Smith v. People's Mut. Ben. Soc.

Macomber, J. On the 8th day of April, 1886, Patrick Byan made application to this defendant, which was then known as, and which bore the name of, the Old People’s Mutual Benefit Society, for a policy of insurance upon his life for the benefit of one John Driscol, his son-in-law. Accordingly, the defendant, under the name of the Old People’s Mutual Benefit Society, issued a policy of insurance to the applicant, by which the defendant “insured the life of Patrick Byan for a sum not to exceed four fifths of the amount collected from one assessment on all the members in this class: provided, always, that in case death shall occur within ninety days from the date of this certificate, the amount paid hereon shall not exceed the sum paid in by the insured, with an addition of ten per cent, of the same. If death occurs after ninety days, and within one year, from the date hereof, the sum paid hereon shall not exceed one thousand dollars. If death occurs after one year, and within two years, from the date hereof, the sum paid hereon shall not exceed two thousand dollars. If death occurs after two years, and within three years, of the date hereof, the amount paid hereon shall not exceed three thousand dollars. If death occurs after three years, the amount paid hereon shall not exceed four thousand dollars. The -sum to be paid, in accordance with the rules and regulations of the society, to John Driscol, son-in-law of. the assured, or said beneficiary’s heirs, administrators, or assignees, within ninety days after due notice and proofs of death have been filed at the home office of the society.” The policy or certificate contained a condition that the same shall be incontestable by the company after a year from its date. Among the by-laws of the defendant (section 17) it is provided that the beneficiary must be husband, wife, family, heirs, legal assignee, or creditor of the insured person. On the 14th day of October, 1886, for a past consideration, John Driscol assigned to the plaintiff in this action all his title and interest in the certificate or policy. The plaintiff was neither a member of the family of Byan, 433 nor related to him in any way, nor had she any insurable interest in his life. But it is proved and found by the learned court that the assignment from Driseol to the plaintiff was made with full knowledge and assent of the company. The proof is satisfactory tiiat John Driseol paid the assessments which were levied up to the time of the assignment to the plaintiff, and that thereafter the plaintiff herself made such payments in due time. In our judgment, it does not make any difference whether the original payee in the policy, John Driseol, was a person who came within the number of those mentioned in the by-laws for whose benefit the policy might be taken out, because the company knew that the relationship to the applicant for insurance was only that of a son-in-law. The company should be estopped to assert afterwards that the policy was void for any reason, because it is not a case of deception practiced by the applicant for insurance, nor is it a case of mutual mistake on the part of the parties to the contract. The action of the company in issuing the policy was clearly a waiver of any by-law or limitation which may have existed in the rules governing its action. The assignment to the plaintiff is shown to have been with full knowledge and consent of the defendant. Xo fraud is shown to have been practiced by the applicant, and it seems to us that objection to the payment of the claim now made for the amount due upon the certificate is untenable. The policy having been issued with full knowledge that the beneficiary was a son-in-law of the insured, without bearing any other relationship to him, and the assignment having been made with the full knowledge and consent, not to say the direction, of the defendant, and as, by the terms of the policy, no contest after one year can be made, it seems to follow, with reasonable certainty, that the plaintiff is entitled to recover the judgment which was pronounced at the circuit. This decision is fully borne out in the case of Wright v. Association, 118 N. Y. 237, 23 N. E. Rep. 186. We concur in the opinion of the learned justice pronounced at the circuit, where he says: “It has been held in many cases that where the policy provided that in case of death the policy was to be paid by assessments upon its members, nevertheless an action at law could be maintained for damages upon a broken contract to make such assessment upon showing facts from which the jury could ascertain what such assessment would probably have brought. It has been held under such policies that the plaintiff has either his legal remedy for damages upon a violated contract, or an equitable remedy to compel the making of assessments, or the specific performance of a contract of insurance.” O'Brien v. Society, 117 N. Y. 318, 22 N. E. Rep. 954. We further concur with the learned justice, that the proper judgment to be pronounced was of an equitable nature, directing that the claim of the plaintiff be included in the pool forming at the time of the entry of the judgment herein, and that the defendants pay to the plaintiff the sum realized upon such assessment upon the plaintiff’s claim, not exceeding the sum of $3,000. If these views are correct, it follows that the judgment appealed from should be affirmed. Judgment appealed from affirmed, with costs. All concur.