
    Nettie Webster, Respondent, v. Stella Maria Welch, Appellant, Impleaded with The Supreme Council of Royal Templars of Temperance.
    
      Certificate issued-by a mutual benefit insurance corporation—when the beneficiary acquires a vested right therein-—when an oral agreement estops another claimant from claiming an interest therein. ■
    
    A member of two mutual benefit insurance corporations placed both of his Certificates of membership in the hands of his daughter Nettie, who retained, the cus- ■ tody thereof and herself paid all the assessments thereon with the knowledge and approval of her father until the death of her mother, who was the beneficiary named therein. After the death of the mother Nettie and her sister ■ Stella had a conversation in the presence of their father and orally agreed, with the assent of their father, that Nettie should have one of such certificates and that Stella - should have the other certificate and should care for her father ■ during his life. This agreement was consummated by the surrender of the old certificates and the issue of new ones, each daughter being named as the sole beneficiary in one of the new certificates.
    Subsequently the father demanded possession of the certificate held by Nettie for the purpose of making the two daughters equal beneficiaries therein. This demand being refused, he presented an affidavit to the corporation which issued the same, representing such certificate to have been lost, and procured a new certificate in which both his daughters were named as equal beneficiaries. Thereafter he surrendered the last-mentioned certificate and procured another one in which the daughter Stella was made the sole beneficiary.
    The corporation had notice of Nettie’s adverse interest before it issued the two last-mentioned certificates.
    
      Held, that the daughter Nettie acquired a vested interest in the certificate issued to her in pursuance of the paroi agreement, and that Stella was estopped from claiming any interest therein.
    Appeal by the defendant, Stella Maria Welch, from a judgment of the Supreme Court in favor of tlie plaintiff, entered in the office of the clerk of the county of Erie on the 6th day of November, 1899, upon the decision of the court after a trial at the Erie Special Term.
    
      Albert O. Thorne and A. C. Harwich, for the appellant.
    ■ Edward P. Field and Frank R. Perkins, for the respondent.
   Williams, J.:

The action, as it was tried, was to determine the rights of appellant and respondent in a fund in the hands ■ of the Supreme Council of Royal Templars of Temperance (a mutual benefit insurance corporation). The action was brought to recover of the corporation the fund alleged to be due and owing from the corporation upon a certificate held by one Thomas Thompson, as a member, at the time of his death. The appellant was made a party defendant, because she claimed to be the real beneficiary and entitled to the fund, instead of the plaintiff, respondent.

The corporation did not answer. It acknowledged its liability to • pay the fund to the real beneficiary, and had no interest in the question as to which of the parties was entitled to the fund.

The trial court decided that the plaintiff was entitled to the fund. The defendant, appellant, claims that that decision was wrong, and this is the question we are to review. The appellant and respondent are sisters and were the daughters of the deceased member, Thomas Thompson, and of his wife, Mercy A. Thompson,

The deceased became a member of the defendant corporation December 24, 1879, the certificate being for $2,000, and his wife being the beneficiary then named therein. He also, in January, 1879, became a member of the Ancient Order of Dnited Workmen (another mutual benefit insurance corporation), the certificate being for $2,000 and liis wife being also the beneficiary then named therein. Both these certificates were placed in the hands of the respondent at the time they were issued, and she retained the custody and control thereof until the death of the beneficiary, Mercy A. Thompson, on the 23d of March, 1896, and paid all the assessments thereon until that time, being on the former $355.70 and on the latter $3 88.10. The deceased had knowledge during all this time that the respondent had the certificates and was paying the assessments and consented thereto and approved thereof. After the death of the beneficiary named in the certificates the two sisters, in the presence of the deceased, their father, had a talk and agreed, by paroi, with the assent of the deceased, to the disposition of the two certificates, that is, that the appellant should have the United Workmen certificate and the benefit of all the payments theretofore made thereon by the respondent, $388.10, and that a new certificate should be issued, naming her as the sole beneficiary thereunder, and that she should care for her father, the deceased, during his life, and that the respondent should release all her interest in that certificate, and that the respondent should have the Royal Templars certificate and the benefit of all the payments theretofore made thereon by her, and a new certificate should be issued, naming her as the sole benefipiary. thereunder, and appellant should release all interest, if any she had, in that, certificate. This agreement was carried out by the parties. The old certificates were surrendered and new ones were issued, making the new beneficiaries, as agreed. These changes were made in 1896, soon after the death of the wife and mother. The deceased lived with the appellant thereafter until his death, which took place January 29, 1899, and the appellant, after the death of her father, received the full amount payable on the United Workmen certificate, which she took. March 26, 1897, the deceased, through, an attorney, called upon the respondent for the Royal Templar certificate, notifying her-that he wanted to. make a change so that the appellant' and respondent should be the beneficiaries therein, sharing equally. The respondent refused to deliver the certificate. Thereafter, and on April 1, 1897, the deceased presented an affidavit to the Royal Templars corporation, representing the certificate held by the respondent as-lost and procured, a new certificate dated April 5, 1897, making the appellant and respondent both beneficiaries, sharing equally, and later, May 18, 1897, this last certificate was surrendered and another one procured, being dated May 21,1897, making the appellant the sole beneficiary. This certificate the appellant had at the death of the deceased, and the respondent retained and had at the death the certificate issued in January, 1896, in which she was named as the sole beneficiary. The defendant corporation paid to the deceased during his lifetime, in August, 1897, $100, and in February, 1898, $100, and in August, 1898, $100, all of which $300 was received by the appellant and used by her in providing for deceased who lived with her. The defendant corporation was notified by respondent of her possession and interest in the certificate of June, 1896, in which she -was" named as sole beneficiary before it issued the certificates of April and May, 1897, to the appellant.

The trial court found the facts herein stated upon adequate evidence, and further found that the deceased procured the two certificates to be issued in 1897, and the defendant corporation issued such certificates with the fraudulent purpose and intent of "cheating and defrauding the respondent of her rights and interests in the certificate held by her issued in 1896, .and that the appellant received -such certificates with the like purpose and intent. And then, upon the facts so found, the trial court decided as matter of law that the two certificates issued in 1897, in which appellant was named first as joint beneficiary- with respondent, and then as sole beneficiary, "were void; that the certificate issued in 1896, wherein the respondent was sole beneficiary, was and always remained valid and subsisting, and that she was entitled to recover the whole fund thereunder -and costs against the appellant.

There is authority for the proposition that the respondent acquired •a vested interest in the certificate which she held, and that she could not be deprived of that interest by her sister or her father.

In Smith v. National Benefit Society (123 N. Y. 87) it was held "that the provision of section 18, chapter 175, Laws of 1883, providing for the incorporation of co-operative life insurance societies, which •declares that membership in such society gives the member the right to make a change in his beneficiary without the consent of "the latter, applied only when, the original designation is in the nature of an inchoate or unexecuted gift and does not prevent a contract between the member and his beneficiary by which a vested right passes to the latter, and in such case without his consent the beneficiary may not be changed. Same doctrine was laid down under Laws of 1889 (Chap. 520, § 12) in Maynard v. Vanderwerker (30 Abb. N. C. 134).

In Conselyea v. Supreme Council (3 App. Div. 464; affd. without opinion, 157 N. Y. 719) it was held the wife of a member who, under an agreement of separation, had acquired the benefit of a •certificate, upon her promise to pay future assessments, which she paid, thereby acquired a vested interest in the certificate of which ber husband could not divest her. The question arose there by reason of the claim that the husband had, before his death and after the agreement of separation, resigned his membership, failed to pay assessments, and had, therefore, ceased to be a member and the certificate" had become inoperative. The wife was the original beneficiary, and the court said, among other things: Our conclusion, therefore, is, that the certificate having passed into the possession of •the plaintiff, and the title thereto having vested in her for value, and she having thereafter paid the assessments to the defendant, who, through its subordinate council, had knowledge of these facts, it-could not * * * permit the husband,, through spite and malice, fraudulently to deprive her of the rights in and to the certificate: which she had thus secured.”

But beyond this, we see no reason why the principle of estoppel is not applicable here, depriving the appellant of the right to question the respondent’s interest in the certificate held by her, and to set up an interest in herself as the sole beneficiary under the certificate. In Kimball v. Lester (43 App. Div. 27) the question arose between the wife of the deceased member and a third party who\ agreed to pay a judgment against the husband. The wife was the beneficiary named iii the certificate, and before the death of her husband assigned her interest in the certificate to the third party. The husband assigned the certificate also to the same party and consented to the assignment- by his wife. These assignments were: invalid under the rules of the corporation that issued the certificate,. ; but the corporation made no defense in the action, took no part in the trial, had really no interest in the controversy, and it was held that the beneficiary, the wife, after the death of her husband, wasestopped from questioning the validity of the assignments as against the third party who had paid the judgment against the husband on the faith of the assignments, unless she restored the moneys so paid by the third party.

The only relief -sought in that action was to hold the fund so far as to reimburse the third party for the moneys paid by him.

The respondent here had had the custody of the two certificates-since they were issued to the father. She had paid in assessments thereon $743.80. Then - when the mother, the beneficiary, died, - the two sisters made the agreement hereinbefore referred to, the appellant to take- one certificate and support the father and bear no part of the assessments already paid, the respondent to take the other certificate, bear all the .assessments on both certificates-already paid, and each should -release all claims'or interest in the certificate taken by the other.' This agreement was consented to by the father, the member, and the changes were made accordingly in the beneficiary under the certificates. The appellant has had the: full benefit of this arrangement, had the full $2,000. under her certificate and $300 under respondent’s certificate (during the father’s lifetime), and has sought by some influence over her father, who lived with her, and became infirm and blind before death, and through a change of the beneficiary under respondent’s certificate, to take away from her sister the remaining $1,700 payable thereon. It seems to us a very proper case for the application of the principle of estoppel in aid of the principle that the respondent acquired a vested interest in the certificate held by her, which could not be divested by the father and member, acting under the influence of the appellant.

A correct conclusion was reached by the trial court, and the judgment appealed from should be affirmed, with costs.

All concurred.

Judgment affirmed, with costs.  