Grand Lodge A. O. U. W. of N. J. v. Gandy.

this certificate, inadvertently issued, in breach of the regulations of the order, that she bases her claim. After Mr. Middleton's death it appears to have been brought to the notice of the officers of the order that they had canceled the original certificate, and issued the new one, without Mr. Middleton having complied with the regulations of the society. The officers of the local lodge appear to have interested themselves in endeavoring to secure for Miss Gandy the $2,000 benefit, now come to be payable. The recorder of the local lodge drew up a letter, addressed to himself, dated February 22d, 1902, which he obtained to be signed by Mrs. George and Harry B. Middleton, children of Frank P. Middleton, the deceased member. The following is a copy of the letter, to which the recorder of the local lodge, being himself a notary public, appended the jurat:

"CAMDEN, N. J., 2-22, 1902.

"To G. Test, Recorder of Provident Lodge, No. 4, A. O. U. W. N. J.: "DEAR SIR-In answer to your verbal communication and questions we would say that we, the undersigned, are the only children of Frank P. Middleton, deceased, who was a member of Provident Lodge, No. 4, A. O. U. W., when he died.

"He held a beneficiary certificate, No. 309, in said order, which was made payable to Lydia Gandy, for $2,000 and named 'a dependent' in said certificate, when he made the same payable to her, in consideration of said dependency and being a cousin of his, the said Frank P. Middleton, deceased, we heartily accord with his wishes and designation of the payment of said sum to her by your order, and hereby waive any and all claims we might otherwise have against such payment, as his children, or against such sum ($2,000) being paid to her by your order on account of his death. We will further state that we will endeavor to do all in our power, and of our own volition, without any influence whatever (in doing or saying this), on the part of any other person or persons, and will assist the said Lydia Gandy to obtain the said amount ($2,000) due to her which is just and rightly due her, as our father, Frank P. Middleton, intended, and on account of the services rendered and as our father desired. So we desire the same to be paid to her.

"Witness: DANIEL H. CONDIT.

"Signed,

"MRS. MATTIE GEORGE,
"Daughter.
"HARRY B. MIDDLETON,

"Son.

"Sworn and 'scribed' before me, a notary public of the State of New Jersey, this twenty-second day of February, 1902, all alterations, additions and corrections were made before signing.

"GOLDEN TEST,

"Notary Public."

Grand Lodge A. O. U. W. of N. J. v. Gandy.

The uncontradicted proof is that, at the time this letter was obtained to be signed and sworn to by Mrs. George and Mr. Harry B. Middleton, they were unacquainted with the fact that they were, by the regulations of the society, themselves the beneficiaries entitled to be paid the benefit due on their father's death, in case Miss Gandy's nomination as beneficiary was, for any reason, ineffectual. It was represented to them that the letter and its verification were mere matters of form, and part of the process necessary and convenient to the payment of the money to Miss Gandy, in accordance with her unquestioned right. The transaction was wholly unsupported by the passing of any valuable consideration to the Middleton children. If considered as a gift to Miss Gandy, it was undoubtedly obtained to be executed by misleading statements made to the parties who signed the letter affidavit, and by the suppression of facts which ought to have been disclosed to them before they made such a gift.

It must be noted that this affidavit letter, which is claimed to have been a recognition of Miss Gandy's claim, was written after Mr. Middleton's death, and therefore at a time when, under the rules of the order, some definite person had become unchangeably entitled to the payment of the benefit. If Miss Gandy was entitled to it, she did not need to have her right assented to by the Middleton children. If they were entitled to it, they could not lawfully be deprived of that right by anything short of an actual assignment of their interest. Such an assignment must have been for some consideration of value, or, if by way of gift, they must have been informed of their rights, and knowingly have transferred them to Miss Gandy. Neither condition is shown in this affair. It is not pretended that any value passed, nor that there was any conscious gift. A gift by a donor who is ignorant of the fact that he is giving, cannot be sustained by any court.

Some correspondence between the executor of Mr. Middleton's will and Mrs. George was offered in evidence, indicating that the executor was, desirous of obtaining Mrs. George to ratify and confirm the attempted designation of Miss Gandy as beneficiary. These letters were written after the death of Mr. Mid

Grand Lodge A. O. U. W. of N. J. v. Gandy.

dleton, and after the right of the persons entitled to the benefit had been unchangeably fixed, unless altered by their own action. They were part of the effort to induce Mrs. George and Mr. Harry B. Middleton to recognize Miss Gandy's claim, and to execute such papers as might satisfy and protect the society in paying the fund to her. Nowhere in this cause is there any proof that, at the time of the doing of the acts by which the Middleton children are alleged to have ratified Miss Gandy's claim, there was any disclosure to them of the fact (well known to the persons who obtained the alleged ratifications) that, under the rules of the society, the Middleton children were themselves the beneficiaries, in case Miss Gandy's appointment was inefficient, and that, in securing the benefit to her, they would be depriving themselves of their rights, under the rules of the society.

As to the first point above discussed, it must be held that Mr. Middleton, by becoming a member of the society, accepted its regulations as the terms of his contract with the order. He agreed that his children should, if his wife predeceased him, become his beneficiaries, unless he changed them in the mode prescribed by the rules, or the grand lodge exercised its option and waived observance of that mode. He did not change his beneficiaries in the mode prescribed by the regulations, and the grand lodge did not waive the observance of that mode. It follows that his attempted change is nugatory, and that his children are entitled to the fund, under the provisions of paragraph 6 of the regulations.

If, however, it be assumed that all the requirements of the society's rules directing the mode of manifesting the member's purpose to change his beneficiary had been precisely observed by Mr. Middleton, it remains to consider the second objection to Miss Gandy's claim.

The regulation regarding the selection of beneficiaries is as

Grand Lodge A. O. U. W. of N. J. v. Gandy.

No member has any power to appoint a beneficiary outside of the classes fixed by the laws of the order. An attempt by a member to designate, as his beneficiary, a person who is not within the class prescribed by the regulations, must be treated as nugatory. Britton v. Royal Arcanum, 1 Dick. Ch. Rep. 105; affirmed on appeal, 2 Dick. Ch. Rep. 325. In that case the limitation was ascribed to the definition of the objects of the corporation in the statute under which it was organized. In this case the society is a voluntary organization. Its declaration of objects and its constitution and regulations, however, constitute the contract of its constituent members. The provisions of these articles just as effectively define and limit the extent of the scheme as a statute limits the authority of a corporation organized under it.

This limitation on the power of the member to select the recipient of his benefit is one of the fundamental distinctions between a beneficial society and a general life insurance. A member of a beneficial society can appoint his benefit to be paid only to a person within the class named in the regulations of the order, but one insured in a life insurance company may direct his policy to be paid to anyone whom he may select. The beneficial society contract does not contemplate general insurance, nor do the safeguards which the law provides for such business apply to protect members of such societies. They do not have the equipment or capacity to conduct such business. The payment of benefits to but a limited class is recognized as one of the expressly-declared objects of the society whose methods are now under examination. One object is stated to be

"to pledge the members to the payment of a stipulated sum to such beneficiary as a deceased member may have designated, subject, however, to such restrictions and upon such conditions as the laws of the order may prescribe."

(See statement of objects, page 5, paragraph 6, of the constitution, &c.)

The laws of the order require that each member, in selecting his beneficiary, shall designate either a member of his family, some one related to him by blood, some one who is dependent

Grand Lodge A. O. U. W. of N. J. v. Gandy.

upon him, or his affianced wife. (See constitution, paragraph 5.) If the person designated by the member is not within any of these classes, it is not within the member's power effectually to appoint his benefit to be payable to him. Payment to such outside persons is not within the scheme for which the society was formed, nor within the society's agreement to pay benefits. The attempt to designate a person who is outside of these classes has no validity.

It is also true that the characteristics of some one of these classes must actually be possessed by the person designated. The member cannot falsely declare the person designated to be within the class, and thus impose upon the society the obligation to pay benefits outside of the plan upon which the society is founded. If he attempts to do this, his invalid appointment will be disregarded, and the benefit will be directed to be paid to that beneficiary to whom, under the regulations of the order, it would be due if there had been no designation. This was done in the case of Britton v. Royal Arcanum, ubi supra.

There is no pretence or claim in this case that Miss Gandy, whom Mr. Middleton has attempted to designate as his beneficiary in the place of his children, was a member of his family, or that she was related to him by blood, or that she was his affianced wife. No proof had been produced claiming that she occupied either of these relations to Mr. Middleton, nor has any argument been made in support of such a theory. The members of a man's family are his wife and children. The phrase certainly does not, as usually understood, include the servants who may be casually employed in his kitchen.

The class within which it is attempted to place Miss Gandy, in order to support her claim that she was rightfully designated to receive from this society, is that she was a dependent upon Mr. Middleton. In his affidavit he declares that "it is solely because of the dependency of the said Lydia Gandy that he desires the change, in her favor, of his benefit certificate." The undisputed evidence produced on this hearing shows that Miss Gandy was a cousin of Mr. Middleton's wife, and that she was not related to him by blood. She was in his employment as a