DISTRICT GRAND LODGE NO. 18 etc. v. COTHRAN

Supreme Court of Georgia1923-10-12No. No. 3628

156 Ga. 631

Summary · law.co

Holding. Neither the administrator of the deceased beneficiary nor the administrator of the deceased member is a proper party to bring suit against the mutual benefit association for the named benefit, because in the absence of constitutional, by-law, or statutory provisions preventing forfeiture, the benefit reverts to the association.

A mutual benefit association member named his wife as the volunteer beneficiary under his membership certificate. The wife died before the member, leaving no children and no debts. The Court of Appeals asked which administrator—of the deceased wife or the deceased member—could properly sue the association for the benefit. The Supreme Court held that a beneficiary in such a certificate possesses only an expectancy, not a vested interest, until the member's death. Because the wife died before the member, her interest never vested. The court examined whether the member's administrator could recover the benefit as estate assets but found that absent any provision in the association's governing documents or state law preventing forfeiture, the benefit reverts to the association itself.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a volunteer beneficiary in a mutual benefit association certificate has a vested interest prior to the member's death
Proper party to sue for benefit when beneficiary predeceases the member
Whether benefit reverts to association or passes to member's estate when beneficiary dies before member without designated successor

Procedural posture

The Court of Appeals requested advisory instructions from the Supreme Court regarding the proper party to bring suit for a mutual benefit association benefit under specific factual circumstances.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Hill, J.

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 beneficiary, 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. Varnedoe, 148 Ga. 91 (95 S. E. 977), this court held: “A mere 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 Association, 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 has a mere expectancy which becomes vested only on the death of the member.” See also Pilcher v. Puckett, 77 Kan. 284 (94 Pac. 132, 17 L. R. A. (N. S.) 1083 (3), and note).

The general insurance law is not applicable to mutual benefit associations, such as the one involved in the present ease. Park’s Code, § 2564 (t); Union Fraternal League v. Walton, 112 Ga. 315 (37 S. E. 389); Fraternal Life Association v. Evans, 140 Ga. 284 (78 S. E. 915); Perry v. Tweedy, 128 Ga. 402 (6) (57 S. E. 782, 119 Am. St. R. 393, 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 beneficiary of the class provided by the constitution and by-laws of the order, the benefits in such case revert to the order. Bacon on Life and Acc. Ins. (4th ed.) § 313; Warner v. Modern Woodmen, 67 Neb. 233 (93 N. W. 397, 61 L. R. A. 603, 108 Am. St. R. 634, 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 any one, 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 (33 N. E. 495, 35 Am. St. R. 490); Espy v. American Legion of Honor, 7 Kulp, 134; Speegle v. Sovereign Camp, 77 S. C. 517 (58 S. E. 435); Fischer v. American Legion of Honor, 168 Pa. 283 (31 Atl. 1089); Supreme Council v. Gehrenbeck, 124 Cal. 43 (56 Pac. 640); Michigan Mut. Ben. Asso. v. Rolfe, 76 Mich. 146 (42 N. W. 1094); Supreme Council 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 eases at least, provision was made, either in the constitution, charter, or bj-laws of the society, preventing a forfeiture. 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 prounded 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 certificate, so far as disclosed by the form of the question propounded by the Court of Appeals.

All the Justices concur.