
    Thomas Francis McCormick, Appellant, v. The Supreme Council Catholic Benevolent Legion, Respondent.
    
      Interpleader — rival claimants under benefit certificates—certificates not negotiable paper ■—• surrender' to the company not necessa/ry upon a new certificate issued — fraud, — Laws 1885, chap. 175, § 18.
    Upon an application for an order of interpleader, it appeared that in 1885 the defendant issued a benefit certificate to John McCormick, payable upon his death to his wife, in which certificate he had a right given by statute to change the beneficiaries without their assent, unless the designation had been made in pursuance of some contract, or for value. In 1894 John McCormick substituted four of his children as the beneficiaries; subsequently he substituted six of his children, and in 1895 he made a further change, constituting the plaintiff the sole beneficiary.
    After his death, in 1896, the plaintiff brought this action upon the certificate, and thereupon the four children of John McCormick, named as beneficiaries in 1894, notified the defendant that they held and claimed under the certificate of that date (which had not been surrendered to the defendant by McCormick, wjio stated to the defendant that it had been lost or destroyed), alleging that any change in the beneficiaries had been procured by fraud. Thereupon the defendant applied for and obtained an order directing it to pay the money into court, and substituting the claimants under the certificate of 1894 as defendants in the action.
    
      Held, that the order of interpleader was properly granted;
    That, notwithstanding the fact that two certificates might be outstanding, but one insurance was effected and one set of premiums paid, and that, if the plaintiff had a right to recover upon his certificate, his rights upon such a recovery could not be defeated or impaired by the fact that the certificate of August, 1894, was left outstanding and unsurrendered;
    
    That the substituted defendants could only succeed by showing that the change in the beneficiaries was effected by fraud and undue influence, exercised by the plaintiff upon the insured, and that, if they succeeded in this contention, they would be entitled to recover in the action, whether the certificate of August, 1894, had been surrendered or not;
    That it was not necessary that the defendant should obtain a surrender of the first certificate before it issued another in its place, the certificates not being negotiable instruments, so as to be valid in the possession of a bona fide holder.
    Appeal by the plaintiff, Thomas Francis McCormick, from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the 11th day of May, 1896, granting the defendant’s application for an order of. interpleader.
    
      
      Asa W. Parker and C. D. Rust, for the appellant.
    
      McGuire, Low & Coombs and Henry P. Burr, for the respondent.
   Per Curiam :

In August, 1885, the defendant issued to one John McCormick a benefit certificate for the payment, upon his death, of the sum of $2,000 to his wife, Ann McCormick. On the 1st of August, 1894, on the application of the said John McCormick, the beneficiaries under said certificate were changed to four of his children. Thereafter, the beneficiaries were again changed to the six children of the said McCormick, and on the 15th day of November, 1895, the said certificate was again changed to Thomas F. McCormick, the plaintiff, as sole beneficiary. On the 10th day of February, 1896, John McCormick, the insured, died, a member in good standing of the defendant organization. Afterwards the plaintiff began this action to recover of the defendant the sum of $2,000, the amount of said benefit certificate. When the second change of beneficiaries was made, that from the four 'children of the deceased to his» six children, the certificate then outstanding was not surrendered to the defendant, the deceased making an affidavit that his original certificate had been lost or destroyed. After the death of John McCormick, the four children named as beneficiaries under the change of of August, 1894, notified the defendant that they still held the certificate of that date and claimed the insurance money due upon it, and asserted that any change in the beneficiaries was produced by Undue influence and fraud practiced upon the deceased.

Upon the presentation of this claim, the defendant applied for leave to pay the insurance money into court and substitute the claimants under the appointment of 1894 as defendants in its place. The claimants last named appear to have assented to the application. The plaintiff resisted it. The application was granted and from the order granting the application the plaintiff takes this appeal.

The plaintiff contends that the application should have been denied, because there is not the same debt to be litigated between the parties; that the liability to the plaintiff and that to the claimants may be different and distinct, because the parties hold different certificates,. and that the defendant may be liable to each, on account of the issue of such certificates. We think this claim unfounded. While there may be two papers or written instruments outstanding, there was but one insurance effected and but one set of premiums paid. The certificates issued are not negotiable instruments so as to be valid obligations of the defendant in the possession of Iona fide holders. It was, therefore, not necessary that the defendant should obtain surrender of the first written certificate before it issued another in its place. By the statute the insured member has the right to change the beneficiaries without their assent (Chap. 175, Laws of 1883, § 18), unless the designation has been made in pursuance of some contract or for value. (Smith v. The National Benefit Society, 123 N. Y. 85.)

In this case neither party claimed title to the insurance money, except as proceeding from the bounty of the deceased, and no notice was given to the defendant that any of the beneficiaries had acquired rights in the insurance which the insured could not divest by change of beneficiaries. But however this may be, the plaintiff seeks to recover on the certificate in which he is named as the beneficiary. If on that certificate he establishes a right to recover, such right cannot be defeated or unpaired by the fact that the prior certificate was left outstanding, unsurrendered.

If the claimants, under the instrument of August, 1894, have any right or equity to recover of the defendant on account of its suffering the certificate to remain outstanding, such right or equity cannot be used to defeat the plaintiff’s claim. The substituted defendants can succeed in this action only upon showing that the change in beneficiaries was effected by fraud and undue influence on the plaintiff’s part; and in such case they would be entitled to recover, whether the written certificate of August, 1894, had been surrendered, or left outstanding. The substituted claimants might have complained of the order of substitution, so far as it discharged the present defendant from liability to them. But it is very plain that by that substitution the plaintiff’s rights have not been affected or impaired.

The order appealed from should be affirmed, with ten dollars costs and disbursements.

All concurred.

Order affirmed, with ten dollars costs and disbursements.  