Sykes v. Armstrong (1916) 111 Miss. 44, 71 So. 262. Nebraska. Woodmen (1903) 67 Neb. 233, 61 L.R.A. 603, 108 Am. St. Rep. 634, 93 N. W. 397, 2 Ann. Cas. 660. Warner v. Modern New Jersey. Golden Star Fraternity v. Martin (1896) 59 N. J. L. 207, 35 Atl. 908. Texas. Grand Lodge, C. K. P. v. Mackey (1907) Tex. Civ. App. -, 104 S. W. 907. Wisconsin. Given v. Wisconsin Odd Fellows Mut. L. Ins. Co. (1888) 71 Wis. 547, 37 N. W. 817. And see the reported case (DISTRICT GRAND LODGE, G. U. O. 0. F. v. COTHRAN, ante, 759). As a consequence of the right of a member of a mutual benefit association to change at will the beneficiary in the certificate held by him, the beneficiary, upon designation, acquires merely an expectancy, revocable at any time during the life of the insured, which does not ripen into a property right until his death. Supreme Colony, U. O. P. F. v. Towne (1914) 87 Conn. 644, 89 Atl. 264, Ann. Cas. 1916B, 181. But it has been held that the interest in a benefit certificate in an association whose by-laws entitle a member to designate and change the beneficiary at will goes to the beneficiary's representatives, and not to the representatives of the member, upon the death of the member after that of the beneficiary, without having designated a new beneficiary. Thomas v. Cochran (1899) 89 Md. 390, 46 L.R.A. 160, 43 Atl. 792; Expressman's Mut. Ben. Asso. v. Hurlock (1900) 91 Md. 585, 80 Am. St. Rep. 470, 46 Atl. 957. The court in the Cochran Case (Md.) supra, stated that the designation by the member of a beneficiary conferred upon the latter the beneficial interest and the proceeds of the policy when such became due, and the estate thus acquired, although liable to be defeated by the appointment of the new beneficiary, possessed the inherent qualities of an estate of a beneficiary under an ordinary policy of life insurance, and was a valuable asset, which at the death of the beneficiary devolved upon his administrator in whom the title remained unless devested by the member in his lifetime by the designation of a new beneficiary in the manner prescribed by the by-laws, and that neither the children nor the grandchildren of the deceased member were entitled to any interest in the fund in their own right. In Supreme Council, C. K. A. v. Densford (1900) 21 Ky. L. Rep. 1574, 49 L.R.A. 776, 56 S. W. 172, infra, it was said that the beneficiary named in a certificate of membership in a benefit association is vested with a definite interest in the benefit fund which will be due on the certificate upon the death of the member, which can only be defeated by the member making other or different disposition of that part secured to the original beneficiary. And in Johnson v. Hall (1891) 55 Ark. 210, 17 S. W. 874, it was held that as the benefit certificate constituted an ordinary insurance policy, and as the member had no power to change the beneficiary named therein in the absence of an express authorization by the policy or the by-laws of the association, the beneficiary acquired a vested interest in the certificate upon its issuance, which descended to her heirs upon her death prior to the death of the holder of the certificate. But under a statute providing that when insurance is effected by any person on his life, in favor of someone other than himself having an insurable interest, "the lawful beneficiary thereof other than himself, or his legal representatives, shall be entitled to its proceeds as against the creditors and representatives of the persons effecting the same," it has been held that where the beneficiary predeceased the insured, and no other beneficiary was designated, the personal representatives of the beneficiary were entitled to the benefit, as against the insured person's representatives. Neal v. Shirley (1910) 137 Ky. 818, 127 S. W. 471; Buckler v. Supreme Council, C. K. A. (1911) 143 Ky. 618, 136 S. W. 1006; Vaughan v. Modern Brotherhood (1912) 149 Ky. 587, 149 S. W. 937; Hall v. Ayer (1907) 32 Ky. L. Rep. 288, 105 S. W. 911. These decisions seem to be based upon the ground that under such statute the beneficiary has a vested interest in the benefit fund, which can only be devested by the act of the member in his lifetime. And in Bright v. Supreme Council, C. K. L. A. (1919) 183 Ky. 388, 209 S. W. 379, it was held that the Act of March 22, 1916, chap. 27, 6, changing this rule to conform to the general rule that the beneficiary's interest in the fund is a contingent one, which does not vest until the death of the member, did not operate to bar the heirs of a beneficiary who died prior to the death of a member of a mutual benefit association, from taking the beneficiary's interest, notwithstanding that the by-laws of the insurer were changed to conform to the statute, and provided that the entire proceeds were to go to the surviving beneficiary upon the death of one, since neither the statute nor the by-laws could devest a vested right of the beneficiaries in such certificates, although they were applicable to contracts thereafter made. In Supreme Council, C. K. A. v. Densford (Ky.) supra, it was held that the share of one of the three beneficiaries in a benefit certificate, who died during the life of the insured, leaving issue, was in the nature of a testamentary gift, and would pass to such issue in accordance with the rule as to devises or legacies prescribed by the Kentucky statute providing that, in case of the predecease of the devisee or legatee, his share should pass to the issue of such devisee or legatee, notwithstanding a by-law of the society to the effect that the share of one of two beneficiaries, who died during the life of the insured, should go to the other beneficiary pro rata, the court holding that in the light of the statute above referred to, the by-law must be construed to apply only when the deceased beneficiary left no issue. III. Estate of member. It has been stated by a number of courts that as a general rule a member of a mutual benefit association has no property rights in the fund which the association undertakes to pay upon his death, but has only a power of appointing a beneficiary. United States. Worley v. Northwestern Masonic Aid Asso. (1882) 3 McCrary, 53, 10 Fed. 227. Colorado. Finnell v. Franklin (1913) 55 Colo. 156, 134 Pac. 122; Rollins v. McHatton (1891) 16 Colo. 203, 25 Am. St. Rep. 260, 27 Pac. 254. Connecticut. Order of Scottish Clans v. Reich (1916) 90 Conn. 511, 97 Atl. 863. |