Court Opinion

ID: 9864734
Source: CourtListenerOpinion
Date Created: 2023-09-25 16:08:48.3796+00
Date Added: 2024-06-11T12:31:20.400977
License: Public Domain

Mr. Justice Jackson
dissenting.
Here is something new under the sun. An appellate court, by way of vindicating the proposition that an insured man may change his beneficiary to some one other than his wife or executor or administrator, has bestowed upon this so-called beneficiary a largesse that the insured never intended to bestow and has left unpaid the expenses of his last illness and funeral, which the insured had every intention of having paid out of the proceeds of the insurance.
It has taken this action in the face of the following facts:
(1) An indication by the insured himself, at the time he took steps to change his beneficiary from his executor or administrator to Mattie Jenkins, that the pro*79ceeds did not go to her outright and freed of any duty or charges. The endorsement on the back of insured’s application for change of beneficiary, made by the investigating agent of the company, reads: “Insured states he has no relative whom he has any confidence in and says he definitely wants this friend as Beneficiary—does not want to name his estate.” This indicates a trust relationship, and Mattie Jenkins was relied upon to carry out his wishes and instructions. If he had wanted her to take outright all of the proceeds of the policy, there would have been no need for his remark that she was the only person in whom he had confidence.
(2) Subsequent to the insured’s death, the acts and words of Mattie Jenkins herself show the following (a) She alleged in her complaint and testified in the subsequent trial that following the insured’s death she had contracted for the funeral expenses and expenses of last illness of the insured, (b) She also testified on cross-examination as follows: “Q. You went to the Metropolitan Life Insurance Company with the express purpose of taking this money from this policy and paying for his funeral expenses? A. Sure, yes. * * * Q. You have not spent one dollar toward funeral expenses incurred in the burial of Wade, have you? A. No. Q. But you did intend to use this money that you are seeking to collect now, for that specific purpose, didn’t you? A. Sure I was.”
(3) The findings of the trial court included the following paragraph: “That the policy in question and being No. 35849446 upon the life of William D. Wade was a life insurance policy to be used for the burial expenses of the insured William D. Wade.” There was evidence to support this finding, and there was none to disprove it. I believe it is binding on this court and cannot be ignored.
It is apparent from the foregoing recital that had not the estranged wife of Wade appeared upon the scene when she did, the funeral arrangements entered into by *80Mattie Jenkins with the Douglass Undertaking Co. would have been consummated, Wade would have been buried peaceably, Jenkins would have been paid the proceeds of the policy by the Metropolitan out of which she would have paid the expenses of last illness and funeral. Wade’s wishes and directions would have been respected and performed, and this case would not have arisen.
But a wife, even though she be estranged, often acts upon the theory that in matters pertaining to her husband she has rights superior to those of a stranger. The wife in this case was evidently of the opinion that she could and would set aside what the stranger had arranged, and, in respect to taking over the disposition of the body of her deceased husband she seems to have been within her rights.
For the right of the wife to the body of her deceased husband is the same as the right of the husband to that of his wife, E. R. Butterworth & Sons v. Teale, 54 Wash. 14, 102 Pac. 768, 18 Ann. Cas. 845, which case in turn cites numerous cases as authority. And in O’Donnell v. Slack, 123 Cal. 285, 55 Pac. 906, 43 L.R.A. 388, it was squarely held that the disposal of the body of a person who has not made any testamentary provision therefor cannot be taken away from his widow and given to a stranger to his blood. This right of the surviving spouse to control the burial may be waived by consent or otherwise. 15 Am. Jur. 834, §9. But there is no evidence of waiver in the instant case.
The insured’s intention to have his funeral arrangements handled by his friend Jenkins have failed of fulfillment, due to circumstances over which no one but himself had any control. He could have prevented his estranged wife’s interference by a number of methods, including divorce, testamentary disposition of his body, or agreement. But, not having done so, he ran the risk of having that happen which did happen and for which no one else is to blame.
*81When Wade originally took out his policy in the Metropolitan he had the intention that the proceeds of the policy should be used for his funeral expenses and expense of last illness, should his death occur prior to the endowment of the policy at age 79. There is in my judgment no evidence to show that Wade ever changed ■this intention when he took steps toward changing the beneficiary from executor or administrator to Mattie Jenkins. The trial court so found, and Mattie Jenkins’ very acts and words support that finding.
We have then the case of an insured who had two objects (1) to have his expenses of last illness and funeral paid out of the proceeds of the policy; and (2) to have these funeral arrangements made by Mattie Jenkins rather than his executor or administrator or any one else. The latter object, as we have seen, has been rendered impossible of fulfillment. What the majority now say is that, as long as the second object is incapable of fulfillment, they will not carry out his first object which still can be consummated. The majority, in effect, say that as long as Mattie Jenkins was prevented from carrying out the funeral arrangements they will treat her as a beneficiary instead of a trustee, and will give her the proceeds of the policy outright as a consolation prize instead of giving her the money charged with the duty to make these post-mortem payments. In other words, they say as long as Wade’s wishes can only be partially carried out, they will not carry them out at all. This would seem the height of absurdity.
This disposition incidentally runs counter to a considerable number of principles of law and equity.
It violates the rule that a man must be just before he is generous—a principle that the insured was himself attempting to follow by providing that his expenses of last illness and funeral should be paid out of the insurance and only any over-plus be left in the hands of the beneficiary of the policy.
*82It violates the cy pres doctrine of making the closest application possible where uncontrollable circumstances have made a trust provision incapable of being literally followed.
It violates the rule that enforces an implied or constructive trust in circumstances where it is clear that a beneficiary does not take absolutely in his own right, but takes charged with a duty to make some prescribed disposition of all or some of the property bestowed upon him.
It violates the rule that provides that in any construction of an instrument the intention of the donor shall govern.
It violates the rule that no trust shall be allowed to fail for want of a trustee. In this case the intended trustee was prevented from acting in making the funeral arrangements, but that fact should not relieve her from paying the funeral expenses; nor should it allow her to keep in her individuál right what it was never intended she should keep.
It is thus apparent, even granting everything that has been said in the majority opinion by way of attempting to prove via the Moore v. Hendley case, cited in the majority opinion, that Mattie Jenkins has been substituted as a beneficiary under the policy in place of the executor or administrator—yet even so the first valid claim to the proceeds of the policy is that of the person who has paid the expenses of the last illness and funeral. And Mattie Jenkins is by her own words and acts estopped from denying the truth of this statement.
The trial judge realized that, however the terms of the policy were interpreted, it all came back to the proposition that the expenses of the last illness and funeral must be paid. The only question in his mind was whether the proceeds of the policy should be awarded to Granberry as administrator, or to Granberry as an individual. His first judgment was for the former. He later changed it in favor of the latter.
*83It is my opinion that the decree should, as a matter of fact, be awarded in favor of Granberry as administrator because I do not believe that Moore v. Hendley, supra, upon which the majority opinion relies, is controlling in this case. That case was not before the trial court. It was first called to the attention of this court in the petition for rehearing. The principal point at issue in that case was whether Moore, substituted without qualification as the designated beneficiary in the mandatory clause of an industrial policy and described therein as the husband of the insured, could recover the proceeds of the policy on the death of the insured even though the evidence disclosed that he, in fact, was not the insured’s legal husband—the insured at the time of her death being married to another man from whom she had been separated but had never been divorced. Mr. Justice Bouck, speaking for the court, held in that case that the word “husband” was simply a word descriptio personae, and allowed Moore to recover. All the citations of authority were based solely on that point and the case properly appears in the digests solely under the topic of Insurance, being so digested both in the Colorado Digest and the Fourth Decennial Digest. From the syllabi appearing in the Colorado Reports and in the Pacific Reporter, there is no indication that the court considered a point of law involving a “facility of payment clause.” And apparently the case has never been cited elsewhere.
The policy in the Moore case (97 Colo. 258, 48 p. [2d] 808) did, in fact, have a facility of payment clause, and the endorsement placed on it read as follows: “Subject to the provisions of the policy authorizing payment at the company’s option to other persons, Thomas Moore, husband, has been designated beneficiary, to receive death benefit only.” It was held that, the company not having exercised its option to make payment thereunder, no payment could be made under the facility of payment clause but that Moore was en*84titled to recover “by virtue of the endorsement which designates him as the beneficiary (thus substituted for the insured’s executor or administrator).”
Again Mr. Justice Bouck said: “Moore is entitled to the death benefit, not because he was the insured’s husband, but because he was duly substituted as beneficiary.” In so far, therefore, as this case deals with the rights of a beneficiary named in an industrial policy having a facility of payment clause, it is in complete accord with the cases generally, and particularly the cases which counsel for plaintiff in error have principally relied upon—the rule being that, where the insurance company has failed to make an election under the facility of payment clause, the designated beneficiary named in the mandatory clause shall take.
In the instant case, however, Mattie Jenkins does not stand in the same relation as did Moore in Moore v. Hendley, supra. She expressly has not been substituted for the administrator as was Moore. The endorsement naming Mattie Jenkins as beneficiary specifically makes it “Subject to the provisions of the policy authorizing payment to the Executor or Administrator of the insured, or at the Company’s option to other persons * * * ”. Under this provision the company still retains its option to pay to other persons under the facility of payment clause, including Mattie Jenkins. If the option is not exercised it must make payment under the mandatory clause. In the instant case the administrator is expressly retained as the designated beneficiary in the mandatory clause, and the endorsement naming Mattie Jenkins as beneficiary expressly limits her rights to the provisions of the policy authorizing payment to the executor or administrator. The words “subject to” mean “subservient to”, “subordinate to”, or “limited, by” and such is the meaning given in Englestein v. Mintz, 345 Ill. 48, 177 N.E. 746 (752), which case in turn cites similar definitions in Consolidated Coal Co. v. Peers, 166 Ill. 361, 46 N.E. 1105, 38 L.R.A. 624, and *85Davidson v. Van Pelt, 15 Wis. 341. “There is nothing in the use of the words ‘subject to’, in their ordinary use, which would even hint at the creation of affirmative rights.” Engelstein v. Mintz, 345 Ill. 48. The Moore case, therefore, involved a substituted beneficiary. In the instant case, the endorsement contained an express provision against substitution.
I believe that the interpretation in which the majority indulges does not give full effect to the provisions of the policy. It would ignore the proviso as it relates to the administrator and have us treat Mattie Jenkins as if she had been named beneficiary unconditionally. Realizing that the administrator has not been displaced (as was done in the Moore case by the substitution of a new beneficiary) and that some recognition must be given to the administrator, counsel for plaintiff in error argue that the effect of the endorsement is to substitute Mattie Jenkins as the designated beneficiary in the mandatory clause and add the administrator as a beneficiary in the facility of payment clause. In my judgment such an interpretation is not warranted by the words of the endorsement. The endorsement not only does not say it, but, on the contrary, imports the opposite. It makes Mattie Jenkins’ rights subordinate to the provisions of the policy authorizing payment to two classes of persons, and those two classes are separated by the disjunctive “or” rather than by the conjunctive “and”. Mattie Jenkins is named as beneficiary “Subject to the provisions of the policy authorizing payment” (1st) “to the executor or administrator of the insured” (the designated beneficiary under the mandatory clause) “or” (2d) “at the Company’s option to other persons” (those who could take under the facility of payment clause). It will be noted further that payment “at the company’s option” relates only to “other persons” named in the facility of payment clause and not to the executor or administrator, clearly indicating that there was no intention by the endorsement to *86transfer the executor or administrator into the facility of payment clause. To support the majority’s interpretation the endorsement would have to read “subject to the provisions of the policy authorizing payment at the Company’s option to the executor or administrator and to other persons.”
What I have said in regard to the Moore case also points the distinction between the instant case and Minuto v. Metropolitan Life Ins. Co., 58 R.I. 71, 191 Atl. 117, 135 A.L.R. 953, which is also relied upon in plaintiff’s brief on rehearing.
Applying the rule followed in the Moore case and the other cases discussed in the majority opinion, I believe the court should hold that the company, not having exercised its option to make payment to the “other persons” named in the facility of payment clause, should pay the administrator, who is the designated beneficiary.-
In order to minimize the limiting effect and wording of the endorsement placed upon the policy, the majority opinion deals at more length with the wording of the form of application for change of beneficiary in which the words executor and administrator are listed with other possible beneficiaries in the same line. It may be asked, how else could a general form read where it was to be used to cover various policies, some of which had the definite named beneficiary in the mandatory clause and the executor or administrator named in the facility of payment clause, while others had the executor or administrator in the mandatory clause and named individuals and others in the facility of payment clause.
It will have been already noted that interpleader has been approved in other jurisdictions, Pashuck v. Metropolitan, Turner v. Prudential Insurance Co., and Prudential Insurance Co. v. Gleim, all cited in the majority opinion. As in the instant case, so in Potter v. Young, 193 Ark. 957, 104 S.W. (2d) 802, the insurance company paid the face of the policy into the registry of the court *87and was discharged and dismissed from the case. In Harris v. Travelers Insurance Co. (D.C.Pa.) 40 Fed. Supp. 154, the court states the law under the federal interpleader statute, 28 U.S.C.A., §41 (26), which is similar to Rule 22, R.C.P., Colo. Counsel for plaintiff urge that section 18 of the Code of Civil Procedure applies in this case, rather than rule 22, supra. Under either, I believe the action taken by the trial court was proper and conforms with the opinion in Foster v. Kragh, 106 Colo. 249, 103 P. (2d) 480.
As suggested in interpleader’s brief, the very result in the trial court justified the action of interpleading, the bulk of the fund being awarded to a cross-defendant. The trial court entered two different judgments. This court has now taken two absolutely conflicting positions. Not only could there have been a genuine doubt as to the relative merits of the claims of the parties involved, but there could also have been a genuine doubt as to the rule which might be adopted in this jurisdiction where, up to the present, none has been announced; and the contention of plaintiff, in petition and brief for rehearing, that Moore v. Hendley, supra, was controlling presents a clean issue of both parties claiming to be designated beneficiaries under the policy. I see no element of collusion by reason of Metropolitan interpleading in this case; nor do I believe the allowance of $25 counsel fee was such an amount as to encourage the action taken by interpleader.
The majority opinion now grounds its action in denying interpleader on Pouch v. Prudential Insurance Co., 204 N. Y. 281, 97 N.E. 731, Ann. Cas. 1913C. 1191. But the interpretation which it adopts is rejected by a later decision of the same New York court. In Rosen v. Equitable Life Assurance Society, 289 N.Y. 333, 45 N.E. (2d) 899, which is largely given over to a discussion of the Pouch case, appears the following passage:
“The gist of the decision in Pouch v. Prudential Ins. Co. (Supra), [204 N.Y. 286, 97 N.E., p. 733, Ann. Cas. *881913C. 1191] lies in the phrase on p. 286: ‘While it has never been held that it is necessary to sustain an inter-pleader to show that a claimant will probably succeed in establishing his claim, a mere assertion of claim by another without alleging anything whatever on which to base it is not enough.’
“In that case, as we have said, there was not only a complete failure to show that there was any substance to the claim made by the administratrix of the insured, but it appeared affirmatively that the rights of the plaintiff as beneficiary of the policy were not questioned. The problem there presented was whether a defendant who did not question the right of the plaintiff to recover a debt admittedly due from the defendant could withhold payment to the plaintiff upon the bald assertion that a claim for the debt had been made by a third party, and could obtain an order substituting the third party as defendant in his place without showing any possible basis for the claim of the interpleaded defendant. Here the problem is quite different. In the case we are now reviewing the plaintiffs right to recover is seriously questioned not only by the defendant insurance company but by another claimant for the same debt. Concededly the defendant could not pay the plaintiff without strong probability that it would be compelled to pay the same debt also to the other claimant.”
The foregoing words are equally pertinent in pointing the difference between the Pouch case and the instant case.
Furthermore, the Pouch decision was based upon section 820 of the Code of Civil Procedure of New York, which is not in effect in this state. Is it to be inferred that the majority opinion has adopted section 820 of the Code of Civil Procedure of New York and obliterated the Colorado rules governing interpleader, as well as overruling various Colorado decisions relating to inter-pleader? Mosquito Gold Mines, Inc. v. London-Butte *89Gold Mines Co., 96 Colo. 536, 45 P. (2d) 175; Mason v. LeClair Mines Co., 88 Colo. 381, 296 Pac. 543; Johnson v. National Sugar Mfg. Co., 88 Colo. 404, 297 Pac. 995; Foss v. First National Bank, 3 Fed. 185, affirmed Bissell v. Foss, 114 U.S. 252.
Having ruled on the merits in favor of Mattie Jenkins and calling her the true beneficiary, the majority now beg the question by saying that there could have been no other disposition of the case and therefore the inter-pleader was an idle and frivolous thing, entirely overlooking the facts that (1) they once held otherwise, (2) as did the trial judge, and (3) a minority of the court are presently even more convinced than ever that this case is being wrongly decided.
The quotation from 30 Am. Jur., p. 222, in the majority opinion does not seem to be in point when one reads the whole paragraph which is taken from an annotation in 108 A.L.R. 272. The cases cited in the latter work, including Midland Co. v. Bank, 92 Colo. 558, 22 P. (2d) 860, show their inaptness to the present circumstances.
It should also be noted that this question of the right to interplead, although argued in the brief of plaintiff’s counsel on rehearing, was not specified as error in the petition for rehearing.
I believe that that part of the judgment discharging Metropolitan from the case (after it had paid $403.44 into the registry of the court) and allowing it $25 for counsel fees and $5.00 costs out of the fund, should be affirmed.
For the reasons above set forth, I believe the judgment of the trial court disposing of the balance of the insurance fund paid into the registry of the court should be modified with directions to enter judgment for the full amount of the balance of the fund in favor of T. G. Granberry as administrator of the estate of William D. Wade deceased.
*90But this above all, whether the administrator or Jenkins is the beneficiary—and no matter which horn of that argument is taken—the expenses of the last illness and funeral should be paid. This makes Wade an honest and just man, which I believe he was. For it is my opinion that in spite of any actual or attempted change of beneficiary, he was still using his policy for the purpose for which it was originally issued. “The purpose of these policies [industrial],” as stated in Metropolitan Life Ins. Co. v. Nelson, 170 Ky. 674, 186 S.W. 520, L.R.A. 1916F 461, Ann. Cas. 1918B, 182, “is not to create a fund for the future support and maintenance of the insured’s family, but to provide a fund with which the insured may procure care in his last sickness and a respectable burial.” See also 14 Tulane Law Review 114, etc.; 32 Columbia Law Review 1185.
Mr. Justice Knous joins in this dissenting opinion.