
    Estelle Rau Cohen, Respondent, v. John Hancock Mutual Life Insurance Company, Appellant, Impleaded with Mary Rau, Defendant.
    Second Department,
    December 10, 1909.
    Insurance—contract construed—payment to person paying premiums ' — when payment good as against beneficiary. ' .
    The" application for a life insurance policy named a daughter of the insured as beneficiary, but reserved a i'ight to change the beneficiary with the consent of the company. The policy itself named no beneficiary, but provided that the company would pay to the lepresentatives of the insured, or to the beneficiary unless settlement should be made as subsequently provided. The policy authorized the insurer to pay to any relative by blood or connection by marriage of the insured, or to any other person who in the j udgmént of the company was equitably entitled to payment by reason of haying incurred expense on behalf; of ,the insured for liis burial, or for any other purpose, the receipt of such person to be conclusive, as to payment, and to operate to discharge the policy. At a time when the premiums were in arrears, the insured remarried, delivering the policy to .his wife who paid the arrears and subsequent premiums up to the time of the death of the insured. Thereafter she delivered the policy, receipt book and proof of death to the insurer, who paid her the amount of the policy in good faith, the wife delivering the check to the undertaker who buried the insured in part payment of the.bill.
    
      Held, that the payment was good as against the beneficiary and that she was not entitled to recover of the insurer.
    Appeal by the defendant, the John Hancock Mutual Life Insurance Company, from a judgment of the Municipal Court of the city of Hew York, borough of Brooklyn, in favor of thé plaintiff, rendered on the 23d day of June, 1909, after a trial by the court without a jury.
    
      F. W. Buermeyer, for the appellant. - .
    
      Harry 8. Lucia, for the respondent.
   Miller, J.:

This action was brought by the plaintiff as beneficiary to recover the sum of $111 on a policy issued On the 8th day of November, 1899, by the defendant on the life of one Charles G. Bau, the plaintiff’s father. The policy provided: “ The John Hancock Mutual Life Insurance Company of Boston, Mass., in consideration of the payment of 15 cents, at Or before noon on Wednesday of each week, during the life of Charles G. Bau, the insured herein, agrees to pay unto his or her executors or administrators or to the beneficiary hereunder, unless settlement shall be made as hereinafter provided, within twenty-four hours after satisfactory proof of death of the insured, the amount named in the schedule below, subject to these conditions and provisions: The company may pay claim under this policy to any relative by blood, or connection by marriage of the insured, or to any other person in the judgment of said company equitably entitled to the same by reason of having incurred expense in any way on behalf of the insured for his burial, or for any other purpose, and the receipt of any of such persons shall be conclusive evidence that such sum has been properly paid, and discharge the company from liability under this policy.” No beneficiary was named in the policy, but the plaintiff was named as beneficiary in the application which also contained this provision : “The right is also reserved to change the beneficiary from time to time, with the consent of the company, by written notice to said company, but payment upon presentation of the policy and premium receipt book, shall be a discharge to the company.” The insured married again in 1900. The premiums on the policy were then in arrears. The policy and the receipt book were then ■ turned over to the wife of the insured, the defendant Mary Báu, who paid the arrears and the premiums down to the time of the death of the insured in January, 1909. Hpon his death she delivered the receipt book and tlíé policy-and'proof :of death to the defendant, who in good faith paid her the amoun t of the policy by a check which was indorsed by her and delivered to the undertaker, who buried the deceased, in part payment of his bill.

The plaintiff claims that she has. a vested interest in the policy and that the defendant is not protected by payment even in good faith under the optional clause of the policy. Ho. case is' cited, however, which decides that proposition, and the discussion in all the cases'cited is aside the point. It was held in this court in this department that an administrator could not maintain an action on a somewhat similar policy' where a beneficiary was' named in the policy, but that is far from holding that the naming of a beneficiary prevents the insurer from exercising an option plainly, expressed in the' policy. (Ruoff v. John Hancock Mutual Life Ins. Co., 86 App. Div. 447.) It will be noted that the policy provides for payment to the beneficiary ■“ unless settlement shall be made as hereinafter provided.” How in this case the company exercised • the option to pay to one' of the class mentioned in the 'optional clause, 'i. e., the widow, for a purpose expressly mentioned in said clause to' wit, the payment of funeral expenses. ' It seems to me that the meaning of this contract is plain, and that the defendant has paid exactly in accordance with its terms and should not be compelled to ' pay again. Of course, an optional clause does not enable the company entirely to'escape making payment (Wokal v. Belsky, 53 App. Div. 167); where the beneficiary is named, it does not enable "an administrator to recover simply because the first to bring suit (Ruoff v. John Hancock Mutual Life Ins. Co., supra); it does not enable the company to defeat the claim of the beneficiary by exércising its option in bad faith. (Shea v. United States Industrial Ins. Co., 23 App. Div. 53.) But no such questions are involved in this'case.' The plaintiff cannot recover contrary to the plain provisions of the contract by asserting that, as beneficiary, she has a vested interest in the policy. It seems to me that Jier interest was plainly contingent. She was to be paid unless payment was made to some one else according to the terms of the contract ;■ but whatever interest she had it was .expressly made subject to the option of the company to make the payment which it has made. Only one case has been called to our attention which seems to be exactly in point. (Metropolitan Life Ins. Co. v. Schaffer, 50 N. J. L. 72.) That case decided that a payment in strict accordance with the terms of the policy discharged the company from liability. It seems to me that that proposition requires no argument to support it, and it cannot be denied that the defendant has paid in strict accordance with the terms of the contract.

The judgment should be reversed.

Woodward, Jenks, Burr and Rich, JJ., concurred.

Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.  