Court Opinion

ID: 6565975
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:19:48.656765+00
Date Added: 2024-06-11T15:56:42.567487
License: Public Domain

Mr. Justice Gabbeet
dissenting:
The majority opinion is based upon the assumption that the interest of the beneficiary named in the policy could only be divested in the manner prescribed in the policy. In a limited sense this is correct: That is to say, in order to substitute another beneficiary, on the face of the policy the manner specified in the policy on the subject must be substantially followed; but substitution *192of a beneficiary on tbe face of a policy, and an assignment and delivery of it to a third person are, as stated in Block v. Valley Mutual Insurance Association, entirely different propositions.
Bef erring to the complaint: We find the real question upon which the case turns is whether Mrs. Johnson is entitled to the proceeds of the policy, not as a beneficiary substituted on its face, but as assignee or donee. According to the complaint it is alleged in substance that the insured delivered the policy of insurance to her; that the purpose of such delivery was to provide that in the event of his death the proceeds of the policy should be paid to her for the maintenance of herself and their infant child Katherine; that the policy from that time remained in her possession until the death of her husband; and that after such transfer and delivery she assisted out of the proceeds of her labor in paying premiums on the policy. In brief, these averments are that the insured transferred and delivered to her the policy as a gift, with the intent that the proceeds in the event of his death should be paid to her for her maintenance and the maintenance of their infant child, and that for the purpose of keeping the policy in full force and effect she thereafter assisted in paying the premiums out of her own earnings.
The very object of life insurance is to provide a fund for those dependent upon the insured in the event of his death, and this object should be carried into effect when possible.—Mutual L. I. Co. v. Lowther, 22 Colo. App. 623, 126 Pac. 882.
It was certainly the intent of the insured to provide for his wife and child, and that this intent can be given effect is apparent from a discussion of the following-propositions :
*1931. The interest of Mrs. Swanson in the policy.
2. The control of the insured over it.
3. The interest acquired by Mrs. Johnson.
4. ' There is no provision in the policy which Mrs. Swanson can invoke which will defeat that interest.
1. A policy of insurance does not create a vested interest in the beneficiary during the lifetime of the insured when by the terms of the policy the insured reserves the right to change the beneficiary. Under such a provision the right of the beneficiary vests conditionally, not absolutely, and the insured, without the knowledge or consent of the beneficiary, may designate another, for the reason that the right of the person named in the policy as beneficiary is subject to be defeated by the terms of the contract naming him as such. In other words: This is a condition of the contract and his right therefore is subject to it.—Hopkins v. N. W. Ins. Co., 99 Fed. 199, 40 C. C. A. 1; Mut. L. I. Co. v. Twyman, 122 Ky. 513, 92 S. W. 335, 97 S. W. 391, 121 Am. St. Rep. 471; Hopkins v. Hopkins, 92 Ky. 324, 17 S. W. 864; Atl. M. L. I. Co. v. Gannon, 179 Mass. 291, 60 N. E. 933; Martin v. Stubbings, 126 Ill. 387, 18 N. E. 657, 9 Am. St. Rep. 620; Delaney v. Delaney, 175 Ill. 187, 51 N. E. 961; Splawn v. Chew, 60 Tex. 532; Fuos v. Dietrich (Tex. Civ. App.), 101 S. W. 291; McNeil v. Chinn, 45 Tex. Civ. App. 551, 101 S. W. 465; Knights of Honor v. Watson, 64 N. H. 517, 15 Atl. 125.
In this jurisdiction this rule has been at least indirectly recognized as correct in the following cases: Rollins v. McHatton, 16 Colo. 203, 27 Pac. 254, 25 Am. St. Rep. 260; Love v. Clune, 24 Colo. 237, 50 Pac. 34; Pittinger v. Pittinger, 28 Colo. 308, 64 Pac. 195, 89 Am. St. Rep. 193; Hill v. Groesbeck, 29 Colo. 161, 67 Pac. 167; Denver L. I. Co. v. Crane, 19 Colo. App. 191, 73 Pac. 875; Mutual L. I. Co. v. Lowther, supra.
*1942. Mrs. Swanson did not have a vested interest in the policy, hut only an expectancy. The only limitation imposed upon the insured was with respect to the substitution of another beneficiary on the face of the policy; consequently it must follow that his control over the policy subject to this one limitation was as absolute and complete as though he had been the beneficiary himself or the policy had been payable to his estate.—Denver L. I. Co. v. Crane, supra.
3. In the complaint it is alleged that the insured delivered the policy to the plaintiff in circumstances from which it may well be inferred that he delivered it to her as a gift which she thereafter retained in her possession, so that the important question is, did the transfer and gift of the policy by the insured to the plaintiff by parol assignment and delivery under the facts narrated in the complaint deprive Mrs. Swanson of all right and interest therein? That transaction did not designate the plaintiff the beneficiary in the manner or of the character required and contemplated by the policy, but rather thereby her relation to the policy became that of assignee or donee. The insurer recognized that the policy could be assigned, for in the paragraph headed “Change of Beneficiary” it is recited in substance that the insured may change the beneficiary by written notice to the company, provided the policy is not then assigned. The policy provided that it could be assigned by a written assignment, but policies of insurance are choses in action, and like any other choses in action may be the subject of a gift and assigned by delivery. They are usually assigned in writing, but verbal assignment and delivery of a policy for a valuable consideration, or to one having an insurable interest in the life of the insured, gives to the assignee an equitable right to the proceeds, where the policy itself contains no provision to the contrary. Chapman v. McIlwrath, 77 Mo. 38, 46 Am. Rep. 1; Appeal *195of Madeira (Pa.), 4 Atl. 908; Embry’s Adm’r v. Harris, 107 Ky. 61, 52 S. W. 958; Hogue v. Minn. Packing Co., 59 Minn. 39, 60 N. W. 812; Hewins v. Bacon, 161 Mass. 320, 37 N. E. 441; Lord v. N. Y. Life Ins. Co., 95 Tex. 216, 66 S. W. 290, 56 L. R. A. 596, 93 Am. St. Rep. 827; Marcus v. St. L. Mutual L. I. Co., 68 N. Y. 625; Brown v. Mansur, 64 N. H. 39, 5 Atl. 768; Opitz v. Karel, 118 Wis. 527, 95 N. W. 948, 62 L. R. A. 982, 99 Am. St. Rep. 1004; Griffin v. Prudential Ins. Co., 43 App. Div. 499, 60 N. Y. Supp. 79; Phipard v. Phipard, 55 Hun. 433, 8 N. Y. Supp. 728; Barron v. Williams, 58 S. C. 280, 36 S. E. 561, 79 Am. St. Rep. 840; Hani v. Germania L. I. Co., 197 Pa. 276, 47 Atl. 200, 80 Am. St. Rep. 819; Travelers’ Ins. Co. v. Grant, 54 N. J. Eq. 208, 33 Atl. 1060; McNeil v. Chinn, supra; McGlynn v. Curry, 82 App. Div. 431, 81 N. Y. Supp. 855.
4. It appears that Mrs. Swanson had no interest in the policy; that the insured had the absolute right to make any disposition of it he saw fit, subject only to the one limitation noted; so that the only remaining question to consider is whether or not there is any provision in the policy which prevented the husband giving it to his wife that Mrs. Swanson can invoke. The only provision in the policy that can possibly affect the rights of the plaintiff is as follows:
“Any assignment of this policy must be made in duplicate and both sent to the home office, one to be retained by the company and the other to be returned. The company has no responsibility for the validity of any assignment.”
It will be observed that this provision does not say that the failure to assign in the manner designated shall render the assignment void, vitiate the policy, or that it shall not take effect until the assignment is lodged with the company, or that any penalty whatever attaches for failure to assign as the policy directs. Attention has *196been called to the fact that the company recognized the policy might be assigned by the provision under the head of “Change of Beneficiary,” where it is stated a beneficiary may be substituted provided the policy is not then assigned. This provision was not intended to prevent the original beneficiary being changed after assignment, but its purpose was to excuse the company from designating another after the policy had been assigned, as the insured, after assignment, would have lost such control and dominion pver the policy as would preclude him from making any disposition of it thereafter to the detriment of the assignee, so that to protect, the company as well as the rights of the assignee it was provided in the policy how the assignment should be made; hence it is apparent that the provision relative to the assignment is not for the benefit of the beneficiary, and Mrs. Swanson cannot raise an objection to the disposition of the policy by the insured, which he can lawfully make by way of a gift or assignment, when it contains nothing which inhibits the insured as against her contingent rights from making such a disposition of the policy except by following the conditions of the policy in this respect. The most that can be claimed for the provision relative to an assignment of the policy is that it is for the benefit and protection of the company. To what extent it might raise questions when this provision is not followed, is not before us, as the company raises no question on this score, but has assumed the commendable attitude of offering to pay the proceeds of the policy into court with the request that the court determine which of the claimants is entitled thereto. Any irregularity, then, in the assignment of the certificate or policy is not a matter of which Mrs. Swanson can complain. Martin v. Stubbings, supra; Fuos v. Dietrich, supra; Marcus v. St. L. M. L. I. Co., supra; Opitz, v. Karel, supra; Griffin v. Prudential Ins. Co., supra; Richardson v. White, 167 Mass. 58, 44 N. E. 1072; *197Titsworth v. Titsworth, 40 Kan. 571, 20 Pac. 213; Schardt v. Schardt, 100 Tenn. 276, 45 S. W. 340; Embry’s Adm’r v. Harris, supra.
In brief, the views of the writer are that the interest of Mrs. Swanson in the policy was merely contingent; that this contingent interest did not prevent the insured from assigning and delivering the policy without her knowledge or consent; that the only limitation over the control of the policy by the insured was that if he designated a beneficiary on the face of the policy he could only do so by a substantial compliance with the conditions of the policy on this subject; that in all other respects his control over the policy was absolute; that having full authority to assign the policy, his delivery of it to his wife divested Mrs. Swanson of all interest therein, and that while this assignment according to the terms of the policy should have been evidenced by writing, this pro-' vision was for the protection of the company, and the noncompliance therewith cannot be taken advantage of by Mrs. Swanson. These conclusions do not in any manner conflict with the decision of this court in Rollins v. McHatton. In the case at bar the facts under consideration and the provisions of the policy are essentially different from that case. It was determined solely upon the proposition that a change of beneficiary upon the policy must be made in the manner the policy directed unless the insured was excused after an attempt to make such change by the happening of events over which he had no control. The policy does not appear to have contained any provision regarding an assignment, nor was the question of assignment of the policy considered, and according to the terms of the policy was not involved. It expressly declared that upon the death of the insured the sum mentioned should be paid to his wife “or to such person or persons as he may subsequently direct by change of beneficiary entered upon the record of the *198Supreme Secretary of the Endowment Bank. ’ ’ After the death of the wife the insured deposited the policy with the guardian of his minor son, with instructions to hold it for his benefit. This was held insufficient to effect a change of beneficiary for the reason that according to the terms of the policy no person other than the one originally named as beneficiary was entitled by direction of the insured to the proceeds of the policy unless entered upon the record of the supreme secretary. In the case at bar the policy provides how it may be assigned and that ‘ ‘ The insured having reserved the right may change the beneficiary or beneficiaries at any time during the continuance of this policy by written notice to the company at the home office, provided this policy is not then assigned,” thus recognizing that the policy may be assigned and reserving to the insured the right to make .such assignment. This feature of the policy clearly distinguishes it from the one considered in the Rollins case. Aside from this, the question of the parol gift of the policy was not discussed, but the decision was rendered upon the one proposition that a change of beneficiary was not valid unless made in the manner the policy provided.
No doubt there are authorities holding contrary to the views herein expressed, and that there are also expressions in cases when taken alone which support the views of the majority opinion, but many of them at least were made in cases where the facts are essentially different from the one at bar.
As previously stated, the intent of the insured when possible should be given effect. This should never be lost sight of when construing a policy for the purpose of ascertaining the control of the insured over it. In justice and equity the proceeds of the policy should be paid to the wife. - She assisted in creating this fund by paying the premiums out of her own earnings. The mother has *199never contributed a dollar towards bearing these expenses, and yet by the construction given the policy she reaps the benefit of the savings of the wife, and takes that which the son intended should be paid to the wife. Of course these results cannot be complained of if by the terms of the policy the law requires the proceeds to be paid as directed, but in the judgment of the writer the policy can and should be given that construction which will result in giving the proceeds, arising from it to the one justly entitled thereto.
The judgment of the district court should be reversed, and the cause remanded with instructions to enter judgment in favor of Mrs. Johnson.
The writer is authorized to state that Mr. Justice Scott concurs in this opinion.
Decided November 3, A. D. 1913. Eehearing denied February 2, A.. D. 1914.