Eckert v. Mutual Relief Society of Rochester — 17 N.Y. St. Rep. 877

Majority

p. 877

Jacob Eckert, Pl’ff, v. The Mutual Relief Society of Rochester, Deft.

(Supreme Court, Special Term, New York County,

Filed June 16, 1888.)

Headnote

Insurance (life)—On co -operative or assessment plan—Certificate OF MEMBERSHIP—WHO CAN BE NAMED AS BENEFICIARY—LAWS 1883, CHAP. 175.

In an action brought to recover the amount due on the certificate issued by the defendant (a corporation organized under Laws 1883, chap. 175), to transact the business of life insurance upon the co-operative or assessment plan, the defendant, as its second defense, alleged that among the bylaws referred to in said certificate of membership it was provided that the objects of said societies shall be to secure mutual benefit and protection to its members and to furnish aid to their families, their heirs or relatives by ■consanguinity or affinity in case of a member’s death, and such beneficiary shall be named in the application, and by another by-law, that the plan of the society is to issue membership certificates for a sum not to exceed $2,000, to be paid to the heirs or beneficiaries of deceased members named in his certificate. No by-law was alleged that makes a certificate which names a beneficiary who is not related to the member void, or that limits the power granted by said statute to the corporation, or that provided that the statements in the application for membership as to the relationship of the beneficiary which was untrue should avoid the certificate. On demurrer to the second separate defense set forth in defendant’s •answer on the ground that it was insufficient in law, Held, that the demurrer was good. That the corporation had power to issue the certificate. That no fact was alleged in the second separate defense that would make the certificate void.

Demurrer to the second separate defense alleged in the answer.

Simon Sultan, for pl’ff; Fanning & Williams, for def’t.

The plaintiff demurs to the second separate defense set forth in the defendant’s answer on the ground that the said defense is insufficient in law upon the face thereof. The second defense is complete in itself, and if the allegations are not sufficient to constitute a defense to the plaintiff’s cause of action, the demurrer must be sustained.

p. 878

The defense demurred to alleges that the defendant was. incorporated under chapter 175 of the Laws of 1883. Section 1 of that act provides that the object for which corporations may be formed under the provisions of the act is for the purpose of transacting the business of life or casualty insurance, or both, upon the co-operative or assessment plan. _ By section 5 of that act it is provided that any corporation, association or society which issues any certificate’ whereby, upon the decease of a member, any money, etc., which is to be paid to the legal representatives of such, member, or to the beneficiaries designated by such member, _ shall be deemed to be employed in the business of life insurance upon the co-operative or assessment plan, and shall be subject to the provisions of that act; and by section. 18 of the act it is provided that membership in any corporation, association or society transacting the business of life or casualty insurance, or both, upon the co-operative or assessment plan, shall give to any member thereof the right, at any time, with the consent of such corporation, association or society, to make a change in his payee or payee’s benificiary or beneficiaries, without requiring the consent of such payee or beneficiaries.

_ There is no provision in the act that would make the certificate issued in this action illegal, or restrict the power of the corporation to issue such a certificate, but the payment of the amount named to the beneficiary, named by the member is expressly recognized by the provisions above cited.

The defendant had, therefore, power under its charter to-make the contract in question. The defense demurred to alleges that among the by-laws referred to in such certificate of membership issued by this defendant, it was provived by section 2 of article 1, that the objects of said societies shall be to secure mutual benefit and protection to its members, and to furnish aid to their families, their heirs or relatives, by consanguinity or affinity in case of a member’s death, and such beneficiary shall be named in the application; and by another section of said by-laws, it is provided that the-plan of the society is to issue membership certificates for a sum not to exceed $2,000, tobe paid to the heirs or beneficiaries of deceased members named in his certificate.

No by-law is alleged that makes a certificate which names a beneficiary who is not related to the member void, or that limits the power granted by the statute to the corporation, or that provides that the statements in the application for membership as to the relationship of the beneficiary which was untrue, should avoid the certificate.

There is no allegation in the defense demurred to that, the-certificate contained any statement making the by-laws a. part of the certificate, and where the statute under which

p. 879

the defendant is organized and is acting expressly recognizes the right to name a beneficiary, without limiting the beneficiary to any particular class, and nothing in the bylaws or the certificate expressly restricts such right, the corporation had power to issue the certificate, and no fact is alleged in the second defense that would make the certificate void.

The case, therefore, comes within the decision of Massey v. The Mutual Relief Society ( 102 N. Y., 529 ; 2 N. Y. State Rep., 487). The defendant accepted Eckert as a member, received his dues and assessments, and thereby agreed to pay to the person named in the certificate the sum of $2,000. The defense is an extremely technical one, and I do not think should prevail.

The demurrer is sustained aud judgment ordered for the plaintiff on the demurrer with costs, with leave to defendant to amend the answer within twenty days on payment of costs.