Majority
p. 697Julia Aiken, Pl’ff, v. The Massachusetts Benefit Association and Frey C. Leeson, Def’ts. (City Court of New York, Trial Term, Filed December, 1890.)
Headnote
Insurance (lire)—Assignment on policy under Massachusetts statute.An assignment of a policy issued by a company organized under the laws of Massachusetts on the life of a husband in favor of the wife made to a creditor is void; hut such defense is not available to the insurer in an action to recover the fund after death of the member where the beneficiary is a party and asserts the validity of the assignment.
The Massachusetts Benefit Association, on May 28, 1881, delivered to Daniel W. Lesson its certificate of membership, whereby it agreed to pay to Frey 0., his wife, in the event of his death, a sum equal to the amount received from a death assessment, but not to exceed $5,000. On June 26, 1889, Daniel W. Leeson borrowed $350 from the plaintiff, and joined with his wife (the beneficiary) in an assignment of one-fifth of the certificate of membership. The association consented to the transfer. In January, 1890, the assured, Daniel W. Leeson, departed this life, and the association levied the necessary assessment and paid to his widow the sum of $4,000, reserving the remaining $1,000 to protect itself from the claim of the plaintiff as assignee. Mrs. Aiken brought the present action to recover this sum. The association denied the validity of the assignment and pleaded the non-joinder of the widow, whom it claimed was a necessary party to the determination of the controversy. The widow, Mrs. Leeson, was thereupon brought in and joined as a party, so that all persons interested in the fund are now before the court. The rights, equities and liabilities of the respective parties are up for determination.
Isaac N. Folk, for pl’ff; J. K. Haywood, for the association; Me Gall & Arnold, for the beneficiary.
The death assessment having realized the full limit of the policy, there is no question as to the extent of the liability of the association. Darrow v. Family Fund Society, 116 N. Y., 537 ; 27 N. Y. State Rep., 474; and the contention is narrowed down to determining the conflicting claims of the plaintiff, as assignee, and the beneficiary, to the balance unpaid. The plaintiff insists that the entire sum belongs to her, but the writings clearly show that the transfer was intended as a pledge, and, if valid, it is operative only to the extent of the advance,- viz., $350. The association was organized under the Laws of Massa
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chusetts, and the purpose for which such beneficiary associations can be formed is strictly limited by statute, to rendering assistance to the widows and orphans of deceased members, or other persons dependent upon them, and transfers made during the lifetime of the assured to creditors or others not within the purpose of the statute are void. Briggs v. Earl, 139 Mass., 473 ; Daniels v. Pratt, 143 id., 216. The classes of persons to be benefited are specially designated, and the corporation has no authority to create a fund for other persons than of the classes named. Am. Legion of Honor v. Perry, 140 Mass., at p. 589. The transfer to the plaintiff (she not being within the classes designated) would have to be declared inoperative, but for the fact that the beneficiary, who now has a vested interest in the fund, is before the court, and has by her answer asserted the validity of the assignment to the extent of the advance actually made on the faith of it. If the transfer is to be deemed effective as to her, it is because it is operative on the fund. The association cannot make a defense for her, if she will not make it for herself, as it is immaterial to it ■ as a stakeholder what becomes of the fund so long as the person for whose benefit it was intended directs its disposition. Her right to the fund is now a vested one, and her jus disponendi absolute. It follows that Mrs. Leeson, the beneficiary, is entitled to judgment against the association for the unpaid $1,000, and out of the sum so to be paid the plaintiff is entitled to recover $350 and interest from June 26, 1889. Judgment, accordingly, without costs. Submit findings and decree in accordance herewith.