The plaintiffs are the surviving sisters and brother of Bartholomew Savage, deceased, who brought an action on April 8th, 1903, to recover the sum of two thousand dollars upon a benefit certificate issued to him by the defendant association. On the 13th day of April, 1903, the defendant Flynn, as the beneficiary named in the certificate, commenced a similar action against the defendant association.
By an order of the court made April 16th, 1903, upon the application of the defendant association, it was permitted to pay the amount of the benefit certificate into court and the action brought by defendant Flynn against the association was thereupon discontinued and he was interpleaded as a defendant in this action. The case was tried at Special Term and resulted in a judgment in favor of the defendant Flynn, which was unanimously affirmed by the Appellate Division.
There are two principal questions presented by this appeal. The first one, whether the plaintiffs have any standing in court enabling them to sue upon this benefit certificate, and the other, whether the complaint, assuming the plaintiffs have the right to litigate, sets up a cause of action.
In considering these questions a few facts must be stated. The defendant association was incorporated under the Laws of 1879, chapter 496. Section seven thereof provides, among other things, as follows: "Such beneficiary fund as may be ordained suitable by said corporation may be set apart and provided to be paid over to the families, heirs, or representatives of deceased members, or to such person or persons as such deceased members may, while living, have directed." Section three provides that the corporation shall have power to make, from time to time, such constitution, by-laws, rules and regulations as they shall judge proper for the due conduct of its business.
The certificate of insurance issued to Bartholomew Savage, deceased, contains this language: "Which sum shall, at his death, be paid to Barney Flynn with whom he lives and upon whom he depends, or such other person as the rules and regulations of said association shall determine." *Page 66
The contention of the plaintiffs is that while the language of the certificate constituting Barney Flynn the beneficiary is in conformity with the act of incorporation, yet the same is void for the reason that section fifteen of the Beneficiary Fund Law, enacted in pursuance of the provisions of the said act, has changed the rule as to the power of the insured to name beneficiaries. That section provides that the insured may make the certificate payable "to his wife, his children or any child by legal adoption, his father, mother, his brothers or sisters, blood relations or persons dependent upon him for maintenance, sustenance and support."
It is by reason of these facts that the brother and sisters of the deceased insist that the amount due from the defendant association on the benefit certificate should be paid to them rather than to the defendant Flynn.
It is to be kept in mind that this action, as tried, was between the brother and sisters of the insured and Flynn, the beneficiary named in the certificate; that the defendant association is not defending and holds itself ready to pay such person as the court may determine is the legal beneficiary.
It has been frequently held in the lower courts that if the defendant association's act in issuing the certificate was ultravires, persons in the position of these plaintiffs cannot take advantage of it, inasmuch as they come into court having no certificate at all and without a contract basis for any claim whatever. (Markey v. Supreme Council C.B.L., 70 App. Div. 4.) (See, also, Luhrs v. Supreme Lodge, Knights and Ladies ofHonor, 27 N.Y. State Repr. 88; Maguire v. Maguire, 59 App. Div. 143; see, also, Story v. Williamsburgh M.M.B. Assn.,95 N.Y. 474.)
The question of ultra vires could only be raised by the association even if it existed as a defense. In the case at bar, under the findings of fact and the unanimous affirmance by the Appellate Division, it is very clear that even as to the defendant association the defense of ultra vires would not be available as it has waived the same and is estopped from pleading it. The association had repeated notice of the fact *Page 67 before issuing its certificate that the insured proposed that it should be issued to the defendant Flynn with whom he lived and upon whom he depended. This appeared in the written application made to the association by the insured; again in the report of the medical examiner; once more when these papers were filed with the supreme recorder, whose duty it was to keep a record of the names of all members and their beneficiaries, and finally in the certificate as issued.
The findings disclose that the insured never married and left him surviving no wife or children, no father or mother, and the plaintiffs are his only sisters and brother; that at the time he became a member of said association, and for many years prior thereto and up to the time of his death, he lived as a boarder with the defendant Flynn, and when the certificate of membership was issued to him by said association he delivered the same to the wife of the defendant Flynn, who retained it until the death of the insured.
We are of opinion that these plaintiffs have no standing in court for the reasons already stated; and, further, that if the allegations of the complaint had been set up by the association in the action brought by Flynn they would constitute no defense, as the beneficiary named in the certificate was authorized by the act of incorporation, and the association is shown to have repeatedly waived any right it might have had to insist that the Beneficiary Fund Law, so called, did not contemplate the beneficiary named.
The association practically said to the insured, we note the name of your beneficiary and approve the same, notwithstanding our Beneficiary Fund Law fails to cover the case but our act of incorporation does. We will, therefore, issue a certificate and you can pay your dues and assessments in full confidence that in the event of death your beneficiary will receive the amount of insurance. The insured acted upon this representation and paid dues and assessments, as did the defendant Flynn; these facts clearly establish waiver and estoppel.
The judgment appealed from should be affirmed, with costs. *Page 68