Case Name: William A. Bradshaw et al., as Executors of Robert C. Bradshaw, Deceased, Appellants, v. The Mutual Life Insurance Company of New York, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1912-05-24
Citations: 205 N.Y. 467
Docket Number: 
Parties: William A. Bradshaw et al., as Executors of Robert C. Bradshaw, Deceased, Appellants, v. The Mutual Life Insurance Company of New York, Respondent.
Judges: 
Reporter: New York Reports
Volume: 205
Pages: 467–478

Head Matter:
William A. Bradshaw et al., as Executors of Robert C. Bradshaw, Deceased, Appellants, v. The Mutual Life Insurance Company of New York, Respondent.
Insurance (life) —policy upon life of husband for benefit of wife — rights of legatees of wife who died, leaving no issue, before death of husband—when rights of parties under policy not affected by letter of general agent of insurance company stating that policy had been made payable to husband’s estate.
1. Where an insurance policy issued on a husband’s life, upon an application signed in the name of his wife by him, for her use, or then children if she should not be living at the time of his death, and he paid the premiums on the policy, he acquired neither interest in nor power of disposition over the policy. There being no children, the wife was given power by section 2 of chapter 821 of the Laws of 1873 to dispose of the policy by will, without limitation.
(' 2. The rights of the legatees of the wife, she having died before the husband, cannot be affected by a letter from a general agent of the insurance company, in response to a request by the husband, stating that the policy had been made payable to his estate, nor did any estoppel arise therefrom which disabled the insurance company from denying the right of the executors of the husband to recover thereon. The policy was a contract with the wife, and such transaction was ineffectual to alter it or to divert the insurance moneys from the wife’s residuary legatees.
{,9X3. Where in an action on the policy by the executors of the husband there was no cause of action alleged in the complaint based on a right to recover back the premiums paid by their testator, and there was nothing before the court but the issue tendered as to then right to recover the insurance moneys under the policy, no recovery can be had on account of such premiums.
Bradshaw v. Mutual Life Ins. Co., 140 App. Div. 917, modified.
(Argued March 22, 1912;
decided May 24, 1912.)
Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered December 2, 1910, affirming a judgment in favor of defendant entered upon a verdict directed by the court.
The action was brought to recover the amount of an insurance policy issued by the defendant on the life of the plaintiffs’ testator and the contest is between plaintiffs and the residuary legatees of the testator’s wife, Corrie J. Bradshaw. No question is made by the defendant that it is liable to pay the amount of the policy to one of the two sets of claimants.
While testator’s wife was living, he had some talk with one of defendant’s agents about taking out a policy of life insurance, payable to his wife, if living, or to their children. Subsequently, written application was made to the defendant for a policy to be issued on his life. In this application he was described as “ the person proposed for insurance,” and the application was signed in the name of his wife by him; the signature being placed opposite a printed instruction on the application that “ a wife may sign by her husband.” In response to this application, a policy was issued, payable on the death of the assured to “Corrie J. Bradshaw, wife of Robert C. Bradshaw, * * * for her sole use, if living, in conformity with the statute, and, if not living, to their children, or their guardian for their use.” The policy was delivered to the testator, who appears to have retained it. in his possession and who paid the premiums thereon. The wife died before he did; without children and leaving a will, which did not specifically bequeath the policy, or its proceeds, but did contain a residuary clause in terms broad enough to cover the same. Subsequent to his wife’s death, testator wrote to the defendant advising it that he had its two policies, including this one, and stating “those are payable to my wife. * * * She died July 1st * * * and I desire these policies pay able to my estate. Will you please attend to this for me.” The defendant requested testator to supply affidavits setting forth the death of his wife, the fact that she left no children and that she died leaving a will; which was done. Upon receipt of this, a letter was written to testator in the name of the defendant’s general agent by one Pratt, who styled himself “Cashier,” as follows: “I am in receipt of your favor of the 5th inst., asking me to report progress in the matter of changing your policy. * * * You filed an affidavit of the* death of Mrs. Bradshaw, which is all that is necessary to .do in the matter. The records of the company will show the fact that the policy has been made payable to your estate.” Thereafter, testator continued to pay the premiums on the policy. The trial court directed a verdict for the defendant and on appeal to the Fourth Appellate Division, the judgment entered on the verdict was affirmed. The plaintiffs further appeal to this court.
Arthur C. Wade for appellants.
The defendant is now estopped from denying the right of the plaintiff to recover under this policy. (Pom. Eq. Juris. § 804, Kenyon v. K. T. & M. M. A. Assn., 122 N. Y. 247; Bigelow on Estoppel [5th ed.], 573; Story on Oont. [5th ed.] § 571.) The agreement between the plaintiff’s testator and the defendant was a valid contract of insurance, and may be treated as anew policy of insurance, payable to the estate of Robert C. Bradshaw on his death. (Hicks v. B. A. A. Co., 162 N. Y. 284; Squier v. H. F. Ins. Co., 162 N. Y. 552.)
Frederick L. Allen for respondent.
The defendant was unable by any act of its own to confer any right upon Robert C. Bradshaw and so take away from his wife’s executrix the right to the proceeds of the policy. (Ryan v. Pistone, 89 Hun, 78; Henry v. Ritenauer, 31 Ind. 136; M. S. Bank v. Goff, 13 R. I. 516; Burgess v. Badger, 124 Ill. 288; Vance v. R. C. Mfg. Co., 82 Fed. Rep. 251; Illinois Co. v. Linstroth, 112 Fed. Rep. 737; Ridgeway v. Grace, 2 Misc. Rep. 293; Thorne v. Deas, 4 Johns. 84; Hollins v. Hubbard, 165 N. Y. 534; Gerhardt v. Bates, 2 El. & Bl. 475, 487.) There can be no estoppel, for Bradshaw was chargeable with knowledge of the legal impossibility of effecting a change in the policy. (Baker v. U. M. L. Ins. Co., 43 N. Y. 283; Shirne v. Boker, 150 U. S. 312; Brick v. Campbell, 122 N. Y. 337; Steel v. S. L. S., etc., Co., 106 U. S. 447; Whitwill v. Winslow, 134 Mass. 343; Brewster v. Striker, 2 N. Y. 19; Chatfield v. Simonson, 92 N. Y. 209.)

Opinion:
Gray, J.
I think that the judgment below was right. The plaintiffs had no interest in the contract sued upon and I am unable to understand how any new contract was created between their testator and the defendant. The policy of insurance, upon which the plaintiffs seek to recover, was a contract with the wife of the testator and though procured by him for her benefit, he was acting as her agent and represented her. It was immaterial that he paid the premiums and retained possession of the policy; those facts did not affect the contract as one with her alone. He acquired neither interest in, nor power of disposition over, the policy. His relation to it was that of the life insured; while hers was that of the legal holder, in whom, solely, was vested the interest. This cannot well be disputed upon the cases, (see Whitehead v. N. V. Life Ins. Co., 102 N. Y. 143; Holmes v. Gilman, 138 id. 369; Shipman v. Protected Home Circle, 174 id. 398; Millard v. Brayton, 177 Mass. 533), and the principle was recognized, when this case was, previously, before us. (187 N. Y. 347.) Under the statute, (Laws 1873, ch. 821, sec. 2), the testator's wife was given a power to dispose of the policy by will, upon the exercise of which there was no limitation; there being no issue of the marriage. As she left a will, which comprehended in its residuary clause a disposition of the insurance moneys to others, they, as her legatees, only, are entitled to recover them from the defendant.
I cannot agree in the view that there resulted from the transactions between the plaintiffs' testator and the defendant, after the death of his wife, some new agreement by the latter to insure his life for the benefit of his estate; or that an estoppel arose thereout, which disabled .the defendant from denying the plaintiffs'right to recover upon the policy in question. If we might assume, which I gravely doubt, that an agent could commit the defendant to a new and different liability, the 'letter, which is relied upon, could not alter the existing contract, and it did not effect a new one. If the assured supposed that the policy could be made payable to his estate, his ignorance of the law would not excuse him. Equally, the mistake of an agent of the defendant, in construing the contract and the rights of the assured under it, would not estop the defendant from thereafter taking that position, which the correct legal interpretation required. The parties had the contract before them and were chargeable with the knowledge of its legal-effect and operation. Whether the assured, after his wife's death, could change the policy and have it made payable to his estate was a matter, which the law took care of, and what the defendant's agents said, or wrote, about it was a matter of opinion, which could not estop the defendant from asserting differently, upon being advised as to the law. (Sturm v. Boker, 150 U. S. 312; Brick v. Campbell, 122 N. Y. 331.) I cannot see that the assured was misled to his prejudice, in the sense that he was prevented from changing the terms of the existing policy, or from doing anything which he otherwise would have done. He lost nothing by relying on the word of the agent: for he had nothing to lose. There was no change he could have effected in the contract, by agreement, or by action, and there is nothing upon which to base any inference that he desired to procure new insurance: nor is there any reason apparent why he should. The question of the case is not what the assured supposed, or what he was led to believe by the defendant's agent, but what was the agreement which the defendant was obligated to perform. That is to be determined from the allegations of the complaint and they set out the insurance policy and the transactions between the assured and the defendant, upon the former's application to have the terms of the policy changed and to have the amount thereof made payable to him. The policy was a contract with the wife and the transactions alleged and proved were ineffectual to alter it, or to divert the insurance moneys from the wife's residuary legatees.
There was no cause of action alleged in the complaint based on a right to recover back the premiums paid by the plaintiffs' testator and none such was added. The plaintiffs were suing to enforce payment to themselves of the moneys, which were payable by the defendant under the terms of the policy of insurance. But having no interest in the policy, as representatives of the assured, I am unable to perceive how they can, upon the cause of action alleged, be deemed entitled to recover the premiums in question. What took place at the trial neither extended the plaintiffs' right of recovery, nor added such a cause of action. There was nothing before the court but the issue tendered by the plaintiffs as to their right to recover the insurance moneys under this policy and I cannot find that any other question was raised. Having failed to establish their cause of action, as alleged, the plaintiffs were in no position to recover upon any different one. (Southwick v. First Nat. Bank of Memphis, 84 N. Y. 420.)
I think that the judgment should be modified, in accordance with the consent of defendant, by crediting on said judgment the premiums paid by plaintiffs' testator and interest thereon to date of judgment and, also, the plaintiffs' costs to the date of service of offer of judgment, such amounts in case of dispute to.he fixed by the Supreme Court; and, as so modified, that said judgment should be affirmed, with costs.