Lahey v. Lahey

• Decision Date: 17 March 1903
• Citation: 66 N.E. 670,174 N.Y. 146
• Parties: LAHEY v. LAHEY et al.
• Court: New York Court of Appeals Court of Appeals

174 N.Y. 146

66 N.E. 670

LAHEY

v.LAHEY et al.

Court of Appeals of New York.

March 17, 1903.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Hannah Lahey against Margaret Lahey, interpleaded by the Supreme Council of the Catholic Mutual Benefit Association. From a judgment of the Appellate Division (73 N. Y. Supp. 1138) affirming a judgment for defendant, plaintiff appeals. Affirmed.

Daniel V. Murphy and William L. Rumsey, for appellant.

P. F. King, for respondent.

MARTIN, J.

The Catholic Mutual Benefit Association is a domestic co-operative insurance company. Prior to the [174 N.Y. 148]7th of February, 1884, William Lahey became a member of a branch of the association located at Niagara Falls, which issued to him a beneficiary certificate entitling him to participate in its beneficiary fund to the amount of $2,000. The plaintiff, his wife, was designated as payee or beneficiary therein. During his life he or his wife complied with all the laws and regulations of the association, and at the time of his death, which occurred December 1, 1899, he was a member in good standing.

In June, 1898, the plaintiff separated from her husband, and refused to live with him. When she left him she took with her the certificate of insurance, and retained it until the month of November, 1899. A considerable time after their separation, her husband became ill, and went to live with his mother. He promised her if she would take care of him he would reimburse her by changing the policy for her benefit. She took care of him until the 12th of November, 1899. During that time he was afflicted with an illness which ultimately resulted in his death.

In September, 1899, the local lodge or association, learning of his condition, appointed a committee to look after him, sent a doctor, and left money to procure such articles as were necessary during his illness. On the 30th of October he made and executed the following instrument: ‘I, William Lahey, hereby certify that I am a member in good standing of Branch 2, C. M. B. A., located at Niagara Falls; was initiated therein on the 14th day of November, 1877, that the beneficiary certificate heretofore issued to me by said Association, which was payable to my wife, and no [now] revoke my former payment and want it payable; $1,000.00 payable to my wife, Hannah Lahey; $500.00 payable to my mother, Margaret Lahey; $500.00 payable to Ignatz Reiss, Treas. of Branch 2, C. M. B. A., for to pay doctor and funeral expenses, and the balance that is left to be turned over to my mother, Margaret Lahey. Dated Niagara Falls this 30th day of October, 1899. William Lahey. Witness, John J. Daw, Recording Secretary Branch No. 2. [Branch Seal.]’ By this instrument he sought to change the beneficiary in said certificate, making his wife a beneficiary to the extent of $1,000; his mother, $500; and Ignatius Reiss, treasurer of Branch No. 2, in the sum of $500, to pay his doctor's bills and funeral expenses, and any sum remaining to be turned over to his mother. This paper was attested by the recording secretary of that branch. Its seal was affixed pursuant to the constitution and by-laws. It was delivered to Edward Ryan, the grand secretary, and by him delivered to, received by, and filed in the office of, Joseph Cameron, the supreme recorder, with a request that a new beneficiary certificate in compliance with such paper should be issued. The association failed and neglected to issue such certificate, delaying the same upon the ground that the original certificate should be surrendered with the application for the change.

William Lahey thereupon demanded the certificate of the plaintiff, who refused to surrender it, but withheld the same, and prevented him from having or obtaining possession thereof, of which fact the secretary and supreme recorder had due notice, and therefore that he was unable to surrender it. The association thereupon notified him that it was powerless to issue a new certificate while the original was outstanding and not lost or destroyed; that the by-laws and constitution of the association provided no methed by which a beneficiary in a certificate could be changed where the original certificate was wrongfully withheld by the original beneficiary, and on that account he was unable to procure the possession thereof. The application of October 30th was made and delivered for the purpose and with the intention of changing the beneficiary in the original certificate. The member did all he was able, under the circumstances, to effectuate that purpose, and such new designation remained and was in full force and effect at the death of said Lahey.

On the 12th of November the plaintiff, against the protest of the defendant, induced her husband to go with her to her home, in the city of Buffalo, where he remained until his death. On the 27th of November, 1899, he made an affidavit, prepared by the plaintiff's attorney, in which he denied that he made or intended to make any change of his beneficiary, and stated that his mind for some weeks was defective. He also stated to certain persons while staying with the plaintiff that he had not changed the beneficiary in said certificate, and wanted his wife to have the benefit thereof. After his death, due proofs were furnished the association. The plaintiff claimed the whole of the fund by virtue of the original certificate issued to her husband, and the defendant Margaret Lahey made claim for her interest in said fund and for the interest of Ignatius Reiss under such second designation. The plaintiff then brought this action against the association to recover $2,000 on the certificate, and in March, 1900, the association obtained an order of interpleader, paid $1,000 to the plaintiff, and paid the remaining $1,000 into court to await the result of this action between the plaintiff and the defendant Margaret Lahey. The foregoing is a brief synopsis of the facts as found by the trial judge.

Upon these facts the court, as conclusions of law, held that William Lahey changed the beneficiaries in said insurance as provided in the instrument of October 30th, so that $1,000 thereof was payable to the plaintiff, $500 to Margaret Lahey, and $500 to Ignatius Reiss to pay expenses, and the balance to be turned over to his mother; that he did all the acts which were necessary under the law to effectuate such purpose; and that the defendant was entitled to a judgment providing that $500 should be paid to her, and $500 to Reiss, to be disposed of in the manner stated. This judgment was unanimously affirmed by the Appellate Division. 73 N. Y. Supp. 1138.

The insurance law relating to fraternal beneficiary societies, orders, or associations provides: ‘Membership in any such society, order or association shall give to the member the right at any time, upon the consent of such society, order or association, in the manner and form prescribed by its by-laws, to make a change in its payee or payees, beneficiary or beneficiaries, without requiring the consent of such payees or beneficiaries.’ Laws 1892, p. 2025, c. 690, § 238. The by-laws of the Catholic Mutual Benefit Association, in force from 1887 to October, 1900, provide: ‘A member may at any time change, alter or amend the designation of person or persons to whom the beneficiary named in his certificate is payable, by surrendering said certificate, after having filled or caused to be filled, the blank which shall be provided for that purpose on the back of the same, providing for a new designation, and attach his signature to it. The Secretary of his Branch shall attach his signature to it as witness, and the Seal of his Branch, and forward it to the Grand Secretary, if in his immediate jurisdiction. Upon the receipt of the same by the Supreme Recorder, he shall issue a new certificate in accordance with such change of designation.’ A member whose certificate has been lost or destroyed may have a new certificate issued to him by filing an affidavit with the Supreme Recorder that the beneficiary certificate heretofore issued to him has been lost or destroyed, and that he applies for a duplicate of the same; the price to be charged for such new certificate to be fixed by the Supreme Trustees.'

The proof disclosed that there was in the constitution or by-laws of the association nothing relating to the issuing of a certificate where it had been withheld, and that there were no other provisions relating to the subject of changing designations on certificates lost or withheld. The officers of the association refused to make the change requested, upon the ground that before such change could be made the certificate must be surrendered; and they refused to issue a new certificate for the reason that there was no provision, either by statute or by-law, by which they were authorized to do so unless the original certificate was lost or destroyed. The dues of the assured were paid by the plaintiff for the last nine or ten years of Lahey's life. Indeed, there is proof tending to show that he, as well as his mother and other members of his family, was surprised when they found that the insurance had been kept alive by payments made by her. In determining the rights of the parties in this case, the statute, the constitution and by-laws of the association, with the policy or certificate, taken together, constitute the contract between them, and the standard by which their rights and liabilities are to be determined Matter of E. R. F. L. Ass'n, 131 N. Y. 354, 369,30 N. E. 114;People ex rel. Attorney General v. L. & R. Ass'n, 150 N. Y. 94, 108,45 N. E. 8.

This court has recently held that a member of such an association, who has the absolute power to change the beneficiary designated in his certificate by complying with a by-law which is exclusive upon the subject, and provides that a new certificate shall be issued if a member asks for one, but upon condition that he pay the sum of 25...