WHAT IS MEANT BY THE WORDS "PERSONS DEPENDENT UPON THE MEMBER," AS USED IN STATUTES DEFINING WHO MAY BE BENEFICIARIES. By Carlos S. Hardy, Los Angeles, Calif. Read Before Law Section August 15, 1910, at Detroit, Mich. Thirty of the states have, through their legislatures, prescribed and defined the classes of persons who may receive the benefits due upon the maturity of certificates in fraternal societies. In the states of Connecticut, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wyoming and the District of Columbia the statutory provisions relating to the subject of this address are almost identical. The language of the Illinois statute may be quoted as that of all of those named, so identical, or nearly so, are they; it is: "Payments of death benefits shall only be paid to the families, heirs, blood relations, affianced husband or affianced wife of, or to persons dependent upon the member,” Volume 1, Fraternal Society Law, page 142. In Maryland the statutory provision reads “to persons dependent upon the member for food, lodging, clothing or education." Volume 1, Fraternal Society Law, page 392. In Michigan, the dependents are not named in the statute except "dependent children." Volume 1, Fraternal Society Law, page 451. All who are at all familiar with fraternal societies and the public legislation affecting them know that their beneficiaries have ever been a very limited class of persons closely identified to their members. Indeed, this is one of the distinguishing marks of difference between the fraternals and other life insurance institutions. The fraternal society originally was one that gave to its members the benefits of social intercourse, brotherly co-operation and benevolence and to the immediate members of the member's family fraternal benefits upon their death. While there has been some enlargement of the classes of persons who may become the beneficiaries of the members of fraternal societies the old principle that such persons shall be dependents upon the bounty of the members still largely holds good. The right to name a beneficiary, within the statutory classes, is the only control the member as such has over the disposition of the funds to be paid in benefits by his society. From the language of the statutes dealing with our subject it seems that there need be no doubt as to who is meant by the class term, "persons dependent upon the member." Except for the fact that we are all exceedingly subject to the mistakes and frailties of humanity, there would be no occasion for this number on the program. Many members of societies have thought that persons upon whom they, as members, might be dependent were the persons included in the statute. and other members have had different ideas as to who were dependent upon them, and so the courts have frequently been called upon to determine who was the beneficiary in the case in question. Then again the persons named as beneficiaries may have been dependent upon the member at the time or may have been in contemplation of dependency occurring at some future time, while at the maturity of the certificate it was found that the dependency no longer existed, and so cases of that kind have come up for determination. We can, perhaps. get the best answer to the question contained in my subject by examining the opinions of those courts that have decided the question. The cases where this question has been determined are grouped and treated as follows: ALABAMA. Beneficiary-Stepson. A member's wife was named as beneficiary, but she, deceased, leaving a son by a former husband, the member having no children by this wife, and subsequently the stepson claimed to take the benefit under the American Legion of Honor by-law providing for dependents and relatives of members to be named as beneficiaries, but the court held that the affinity existing between the stepson and the stepfather was dissolved by the death of the mother and wife and that said stepson was not entitled to take the benefit, the court saying that a grown married man, earning a good salary, and saving money, is not a dependent within the terms of the by-laws of a benefit society. permitting dependents to become beneficiaries of such society. Morey et al. v. Monk, Feb. 6, 1906, 145 Ala. 301; 40 So. 411. CALIFORNIA. Dependency of Beneficiary. A person not related to a member of a fraternal society, who has no legal or moral claim upon him, beyond the member's voluntary con tributions to her support during his life, which he might have ceased at any time, and who is a married woman having a husband capable of supporting her, and is not dependent upon such member within the meaning of a by-law allowing a person to designate as beneficiary in his certificate persons "who shall be dependent upon him," is not entitled to take the benefit. The "dependence" which is there meant is a dependence resting upon some moral, legal or equitable ground and not a dependence which is only a matter of favor, founded upon the mere whim of the member, and which may be cast aside without violating any legal or moral obligation. Caldwell v. Grand Lodge, A. O. U. W., November 10, 1905, 147 In the same case the court very properly held that the right to name certain beneficiaries is not a vested right. Where the original by-laws allowed any person to be named by the member as a beneficiary, a change made in the by-laws requiring members to designate some member of the family, or some one related by blood, or some one dependent upon him, is reasonable, and after such by-laws went into effect the member had no right to name a beneficiary other than one of the classes therein designated. Ibid. In this state it was further held that a designation valid, remains so. Where a fraternal society provided in its by-laws that members might designate some one related by blood, or dependent, as beneficiary, and where the mother of an unmarried member has been designated, such designation being valid at the time when made, if left unchanged by the member after marriage, it was valid at his death, and the mother is entitled to the benefit to the exclusion of the widow and children of the member. Sheehan v. Journeymen Butchers' Protective Benevolent Association, March 14, 1904, 142 Cal. 489; 76 Pac. 238. To the same effect was the following case: Divorce of Beneficiary-Effect Of. Where a member has designated his wife as his beneficiary in accordance with the laws of the society, and she subsequently obtained a divorce from him, after which he married and had children by his second wife, but died without having changed the beneficiary certificate, the divorced wife is entitled as the beneficiary named in the certificate to recover the amount thereof to the exclusion of the second wife and his children by her. The by-law of the society providing for the appointment of beneficiaries gave the member power to name "such person or persons as said member might have directed while living." It was further provided that the beneficiary "shall in every instance be one or more members of his family, or some one related to him or dependent upon him." And the court held that the latter provision is to be construed as referring to the relationship existing at the date of the certificate, and that the designation of a beneficiary, valid in its inception, remained so, notwithstanding the relationship of the member to the beneficiary had ceased. Courtois v. Grand Lodge, A. O. U. W., et al., Feb. 21, 1902, 135 Beneficiary-Sister-in-Law. Where a benefit certificate in the American Council of the Order of Chosen Friends was made payable to the wife of a brother of a member, not as a gift, but in consideration of the care and support by the husband and wife of the member's children, and in satisfaction of indebtedness of the member to the husband, and of the payment of future assessments by the husband upon the certificate, the wife was held to be a proper beneficiary, but in this case there is no real contest involving the sister-in-law's claim, the question before the court being whether or not the proceeds of the certificate, which had been collected and invested in real estate, was the separate property of the wife or the property of the community estate of the husband. and wife. This is not stated as a reason by the court, but it seems that it might have been so argued that since the member's children were dependent upon him and such dependency had been undertaken by contract by the sister-in-law that she might be named as the beneficiary in their stead and a sort of a trustee for them. Bolinger v. Wright, May 1904, 143 Cal. 292; 76 Pac. 1108. COLORADO. Beneficiary-Divorce of Wife-Legal Heirs. The laws of a society provided that beneficiaries should be members of the family or a person or persons related to the member by blood or dependent upon him, and that under no circumstances should a certificate be issued to any other person, and they provided further that in case of the death of all the beneficiaries named before the death of the member occurred, and he failed to name another, that the benefit should be paid to the member's legal heirs. A certificate was issued, payable to the member's wife, from whom he was subsequently divorced, but no new designation of a beneficiary was made, and upon the member's death claim was made by the heirs-at-law and the divorced wife. The court held that the procuring of the divorce was not a legal equivalent to the death of the beneficiary, so as to vest in the heirs of the member any right to the fund. The court held that the heirs-at-law were not entitled to the fund, which had been paid into court by the society under a bill of interpleader. The fund was given to the divorced wife, and the court in its opinion discussed numerous authorities bearing on the question pro and con. Overhiser v. Overhiser, Sept. 1889, 14 Colo. App. 1; 50 Pac. 75. HAWAII. Dependency on Son. In Hawaii it was held that a father aged 60 years and a cripple, who had a wife of the same age to support, and to whose support the member (son) in his lifetime had contributed his wages, was entitled to take the benefit due upon the membership of the son. Daniel v. Portuguese Mut. Benefit Society of Hawaii, Nov. 23rd, 1896, 10 Hawaii 518. |