
    Henry M. Black, Appellant, v. The Mutual Life Insurance Company of New York, Respondent.
    First Department,
    February 8, 1907.
    Insurance — change of beneficiary procured on forged documents — when assignee of insured not entitled to recover.
    In an action to recover upon two duplicate policies of life insurance; of which the plaintiff was assignee, it appeared that the policies were originally issued to the insured, payable to his wife, and in case of her death to her children; that the wife died, leaving one son surviving, and that thereafter the defendant insurance company issued a paid-up policy in place of one of the former policies, payable to the same beneficiaries; that thereafter the insured presented affidavits, verified by himself, stating that his safe ha"d been broken into and the policies stolen, and requesting the issue of duplicates, which statement that the policies were stolen was untrue, they being at the time in the possession of the son of the insured, who was the ultimate beneficiary.. .The defendant company issued duplicate policies oh receiving bonds of indemnity from , the insured and beneficiary, hut the signature of the latter was forged. Thereafter the insured applied to the plaintiff for a loan on the policies, and the plaintiff required that the beneficiary be changed so that the policies should ■ he payable to the insured or his estate, whereupon' the plaintiff and the insured presented tó the defendant company the duplicate policies, with instruments • purporting to be signed by the insured and the beneficiary, asking that the beneficiary be changed. The signature of the beneficiary, however, was a forgery. Relying upon such documents, the beneficiary was changed and the change indorsed upon the policies, whereupon the plaintiff, on behalf of a third person, loaned the insured money cm the policies and took an assignment thereof to the third person, as collateral security. The beneficiary, onrequiring the payment of dividends, was informed of the assignment by the insured, and he thereupon notified the defendant that he was the owner of the policies, and that the instruments purporting to be signed,by him were forgeries. The third person assigned his interest in the policies to the plaintiff, who had guaranteed the payment of the loan when it, was made. ■ Thereafter the insured died and the beneficiary recovered on the original policies in an action in another State:
    The plaintiff as assignee bringing action against the insurer on the duplicate policies, it was '
    
      Held, that a dismissal of the complaint was proper as the plaintiff when he took the assignment from the third person had information of the fraud and forgeries committed by the insured, and because- instead of recalling the loan and prosecuting the insured, he was instrumental in having the loan renewed'; ■ That the plaintiff as assignee was not .an innocent holder in good faith;
    That the defendant insurance company was not estopped by its-act in' changing the beneficiaries inasmuch as the change had been induced by the acts of the plaintiff; •
    That, as the insurer was not liable to the insured by reason of the fraud, it was not liable to the assignee of the insured.
    Appeal by the plaintiff, Henry M. Black, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York oh the 9th day of March, 1906, upon, tlié decision' of the court rendered after a tidal without a jury at the New York Trial Term.
    
      Alfred G. Reeves, for the appellant.
    
      Lawrence Godkin, for the respondent.
   McLaughlin, J.:

This action was brought to recover upon two duplicate policies of life insurance, of which plaintiff is the assignee. The material facts necessary to a disposition of the question presented, and concerning which there is no dispute, are as follows: In 1868 the defendant issued to J. Winslow Jones two policies of insurance upon his life in the sum of $10,000 each. The beneficiary named .in each policy was Addie E. Jones, wife of the insured, and in case of her death, her children. Addie E. Jones died in 1879, leaving her surviving the insured and one son, William Morthey Jones. In 1889 the defendant issued, in place of one of the policies, a paid-up policy for $5,330, payable to the same beneficiaries. Sometime in February, 1898, J. Winslow Jones presented to the insurance company two affidavits, verified by himself, which stated that his safe had been broken into and papers taken therefrom, including the two policies of insurance, .and that though he had made diligent effort to recover them, he had been unable to do so, and requested that duplicates be issued. The statement contained in the affidavits; to the effect that the insurance policies were lost, was untrue. They had not been lost, but had always remained in possession of W. Morthey Jones, the son of the assured and ultimate beneficiary. The defendant signified its willingness to issue duplicate policies on receiving two bonds of indemnity, signed by J. Winslow Jones and W. Morthey Joh.es, indemnifying it against any .and all loss sustained by reason of issuing said duplicates, ór by reason of any person claiming under the original policies, and on the 16th of April, 1898, two bonds were presented which purported' to be signed .by J. Winslow Jones and W. Morthey Jones. The- signatures, however, of W". Morthey J ones were forgeries. The defendant, in good faith, and relying upon the affidavits and the bonds of indemnity, issued the two duplicates, indorsing upon each the following statement:

“ New York, 16th April, 1898.

“ The following is as nearly as possible a copy of a policy which appears upon the books of the Company as being still in force.

“A. KLAMROTH,

“Asst. Secretary.”

A few days later, and prior to the 30th of June, 1898, J. Winslow Jones applied to tins plaintiff, through one P. W. Hall, for. a loan on the policies of insurance, and in the course of the negotiations it was suggested by the plaintiff that the beneficiaries under the policies be changed so as to have, the samé payable to the insured, or his executors, administrators or assigns, and for that purpose plaintiff prepared and forwarded to Hall certain documents for execution. On the 30th of June, 1898, the plaintiff, accompanied by J. Wins-low Jones and P. W. Hall, presented to the defendant the duplicate policies, together with two documents purporting to be signed by said J. Winslow Jones and W. Horthey Jones, which were in the nature of requests that the beneficiaries in the policies be changed to J." Wins-low Jones, his executors, administrators or assigns. The requests thus made were not signed by W. Horthey Jones, and in so far as his name appeared thereon, the same were forgeriés. The defendant, nevertheless, in good faith and relying upon the documents so presented, made the changes as requested and indorsed upon each policy a_ statement to that effect. On the thirtieth of July following, the plaintiff, on behalf of one J. F. Mackley, loaned to J. Winslow Jones the' sum of $7,000, having previously taken an assignment from J. Winslow Jones of said policies to said Mackley. as collateral security for the payment of such loan, which assignment was, a few days later, filed with the defendant. In May, 1899, W. Horthey Jones wrote the defendant, asking for the dividends on one of the policies, when he was notified by the defendant that both policies appeared upon its files to have been assigned to one J. F. Mackley. W. Horthey Jones immediately notified the defendant of.his ownership of the policies and that the documents on file, purporting to be signed by .him, were'forgeries. In April, 1901, the plaintiff applied, on behalf of J. Winslow J ones, to the defendant for a loan on the policies, to take the place of the Mackley loan, and he was then informed by it of the claim made by W. Horthey Jones. On the 10th of July, 1901, Mackley assigned his interest in the policies to this plaintiff, he having, when the loan was made, in consideration. of. $500, guaranteed payment of the same. J. Winslow Jones died on the 1st of August, 1901. Proper proofs of his death were duly served upon the defendant by the plaintiff and also by W. Horthey Jones, and payment demanded of the policies. In January,- 1902, an action was brought by W. Horthey Jones against the defendant, in the Superior Court, Hillsboro county, State of Hew Hampshire, upon the original policies, he claiming as beneficiary thereunder. The action was tried and resulted in a judgmen* in favor of the plaintiff for the full amount of the policies. The plaintiff in this action was notified of the commencement of ' the action in Hew Hampshire, and also the time and place of trial. Subsequently this action was brought upon the duplicates. At the trial the complaint was dismissed and the plaintiff appeals.

I am of the opinion that the judgment is right and should be affirmed. This plaintiff took his assignment of the policies from Mackley ón the 10th of July, 1901, and in the preceding April he had information of the fraud and forgeries committed by J. Wins-low Jones. In June, instead of calling the loan and prosecuting J. Winslow Jones, who was then living, he was instrumental in having the loan renewed. J. Winslow Jones, it will be remembered, did not die until August 1, 1901. The plaintiff, therefore, is not in a position to claim -that when he took the assignment of the policies in question he was an innocent party or that he took them in good faith. He attempts to meet 'this suggestion, however, by asserting that he guaranteed the loan to Mackley before he acquired this information, and for that reason he is entitled to stand in Mackley’s shoes. But all the frauds and forgeries connected with the policies under which plaintiff claims, or at least that portion which resulted in the change of beneficiaries, were initiated by the plaintiff himself, in order to satisfy or protect his assignor, Mackley. It was this plaintiff who insisted that the change in name of the beneficiary should be made. The written requests to change the names were prepared in the plaintiff’s office, upon forms procured by him from the insurance company, and were by him forwarded to Hall for execution, and after the same had been executed and returned to him the plaintiff “ examined the requests and remarked that they appeared satisfactory.” He then presented them to the insurance company and asked that the change in beneficiaries be made. It was made upon the written requests then presented. It was the plaintiff’s neglect or want of care as ranch, or more than the defendant’s, which enabled the fraud to be perpetrated. The plaintiff therbfore, is not in a position to insist that the defendant is estopped from questioning the validity of its own act in changing the beneficiaries, -inasmuch as he was the one who induced the insurance company to make the change.

But it is said the insurance company was notified by W. Horthey Jones, in May, 1899, of the fact of the frauds and forgeries, and it clid not notify the plaintiff until April,- 1901. But there was no obligation resting upon defendant to impart this knowledge to plaintiff. Plaintiff was the one who had procured defendant to make the changes, and it had a right, so far as he was concerned, to rely on what he did as being correct. No liability had then matured against the defendant, inasmuch as J. Winslow Jones was still alive, and,. therefore, it was under no obligation to impart information to any one concerning the policies.

It is clear that no liability was created against the defendant in favor of J. Winslow Jones, since the issuance of the duplicate poli eies and the change of beneficiaries were procured by his fraud and forgeries, and the company received no consideration for assuming any new liability, and, upon the facts here presented, I do not see how this plaintiff stands in any better position. than J. Winslow Jones would had he brought an action to recover.

Nor do I think, for reasons already suggested, that the plaintiff" is in a position to invoke the doctrine of estoppel. -When he presented the written requests to change the beneficiaries, he, in' effect, represented to the defendant that the signature of W. Noitliey Jones was genuine. The doctrine of equitable estoppel is based upon equity and justice, and is resorted to to conclude a party by his'acts and admissions only when, in good conscience and honest dealing, he ought not to be permitted to deny what he has said or done. ( Wilcox v. Howell, 44 N. Y. 398 ; Marden v. Dorthy, 160 id. 39 ; Lawrence v. American National Bank, 54 id. 432.)

Finally, it is said that under the rule that where one of two inno cent parties must suffer, he must bear the loss whose action enabled the wrong to be done. This rule is invoked upon the theory that the defendant, in issuing the duplicates and changing the beneficiaries,' enabled J. Winslow Jones to perpetrate a fraud upon plaintiff’s assignor. But this overlooks the fact that it was the act of J. Wins-low J ones, plaintiff’s original assignor, which enabled the fraud to be perpetrated, and plaintiff, by his connection with the original transaction, is in no better position, so far as enforcing the duplicate policies is concerned, than J. Winslow Jones would be, had he brought an action, for, as we have already seen, he could not enforce the claim.

- The defendant has paid the original policies and simply because it was induced by the plaintiff, representing the original assignor, -to issue duplicates upon the theory that the originals had "been lost, ’and to change the beneficiaries upon forgeries and fraudulent ’statements, it ought not to be compelled to again pay.

The judgment is right and should'be affirmed, with costs. •

■ Patterson, E. J., Houghton, Scott and Lambert, JJ., concurred. Judgment affirmed, with costs. Order filed.  