Case Name: WHITELAW, Plaintiff-Appellee, v. WHITELAW, Defendant, PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant
Court: Ohio Court of Appeals
Jurisdiction: Ohio
Decision Date: 1952-09-29
Citations: 65 Ohio Law Abs. 11
Docket Number: No. 22471
Parties: WHITELAW, Plaintiff-Appellee, v. WHITELAW, Defendant, PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant.
Judges: THOMPSON, J, concurs.
Reporter: The Ohio Law Abstract
Volume: 65
Pages: 11–26

Head Matter:
WHITELAW, Plaintiff-Appellee, v. WHITELAW, Defendant, PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant.
Ohio Appeals, Eighth District, Cuyahoga County.
No. 22471.
Decided September 29, 1952.
S. G. Webster, Cleveland, for plaintiff-appellee.
Arter, Hadden, Wykoff & Van Duzer, C. M. Horn, F. D. Kidder, Cleveland, for defendant-appellant.

Opinion:
OPINION
By SKEEL, PJ.
This appeal comes to this court on questions of law from a judgment entered by the Common Pleas Court granting to the plaintiff herein all of the defendant's (James D. Whitelaw) right, title and interest in and to certain insurance policies issued to him by and under a contract with the defendant, The Prudential Insurance Company of America. The action was one in divorce. The defendant, James D. Whitelaw. was not found within the jurisdiction of the court and constructive service was had upon him as provided by law. (Secs. 11984 and 11294 GC.) .
At the time the plaintiff filed her action for divorce she had in her possession two separate policies or contracts of insurance between the defendant, James D. Whitlaw, and The Prudential Insurance Co. of America. On February 8, 1952, the plaintiff filed a supplemental petition stating that she had possession of said policies of insurance and that she had and was continuing to pay the premiums thereon and in addition to the prayer for divorce a'sked that the court award her all of the right, title and interest in and to said contracts of insurance belonging to the defendant, James D. Whitelaw.
The Prudential Insurance Company of America was made a party defendant and served with summons. This new defendant filed an answer admitting the insurance contracts with James D. Whitelaw, naming the plaintiff as beneficiary. The defendant then filed a motion asking to be dismissed from the action for the reason that the court had no jurisdiction to make the order prayed for as to its contract of insurance with the defendant, James D. Whitelaw. The court overruled the motion, and in addition to granting plaintiff a divorce, entered the following judgment with regard to the insurance policies:
"The Court also finds that the plaintiff, at the time of filing the original petition, had in her possession and now has in her possession, two policies of insurance on the life of the defendant herein, said policies being with the Prudential Insurance Company of America and being described as follows: No. M-47060975 dated December 1, 1947, being a twenty payment life policy in the sum of $2000; policy No. 462803701 dated July 15, 1946, being a twenty payment life policy in the sum of $500.00. The Court finds also that the plaintiff paid the premium on the aforesaid policies in the past and is now paying the premiums on the within described policies. The court further finds that James D. Whitelaw was served only by publication and at no time during the proceedings herein did he enter his appearance. The aforementioned policies of insurance, namely, M-47060975 and 462803701 were introduced in evidence and received by the court. The court finds that it has jurisdiction to award to plaintiff all the right, title and interest owned and possessed by defendant, James D. White-law, in and to said insurance policies. IT IS THEREFORE HEREBY ORDERED, ADJUDGED AND DECREED that the plaintiff be, and she is hereby awarded all the right, title and interest of the defendant, James D. Whitelaw, in and to the within described policies of insurance and she is hereby granted full and complete control and ownership thereof, together with all rights therein and thereunder, to all of which defendant, The Prudential Insurance Company of America excepts."
The defendant, The Prudential Insurance Company of America, in bringing this error proceeding, claims the following errors:
1. The Court of Common Pleas of Cuyahoga County, erred in overruling defendant-appellant's motion to dismiss made subsequent to the hearing of the divorce;
2. The Court of Common Pleas of Cuyahoga County, erred in holding that it had jurisdiction to award alimony to plaintiff out of a contract between defendant, James Whitelaw and defendant-appellant, The Prudential Insurance Company of America.
3. The Court of Common Pleas of Cuyahoga County erred in holding there was property of the defendant, James White-law before the court:
4. The Court of Common Pleas of Cuyahoga County erred in assuming jurisdiction over personal contractual rights between defendant, James Whitelaw and defendant-appellant, The Prudential Insurance Company of America.
5. The Court of Common Pleas of Cuyahoga County, erred in' altering the contracts of life insurance.
6. The Court of Common Pleas of Cuyahoga County erred in entering a judgment awarding the contractual personal rights of defendant, James D. Whitelaw, to plaintiff. •
7. The Court of Common Pleas of Cuyahoga County, erred in not awarding judgment to defendant-appellant, The Prudential Insurance Company of America.
8. Other errors apparent on the face of the record to the manifest prejudice of defendant-appellant."
It must be noted at the outset that the defendant, James D. Whitelaw, was not personally served with summons, nor did he enter his appearance. Only constructive service was obtained upon him. Such service is sufficient to deal with the marital status of the parties, but does not give the court jurisdiction to enter a personal judgment for alimony. The decree does not contain an order for the payment of alimony.
Only in the event that property, real or personal, is within the jurisdiction of the court, may the court subject it to the benefit of a plaintiff as alimony in a divorce action where the defendant has been summoned by constructive service. (Benner v. Benner, 63 Oh St 220; Reed v. Reed, 121 Oh St 188.)
A contract of insurance bestows upon the insured certain personal rights. Such rights are not lost to the insured by reason of the fact that the person named as beneficiary is in possession of the policies. The only value that can be ascribed to the policy, aside from its use in carrying out certain of the policy provisions, is that it is evidence of the terms of the contract; it is not a symbol of property.
One of the two insurance policies in this case, with respect to control by the insured, provides as follows:
"CONTROL: The insured alone shall be entitled during his or her lifetime, without the consent and to the exclusion of the Beneficiary, to obtain any cash surrender value and any other benefit and value accruing hereunder, to change the Beneficiary and to exercise any other right or option conferred by this Policy or allowed by the Company."
The other policy has terms substantially similar upon this point.
The interest of the plaintiff as named beneficiary in the insurance policies of the defendant husband in a divorce action where the provisions of the policies reserve to the insured the right to change the beneficiary is only that of an expectancy during the life of the insured and no right becomes vested in the named beneficiary under such a policy until the death of the insured.
Katz v. The Ohio National Bank, 127 Oh St 531 (191 N. E. 782).
Getting Gdn. v. Sparks, 109 Oh St 94 (143 N. E. 184).
Atkinson v. Metropolitan Life Ins. Co., 114 Oh St 109 (150 N. E. 743). Paragraph II of the Oetting, Gdn. case, supra, provides:
. "The right of a beneficiary in a contract of insurance which reserves to the insured the right to change the beneficiary from time to time and which may be defeated by the insured by the designation of another beneficiary or by non-payment of dues does not become vested until the happening of the event which matures the policy."
The fact that the "Policy" in this case is in the possession of the beneficiary, does not enlarge her rights therein. Nor does the fact that because of the failure of the insured to pay the premiums, the present beneficiary in order to save a forfeiture of the insurance interest has made such payments, add anything to her legal rights under the terms of the policy.
In the case of Minning v. Prudential Insurance Company, 88 Oh Ap 339, a father purchased two policies of insurance, one for each of his minor sons. Each son was designated in the policy issued to him as the insured and the father, plaintiff in the action was named beneficiary; The policies provided that the insured could change the beneficiary and among other options (after a designated period of time) could demand the cash surrender value. The plaintiff father kept possession of policies and paid thé premimus from July, 1939 (the date of the policies) until and including the payments due in July, 1946. Domestic difficulties having then developed, he notified his wife and the boys he would not pay the premiums due in July, 1947. A divorce action was filed and a decree entered which in addition to granting the wife and mother of the boys a divorce, it also ordered the husband to surrender the policies to the boys. They thereupon in January, 1947, demanded and received the cash surrender value of the policies. On March 27, 1947, both boys met death by drowning and suit was then filed by the father as named beneficiary, claiming the proceeds of the policies. In reversing a judgment for the plaintiff on one of the policies, this court, sitting by designation in the First District, held:
"1. It is the settled law of this state that where a policy of life insurance reserves to the insured the privilege of changing the beneficiary, no vested right is acquired by a designated beneficiary prior to the death of the insured.
"2. The right under a life insurance policy to surrender policy and receive its cash surrender value is an option to the insured to accept a continuing offer on the part of the insurer and when exercised, fixes the rights of the parties without further action on the part of the insurer."
And, on page 344 the court said:
" Plaintiff was without power to surrender the policy and obtain the cash value thereof. The contract of the company was with the son. The son alone possessed the right to surrender the policy for its cash surrender value. Plaintiff's possession of the policy and his payment, of the premiums to July, 1947, invested him with no rights in addition to his mere expectancy as a revocable beneficiary. He was divested of possession of the policy by the decree of divorce."
The provision contained in the policies that in the exercise of certain of the options therein provided for on the part of the insured it is necessary to surrender the policy as a condition precedent to the exercise of such option, is for the sole benefit of the insurer. Such provision may be waived by the insurer without liability to anyone except those who have acquired a vested interest in the policy with the knowledge and consent of the insurer.
The court, by the decree here under consideration, was attempting to make a new contract for the parties and the fact that a divorce court, having jurisdiction of the person of the insured, might compel him to assign to the plaintiff his interest in the policies as an incident of the divorce does not authorize such action in the case of a nonresident served only by publication. An end otherwise unattainable is not to be attained by construing a mere contract right as property within the language of §11990 GC.
In the case of Greenlee v. New York Life Ins. Co., 9 Abs 331, a decision of the Court of Appeals, Sixth District, it was held, in affirming the Common Pleas Court, that the right of the divorce court to subject value of real property or personal property of defendant within the jurisdiction of the court to payment of alimony awarded, though defendant was served only by publication, does not empower the court to require defendant to exercise an option to take cash surrender value of in surance policies. It may be noted that this case was taken to the Supreme Court of Ohio on error and was dismissed by that court (123 Oh St 599). It is true that the Supreme Court found that the Court of Appeals had lacked jurisdiction in the case, but the Court of Appeals had affirmed the trial court and nothing in the opinion of the Supreme Court indicates disapproval of the holding of the trial court or of the Court of Appeals on the merits.
See also: Byjelik v. John Hancock Mutual Life Ins. Co., 324 Mich. 54, 36 N. W. 2d. 212.
Estin v. Estin, 334 U. S. 541, 1 A. L. R. 2d. 1412.
See page 1219 under Headnote 2.
The plaintiff has. without doubt, the right to keep the policies in force by continuing payment of the premiums, so that she may benefit from any rights that may become due at a future date under the terms of the policy, or by a decree of a court having jurisdiction of the insured by proper service But, such benefits must come from the contract as agreed upon between the insurer and the insured and not upon terms subsequently imposed by the court, where the insured is not before the court either by personal service or by his voluntary appearance.
For the foregoing reasons, that part of the decree substituting the plaintiff for the insured in the contracts of insurance between said insured and the defendant, The Prudential Life Insurance Company of America is reversed and final judgment entered for said defendant.
THOMPSON, J, concurs.
HURD, J, dissents. (See dissenting opinion.)