Case Name: Alice E. Milligan agt. George E. Goddard
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1885-04
Citations: 1 How. Pr. (n.s.) 377
Docket Number: 
Parties: Alice E. Milligan agt. George E. Goddard.
Judges: 
Reporter: Howard's Practice Reports
Volume: 3
Pages: 377–379

Head Matter:
SUPREME COURT.
Alice E. Milligan agt. George E. Goddard.
Insurance (Ufe) — Forfeiture of certificates — Effect of.
Though a life insurance company may reinstate a certificate of membership after it has been forfeited, so far as its own rights were affected, yet where the holders of other certificates have been benefited by such forfeiture, by the very terms of the certificate itself, the company can- ■ not, without their consent, deprive them of the benefits thus accruing by the terms of their contract. •
Special Term, April, 1885.
The defendant, the Mutual Trust Fund. Life Association, issued to one C. D. Milligan a certificate of membership, whereby they agreed, upon the death of said Milligan during the continuance of the membership, to pay the sum of $3,000 equally (share and share alike) to Alice E. Milligan (wife) as one party, and to the survivors of his friends, George E. Goddard, Thomas J. Tuomey, H. J. Stemler, Thomas Gorey, Thomas Kelly, Charles C. Pettus, F. Sheffield, John F. Souter and G, Centre, who shall have kept their certificates Eos. 368, 369, 370, 371, 372, 374, 375, 377 and 383 in this department in force until his death, provided that if said C. D. Milligan should survive them, then the benefit is to be paid Alice E. Milligan (wife). The persons named as holders of certificates were the holders of certificates with similar conditions to those mentioned in Milligan’s certificate, and made payable in the same way. There was a provision in these certificates that if assessments were not paid when due that then the certificate should be null and void, and all payments made thereon should be forfeited to the association. All the persons holding other certificates made default in these payments, some of which were waived by the association, and in some cases the membership was never revived. Milligan having died, his widow claims the whole of the insurance money upon the ground that none of the other certificates had been kept in force until the death of her husband, and has filed this bill to determine the respective rights of the parties.
Herman Aaron, for plaintiff.
J. Adolphus Kamping, for defendant.

Opinion:
Van Brunt, J.
— Although the association may have had the power to waive defaults as far as its own rights were affected, it is difficult to see how, if such waver affected other parties to its contracts, it could dispose of their rights. By a clause in the policy or certificate it became null and void in case of default in making payments. It was this clause which was undoubtedly referred to in these policies where payments are to be made upon death only to those who have kept their certificates in force, and the moment the event happened by which a certificate became null and void an additional right vested in the other beneficiaries, under the certificate of which they could not be divested without their consent. The case is one which differs widely from those where the insurance company and the assured are the only contracting parties.
In the case at bar, each one of the holders of these certificates named in the certificate is a party to it; has rights under it whicli cannot be taken away without his consent. It may be all very well for the association to reinstate a certificate after it has been forfeited, but as the holders of other certificates have been benefited by such forfeitures by the very terms of the certificate itself, the association cannot, without their consent, deprive them of the benefits thus accruing by the terms of their contract. Such being the case, the reinstatement of these certificates by the company after they had ceased to exist in no way prejudiced rights under the certificates in question. These parties may have valid policies as against the company, but the moment they allowed their certificates to lapse, they lost all rights under the certificate in question, which could be reinstated only by the consent of the beneficiaries under the certificate, whose rights were to be affected by such reinstatement, as well as by the assent of the association issuing the certificate. Ho such assent having been given in this case at bar, the holders of the other certificates lost their rights under the certificate in question, and cannot now claim any portion of the proceeds of the same.
Judgment for plaintiff.