
    Sarah Shipman, Respondent, v. The Protected Home Circle, Appellant.
    1. Insurance — When By-laws oe a Go-operative Life Insurance Corporation Are Retroactive. Under an express agreement by a member of a mutual benefit association to comply with ‘1 all the laws, rules, regulations and requirements now in force or that may be hereafter enacted,” by-laws thereafter regularly adopted become retrospective as well as prospective la their operation except as to rights which have become fixed or vested by the terms of the original contract.
    
      2. Suicide oe Insured while Insane—Insurer Liable upon Death Therefrom, unless Expressly Excepted prom the Risk. Where the contract is silent upon the subject of self-destruction by the insured while insane, death from that cause is clearly within its terms, and having acquired a fixed and vested right to insurance covering that risk, no subsequent amendment of the by-laws can affect that right without the express consent of the insured.
    3. Effect of Finding that the Insured Committed Suicide. An unqualified finding that the insured committed suicide is, under the statute which defines suicide as the intentional taking of one’s own life (Penal Code, § 172), a determination that it was the intentional act of a sane man.
    4. Suicide of Insured while Sane — Effect of By-law, Enacted After the Issuing of Certificate of Insurance, Declaring Certificate Void if Insured Shall “Die by Suicide, Felonious or Otherwise.” Where the contract is silent upon the subject of the suicide of a member while sane, a by-law subsequently enacted providing that the certificate issued to him shall become void “incase he shall die by suicide, felonious or otherwise, sane or insane, or bjr his own hand, sane or insane, provided that in such case there shall be refunded to the beneficiary named in said certificate the amount of all payments made, together with interest thereon at the rate of three per cent per annum,” applies to a certificate in force at the time of the amendment, issued to a member who thereafter commits suicide while he is sane, first, because it invades no vested right, and, second, it is a fundamental though unexpressed part of the original contract that the insured shall not cause his own death.
    5. Effect of Stipulation that, if Death of Insured Be Caused by any Illegal Act of his Own, his Rights under the Certificate Shall Revert to the Association. Where, however, the contract is not silent, but the insured expressly stipulates that in case his death shall be caused by any illegal act of his own, all his right, title and interest in the beneficiary fund shall revert to the association, and he thereafter commits suicide, which under the common law was a crime and under the Penal Code (§ 173) is “ a grave public wrong,” and to say the least must be regarded as an illegal act within the purview of the language of the contract, the contract is rendered nugatory by force of its own provisions.
    6. Rights of Beneficiary, under Certificate of Co-operative Insurance Association, in Case of Suicide of Insured. Assuming that there is no provision either in the by-laws or the contract relating to suicide by the insured while sane, unless the intention of the association to incur such risk is clearly and unequivocally expressed, such act will forfeit the certificate, although the beneficiary named therein takes the insurance money directly by the terms of the contract and not derivatively, as in the capacity of heir or legal representative of the suicide, because in co-operative or assessment life insurance the beneficiary has no such vested rights as are acquired under ordinary life insurance policies issued for the benefit of third persons, which cannot be defeated by the subsequent acts of the insured; but on the contrary the beneficiary takes the certificate subject to change without his consent in accordance with the constitution and by-laws of the association and has no vested interest in either the certificate or the money to be paid upon it. It follows, therefore, that the beneficiary under a certificate issued by a mutual benefit association, who takes his rights through the insured and subject to the terms of the contract entered into by him, can no more benefit by the wrong of the insured in willfully and intentionally taking his own life than the legal representatives of the insured in an ordinary life insurance policy could under the same conditions.
    
      Shipman v. Protected Home Giróle, 66 App. Div. 448, modified.
    (Argued March 3, 1903;
    decided April 9, 1903.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered November 25, 1901, affirming a judgment in favor of plaintiff entered upon a decision of the court at a Trial Term without a jury.
    The nature of the action and the facts, so far as material, are stated in the opinion.
    
      AdeTbert Moot, A. W. Williams, A. A. Van Busen and W. G. Martin for appellant.
    The amendment as to suicide adopted by the defendant association is within the power to amend, is reasonable and applied to William N. Shipman at the time of his death. (S. M. B. Society v. Burford, 70 Penn. St. 321 ; Supreme Tent v. Hammer, 81 Ill. App. 560 ; Bigelow v. B. L. Ins. Co., 93 U. S. 284 ; De Gogorza v. K. L. Ins. Co., 65 N. Y. 232 ; 3 Am. & Eng. Ency. of Law [2d ed.], 1064 ; Supreme Commandery v. Ainsworth, 71 Ala. 436 ; Supreme Lodge K. O. P. v. La Malta, 95 Tenn. 157 ; Hughes v. W. O. F. M. L. Ins. Co., 98 Wis. 292 ; State ex rel. v. G. L. A. O. U. W., 70 Mo. App. 456 ; Daughtry v. K. O. P., 48 La. Ann. 1203.) The amendment complained of is in no sense retroactive, neither is it subversive of any vested right. (Bacon on Ben. Societies, 91a ; Poultney v. Bachman, 31 Hun, 49 ; Sanger v. Rothschild, 123 N. Y. 579 ; Brown v. C. M. B. Assn., 33 Hun, 263 ; Boasberg v. Cronan, 30 N. Y. S. R. 483 ; S. P. M. Soc. v. Mac Vey, 92 Penn. St. 510 ; Stohr v. S. F. M. F. Assn., 82 Cal. 557 ; Wist v. Grand Lodge, 22 Oreg. 271 ; Supreme Tent v. 
      Hammer, 81 Ill. App. 560 ; Supreme Commandery v. Ainsworth, 71 Ala. 436 ; De Gogorza v. K. L. Ins. Co., 65 N. Y. 232.) The agreement as found in the record in this case existing between Mr. Shipman and the defendant fixes and determines the rights and liabilities of the parties to this action. It is free from ambiguity, doubt or uncertainty, and, therefore, it is its own interpreter. (Allen v. G. A. Ins. Co., 123 N. Y. 6, 12 ; Clark v. Fey, 121 N. Y. 470 ; Tobias v. Lissberger, 105 N. Y. 404 ; Norrington v. Wright, 115 U. S. 188 ; Hill v. Blake, 97 N. Y. 220 ; Dwight v. G. L. Ins. Co., 103 N. Y. 347 ; Bank of Montreal v. Recknagle, 109 N. Y. 490, 491 ; Lake v. McElfatrick, 139 N. Y. 357.) The trial court having found that the deceased “ committed suicide,” and undisputed evidence showing he was sane at the time, even if the application for insurance, the policy of insurance, and constitution of defendant did not show that the consideration tfor the insurance of deceased was that he should comply with defendant’s rules and regulations as amended, and continue paying assessments, and do no illegal act, still the suicide of .deceased is fatal to any claim for insurance on his life. ( Van Zandt v. Ins. Co., 55 N. Y. 169 ; Bigelow v. Ins. Co., 93 U. S. 284 ; Ritter v. Ins. Co., 169 U. S. 139 ; McClure v. M. L. Ins. Co., 55 N. Y. 169 ; Weed v. M. B. L. I. Co., 70 N. Y. 562 ; Breasted v. F. L. & T. Co., 4 Hill, 75.)
    
      George J. Dikeman for respondent.
    The plaintiff was not bound by any act of William H. Shipman after the policy was issued unless such act was inhibited by the express terms of the contract as first made. (Supreme Lodge v. La Malta, 95 Tenn. 157 ; Becker v. B. B. Society, 144 Penn. St. 232 ; Parish v. N. Y. P. Exch., 169 N. Y. 34 ; Weber v. Supreme Tent K. O. T. M., 172 N. Y. 490 ; Roberts v. Grand Lodge A. O. U. W., 173 N. Y. 580 ; Deuble v. Grand Lodge, 66 App. Div. 323 ; Weiler v. Equitable Aid Union, 92 Hun, 277 ; McNeil v. S. T. M. Relief, 40 App. Div. 581 ; F. L. & T. Co. v. Aberle, 19 App. Div. 79 ; Englehardt 
      v. F. W. L. Assn., 148 N. Y. 281.) The point which is now said to be the deeper question in this case to the effect that even assuming that the by-laws as amended did not, apply to this plaintiff, nevertheless, the defendant should have succeeded, for the reason that William 27. Shipman committed suicide, cannot at this time avail the defendant and appellant. (Snead v. Bonnoil, 166 N. Y. 325 ; Post v. M. Ry. Co., 125 N. Y. 697 ; Lewis v. N. Y., L. E. & W. R. R. Co., 123 N. Y. 496 ; Varian v. Johnston, 108 N. Y. 645 ; Mayor, etc., v. N. Y. R. Co., 146 N. Y. 210 ; Werner v. City of Rochester, 149 N. Y. 563 ; Moffat v. Fulton, 132 N. Y. 507 ; Toplitz v. Bauer, 161 N. Y. 325 ; Quinlan v. Welch, 141 N. Y. 158 ; Dodge v. Cornelius, 168 N. Y. 242.) Death by suicide is no defense to a policy of life insurance, payable to a beneficiary who does nothing towards the consummation of the act, and who does not derive title in any manner through the suicide, unless it is expressly stated in the contract of insurance that such risk is not assumed. (Darrow v. F. F. Society, 116 N. Y. 537 ; May on Insurance, §§ 323, 324 ; A. Society v. Bolland, 4 Bligh, 194 ; Breasted v. F. L. & T. Co., 8 N. Y. 299 ; Borradaile v. Hunter, 5 M. & G. 639 ; Clift v. Schwabe, 3 C. B. 437 ; Bradley v. M. B. L. Ins. Co., 45 N. Y. 422 ; Van Zandt v. M. B. L. Ins. Co., 55 N. Y. 169 ; Hunter Case, 5 M. & G. 639 ; Kelley v. M. L. Ins. Co., 109 Fed. Rep. 56 ; Smith v. N. B. Society, 123 N. Y. 85.)
   Werner, J.

The defendant is a co-operative life insurance corporation, organized under the laws of Pennsylvania and doing business in this state. The plaintiff is the designated beneficiary in a certificate issued to her husband by the defendant in March, 1897, for the sum of twenty-five hundred dollars, payable to the plaintiff upon the death of her husband. The latter came to his death by suicide in April, 1900, in the state of Pennsylvania. When the benefit certificate was issued neither it nor the by-laws of the défendant contained any provision against suicide, but in May, 1897, the by-laws were amended by adding thereto a section which reads as follows:

“ The benefit certificate issued to a member shall become void and all benefits thereunder shall be forfeited in case the insured shall die by suicide, felonious or otherwise, sane or insane, or by his own hand, sane or insa/ne ; provided that in such case there shall be refunded to the beneficiary named i/n said'certificate, the amount of all payments made, together with interest thereon at the rate of three per cent per annum.”

The application, signed by plaintiff’s husband, upon which the benefit certificate herein was issued, contained the following stipulation : “ I do hereby agree that compliance on my part with all the laws, rules, regulations and requirements now in force or that may hereafter be enacted by the association is the express condition upon which I am entitled to participate in the beneficiary fund, and to the amount named in the constitution and laws of the association. I further agree that should my death be caused by or through intemperance, or any illegal act of my own, all my right, title and interest in the beneficiary fund shall revert to the association.”

When the plaintiff, after her husband’s death, demanded payment of the amount specified in the certificate it was refused by the defendant upon the ground that by committing suicide the insured had forfeited all rights which he or his beneficiary might otherwise have had under the certificate of insurance. Thereupon this action was brought. At trial court it was held that the amended by-law above quoted was valid, but was not intended to apply to outstand" ing beneficiary certificates and it was upon this theory that plaintiff was permitted to recover. The judgment entered upon this decision was affirmed at the Appellate Division without written opinion. Upon this appeal the correctness of this judgment is challenged by the defendant upon several grounds. 1. It is contended that under the amended by-law referred to, the suicide of the insured worked a forfeiture of all benefits provided for in the contract. It is urged that even if the amended by-law is not valid in its entirety, it is binding in the case at bar. 3. It is claimed that if the amended by-law had never been enacted the plaintiff would not be entitled to recover under the facts of this case.. We will briefly consider these points in the order in which they have been stated.

The plaintiff’s husband, as we have seen, became a member of the defendant in March, 1897. The amended by-law under discussion was adopted in May, 1897. In the absence of a finding to the contrary, we must assume that its enactment was regular and in accordance with the provisions of defendant’s constitution. By the express terms of the contract between the plaintiff’s husband and the defendant the former agreed to comply with “ all the laws, rules, regulations and requirements now in force or that may be hereafter enacted ” by the latter. Under these conditions all by-laws regularly adopted by the defendant became retrospective as well as prospective in their operation upon the plaintiff’s husband, except as to rights which had become fixed or vested by the terms of the original contract. In the original contract there was no mention of death by self-destruction or suicide of a member, whether sane or insane. As the death of a member might result from any one of a number of diseases or causes which were not specifically enumerated in the contract, so self-destruction might be the culmination of mental derangement superinduced by causes as uncontrollable as some forms of physical disease. When the death of an insured person is due to such a cause, the insurer is always liable to the beneficiary unless the particular cause is one which by the express terms of the contract is excepted from the risk. As the contract was silent upon the subject of self-destruction by the insured while insane, death from that cause was clearly within its terms. Upon the execution of the contract the insured, therefore, acquired a fixed and vested right to insurance covering that risk. Mo subsequent amendment of the by-laws could affect that right without the express assent of the insured. This doctrine has recently been reaffirmed by this court in Weber v. Supreme Tent of Knights of Maccabees (172 N. Y. 490), and, if we could here end the discussion of this case, upon the assumption that plaintiff’s husband was insane when he took his life, the Weber case would he a controlling authority in favor of this plaintiff’s right to recover.

But we cannot stop here. The learned trial court has found that the plaintiff’s husband committed suicide. There is no finding whether he was sane or insane. For colloquial purposes the term “ suicide ” is at once sufficiently specific and comprehensive to cover all kinds of human self-destruction; but if the law is to distinguish between the self-destruction of the insane and the self-inflicted death of the sane, insurance contracts must be construed in the light of definitions which express the distinction. Our Penal Code defines suicide as the intentional taking of one’s own life- (sec. 172) and the definitions referred to in Weber v. Maccabees (supra) are to the same effect. Intent is of the essence of the act and this presupposes reason or sanity. Thus the unqualified finding of the learned trial court that plaintiff’s husband committed suicide is in effect a determination that it was the intentional act of a sane man. Aside from this, however, there is the presumption of sanity which must be entertained in the absence of proof. Insanity cannot be predicated simply upon the act of self-destruction, for human experience has shown that sane men have taken their own lives. To the extent that the amended by-law provides for a forfeiture of contract rights in the event of suicide by the insured while he was sane, it is valid, first, because it invades no vested right of the insured and, second, because it is a fundamental, though unexpressed, part of the original contract that the insured should not intentionally cause his own death. If we assume, therefore, that the original contract and by-laws were silent upon the subject of suicide by the insured while sane, the amended by-law is valid because there can be no such thing as a vested right to commit suicide and for the further reason that it is nothing more than the written expression of a provision which the law had read into the contract at its inception.

But the original contract was not silent in this regard. In his application for insurance the plaintiff’s husband expressly stipulated that in case his death should be caused by any illegal act of his own, all-his right, title and interest in the beneficiary fund should revert to the association. At common law, suicide was a crime which was followed by the forfeiture of the offender’s property. In this state it is denominated “a grave public wrong” (Penal Code, .sec. 17.3), but owing to the impossibility of reaching the successful perpetrator, no forfeiture is imposed. Plaintiff’s husband came to his death in Pennsylvania. In the absence of evidence upon the subject it is to be presumed that the common law prevails there. This view of the case leads to the conclusion that in committing suicide the plaintiff’s husband was guilty of a crime, and all crime is illegal. It is, to say the least, doubtful whether the rule of the common law, declaring suicide to be malum, in se, has been abrogated by the provisions of our Penal Code; but whether we invoke the stern morality of the common law, or the more merciful decree of our own statute which declares suicide to be. a “ grave public wrong,” it may fairly be called an illegal act within the purview of the language of the contract herein, and, if so, the contract is rendered nugatory by force of its own provisions.

Although the foregoing conclusions are decisive of the case, we think the third defense above referred to presents a question that is fairly raised and that ought to be decided for the benefit of all concerned in contracts of this kind. What are the plaintiff’s rights, if we treat the case as one in which there is no provision, either in the by-laws or. the contract, relating to suicide by the insured while sane? We have already suggested that it is an inherent and fundamental part of every such contract that the insured shall not intentionally take his own life. Ho act so contrary to good morals and the usual course of human nature- should be held' to be within the contemplation of the parties to a contract for life insurance, unless it is clearly and unequivocally expressed. The learned counsel for the plaintiff admits the force of the argument as applied to cases in which the estate of the suicide is enhanced by his own wrong, but he insists that it has no application to eases in which the beneficiary named in the policy or certificate takes the insurance money directly by the terms of the contract and not derivatively ,as, for instance, in the capacity of heir or legal representative of the suicide. It is argued that in the latter case those who take the suicide’s estate by mere operation of law are no more entitled to enjoy the fruits of his wrong than he himself would be entitled to profit by his own wrong if living; but that a different principle applies where the beneficiary has a vested interest in the contract from the instant that it is entered into for his benefit. That is precisely the difference between the contract in the case at bar and an ordinary insurance policy payable directly to a named beneficiary. Under chapter 80 of the Laws of 1840, and the acts amendatory thereof, a wife has an insurable interest in her husband’s life which may be made the subject of a contract either directly between the wife and the insurer; or between the latter and the husband for the benefit of his wife. Where such insurance is effected by the husband lie is held to be the agent of the wife, and the latter acquires a vested interest in the policy at the moment of its delivery to the insured. (Whitehead v. New York Life Ins. Co., 102 N. Y. 143 ; Holmes v. Gilman, 138 N. Y. 382.)

It is undoubtedly true that in the ease of a contract valid at its inception such vested rights cannot be affected or impaired by the subsequent fraud or wrong of the insured. But what are the vested rights of a beneficiary under a certificate like the one held by the plaintiff herein % The argument in her behalf proceeds upon the theory that there is a strict analogy between regular life insurance and co-operative or assessment life insurance, and this is where we think the inherent weakness of plaintiff’s case becomes apparent. Under the ordinary life insurance policy taken out by the insured for the benefit of a third person, or by a third person for his own benefit on the life of the insured, the beneficiary takes a vested interest in the policy and the fund payable thereon, from the moment that the policy is delivered. His rights when once thus vested cannot be defeated by the subsequent acts of the assured. The assured has no power of disposition over the same without the consent of the beneficiary and, upon the death of the insured, neither his personal representatives nor his creditors- have any interest in the proceeds of such a contract. The principle governing such a contract is well stated by Chief Justice Fullee in Washington Central Bank v. Hume (128 U. S. 195, 206) as follows: “It is indeed the general rule that a policy, and the money to become due under it, belong, the moment it is issued, to the person or persons named in it as the beneficiary or beneficiaries, and that there is no power in the person procuring the insurance by any act of his, by deed or by will, to transfer to any other person the interest of the person named.” This was the principle' enunciated in Pingrey v. Nat. Life Ins. Co. (144 Mass. 374) where the insured had taken out an endowment policy, payable to his mother in case of his death before the endowment should accrue. The insured subsequently married, surrendered his policy and took out a new one payable to his wife. It was there held that notwithstanding his attempt to vest the proceeds of the policy in his wife, the mother was entitled thereto. (See, also, Barry v. Brune, 71 N. Y. 261.) This principle has been applied to cases where the assured intentionally took his life by his own hands. (Fitch v. Am. Pop. L. Ins. Co., 59 N. Y. 557 ; Morris v. S. M. Life Assurance Co., 183 Pa. St. 563 ; Seiler v. Economic L. Assn., 105 Iowa, 87.)

-Where, however, the policy is taken out for the benefit of the insured himself or his estate, the principle does not apply in case he intentionally takes his own life. In such a case .the persons who take the proceeds of the policy take through the insured, and not under a contract made with them or for their benefit as in the cases above referred to. They, therefore, stand in the place of the insured and are bound by the same laws and limitations which would bind the insured through whom they take. As the insured could not take advantage of his own wrong, so those who represent him cannot be permitted to benefit by it. This is the rule laid down in Ritter v. Mut. Life Ins. Co. (169 U. S. 139) and applied in the following cases : Am. Soc. v. Bolland (4 Bligh, 194-211) ; Breasted v. Farmers’ L. & T. Co. (8 N. Y. 299) ; Borradaile v. Hunter (5 Man. & Gr. 639) ; Clift v. Schwabe (3 Com. B. 437) ; Bradley v. Mut. Ben. Life Ins. Co. (45 N. Y. 422) ; Smith v. Nat. Benefit Society (123 N. Y. 85).

A contract of insurance based upon membership in a - benefit society rests upon radically different legal principles than those which govern the ordinary life insurance policy. As stated by Bacon in his work on Benefit Societies (sec. 321), The chief difference between ordinary contracts of life insurance companies and those usual in benefit societies, is that in the former the policy and documents referred to in it contain the agreement, while in the latter the certificate, together with the charter and by-laws, are to be looked to for the contract.” This distinction is clearly emphasized in Sabin v. Phinney (134 N. Y. 428), where this court said: “The statute under which the corporation was organized, its by-laws, together with the application for and the certificate of membership, constituted the contract which existed between the member and the society, which instruments, construed together, measure the rights of these litigants. Any person who became an appointee in such a certificate took the position subject to the absolute right of the member to substitute a new one at any moment. The rights acquired by the member by virtue of this relation did not amount to a chose in action. He had no interest in the society that was assignable or transferable until some right of action had accrued. The appointee had no vested interest in the sum which might in a' contingency become payable on death of the member.” (Citing Hellenberg v. Dist. No. 1, I. O. of B. B. 94 N. Y. 580 ; Sanger v. Rothschild, 123 N. Y. 577 ; Brown v. Catholic Mut. B. Assn., 33 Hun, 263, and Boasberg v. Cronan, 30 N. Y. S. R. 483.)

So the plaintiff, as the beneficiary named in the certificate herein, took it subject to change in accordance with the con stitution and by-laws of the defendant, and, therefore, she. acquired no vested interest in either the certificate or the money to be paid upon it. The foregoing views as to the • effect of such a contract as the one at bar do not depend wholly upon the authority of the reported cases, for the statute itself (Ins. Law, sec. 238) provides in express terms that a member of a benefit society lias the right to change the beneficiary named in the certificate without the consent of a previously named beneficiary. Plaintiff’s rights were subject to revocation ; they could be affected by the acts of her husband; they were dependent upon the limitations of „ the contract by which her husband was bound and, in short, were no greater than those of the husband’s personal representatives would have been in an ordinary contract of insurance wherein they might have been named as beneficiaries. It must follow that a beneficiary under a certificate issued by a benefit association, who takes his rights through the insured and subject to the terms of the contract entered into by him, can no more benefit by the wrong of the insured in willfully and intentionally taking his, own life than the legal representatives of the insured in an ordinary life insurance policy could under the same conditions.

The case of Weber v. Supreme Tent of K. of M. (172 N. Y. 490) is not in conflict with this doctrine, for in that case there was a finding that the deceased member took his life while insane, and, as already pointed out, that was a risk which ivas included in his contract, and, therefore, his beneficiary was entitled to claim the fund. It must be admitted, however, that the views above expressed cannot he reconciled with the decision in Darrow v. Family Fund Socy. (116 N. Y. 537). In that case the particular phase of the question here discussed was not presented. There the discussion in respect to the effect of the suicide of the member rested upon the case of Fitch v. American Pop. L. Ins. Co. (59 N. Y. 557), but, as that was an ordinary life insurance contract, it was not an authority upon the facts of the Darrow case. To the extent, therefore, that there is a conflict between the Darrow case and the case at bar, we feel constrained to overrule the former.

We may add in conclusion that many cases in other jurisdictions are cited by the learned counsel for the plaintiff in support of the contention that under contracts of insurance valid in their inception, which contain no provision against suicide and are payable directly to nominated beneficiaries, the insurer is liable regardless of the, manner in which the insured came to his death. As above indicated, our decision is not at variance with those cases which are based upon ordinary contracts of insurance. Among the cases cited, however, there are some in which the courts of other states have gone to the extent of applying this principle to beneficiary certificates, like the one in the case at bar, and these cases we must decline to follow.

These views would require a reversal of the judgment herein but for the provision in the amended by-law referred to, which entitles the plaintiff to have refunded to her all payments made upon the certificate, together with interest thereon at the rate of three per, cent per annum.

Under this provision we will modify the judgment by deducting therefrom the excess over such payments and interest as stated, and, as tlius modified, affirm the same, without costs to either party in this court.

Pabkeb, Ch. J., Gray, O’Brien, Cullen, JJ. (and Bartlett, J., in result), concur; Martin, J., not voting.

J udgment accordingly.  