Court Opinion

ID: 7192131
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:58:15.959855+00
Date Added: 2024-06-11T16:16:13.143630
License: Public Domain

On Application for Rehearing.
The opinion of the Court was delivered by
Fenner, J.
In this case briefs have been filed in support of the •application for rehearing not only by the original able counsel of the -Insurance Company, but also by distinguished counsel of the City of New York, whose ability and learning have been enlisted to press the •application with all possible force. These briefs are so elaborate, and have so completely exhausted all resources of reasoning and learning which could sustain the relief applied for, that we feel safe in resting ■our final determination on the arguments and authorities therein contained, which we have now considered and weighed as fully as if the •present were a decision of the case in the first instance. Our convictions ■remain unshaken as to the correctness of all the propositions on which' •our original opinion rests.
*3301st. Mrs. Pilcher had such vested interest in the policy, as thebeneficiafy thereof, as disabled her husband from assigning or disposing" of it without her consent.
To the extent of the premiums which had been paid by Pilcher for her benefit, and of the valuable interest in the policy resulting therefrom, the gift to her had been fully executed, and the resultant interest was her separate and indefeasible property. The additional right was-vested in her to continue the policy in force by paying future premiums,, if her husband failed or refused to do so. Eor this purpose, if not otherwise able, she would have had the right to pledge the accrued value of the policy in order to raise the means to pay future premiums. These were valuable rights of which, without her consent, her husband' had not the right to deprive her, by assigning, or disposing of, them to-others for his own benefit.
The conduct of the company and Pilcher in this transaction imports* by strong implication, a concession on their part of the existence of these rights in Mrs. Pilcher. If they had supposed that he had the absolute right, now contended for, of disposing of the policy in his sole- and at his pleasure, it is impossible to conceive that they would have resorted to the tortuous and indirect mode of accomplishing their' purposes which they actually employed.
If such an assignment had been made, it would have been illegal, null and void, and would not have divested Mrs. Pilcher’s interest • in the policy, which would have continued unimpaired as long as the-policy, by whosesoever acts, continued in force, subject of course to the-duty of refunding with interest any premiums paid by others than her husband, and inuring to her benefit.
;. It is conceded that Pilcher was not bound to continue the payment' of premiums, and that if thereby, he had suffered the policy to lapse, Mrs. Pilcher’s rights might have been forfeited. But there is a broad distinction between the right to suffer the policy to lapse, and the right J to assign and dispose of it for his own benefit. There could have been* no motive for him to permit the policy to lapse, from which event he-would have derived no benefit, and his wife would have been subjeetedto wanton injury. He would have used every exertion to avoid such a loss, or to enable his wife to avoid it; and the same considerations-which, under the transaction as made, enabled him to raise a large sum of money on the policy, would have enabled his wife to have obtained,, on the same security, the means of paying accruing premiums, and thus-keeping the policy alive. The law, by denying him the power of assigning or disposing of the policy for his own benefit, without the consent of the wife, wisely removes the temptation, to which he would otherwise be subjected, of sacrificing the interest of his wife for his own advantage-
*331We remain fully of the opinion that the legal propositions above-stated are fully sustained by the authorities quoted in the original opinion, and we think the distinctions sought to be traced between them and the instant case are shadowy and unsubstantial. We find nothing-in the New York statutes cited on which it is charged the decisions in that State rest, which is entitled to more effect than the doctrines settled by Louisiana jurisprudence in the cases quoted by us, have in the same-direction. Our jurisprudence recognizes the rights of the beneficiary wife quite as amply as do the New York statutes.
If, as held in Louisiana, in repeated decisions, the insurance by the-\ husband for the benefit of the wife, is such a valid gratuity in her favor,, as to make her right under the policy at his death her absolute and separate estate, the like effect logically attaches pro tanto to the valuable interest under the policy created by the payments of premiums-for her benefit, as the same are made; and this interest becomes likewise her separate property not disposable by the husband.
2d. We think we rightly held that the transaction between Pilcher- and the company, under which the pretended new policy was issued,, operated only as a substitute and equivalent for the prohibited assignment of the original policy, and, as between Mrs. Pilcher and the-company, is entitled to no greater effect than such illegal and void-assignment would have had. Her policy, therefore, did not lapse, but continued and was carried forward in the policy of 1871. In this position we think the authorities cited by us fully sustain us, and we consider them the best authorities on the question.
In reaching our original conclusion as to the solution of Mrs. Pilcher’s rights in the premises, we hesitated long between that adopted by ourselves and the one adopted by Chief Justice Beasley as the organ-of the court in Landrum vs. Knowles, 22 N. J. Eq., 594, where the beneficiary was allowed only an interest in the insurance to the value of the-premiums paid before the transfer. We thought, however, our own solution, based upon the New York and Connecticut decisions quoted by us, was both more logical and more equitable. We hold that the I right of the beneficiary wife in the policy could only be terminated by f its lapse. We held it never lapsed. Therefore, she was entitled to the-insurance, subject to the necessary condition of paying to the party entitled thereto the amount of the premiums and interest which had been paid for her benefit. Had the parties, who paid these premiums, been denied the benefit of the insurance, they would have had the right to reclaim them from Mrs. Pilcher, to whose benefit they had enured. But as, under the peculiar circumstances of this case, we awarded the bank the amount of the insurance, the equitable right to reclaim these pre-*332■miums passed, to the company and they were allowed as a necessary ■offset to Mrs. Pilcher’s claim for insurance.
3d. The branch of our decision upon the correctness of which we-'felt, and still feel, the least doubt, is that which maintained the estoppel, in favor of the bank, against the denial by the company of its title to ■the policy.
Our position on this subject, is not that stated by counsel, viz: •" That the policy of 1871 is in law void as to Mrs. Pilcher, but is in fact valid as to the bank because of the estoppel, etc.”
Our position is that the title to the policy is, in law, in Mrs. Pilcher, and, therefore, she is entitled to recover, and that the bank is also entitled to recover, not because it has, in truth, a legal title to the policy, but because the company, by its acts, is estopped from denying the . bank’s title.
In our original opinion we have, perhaps, not expressed ourselves with perfect accuracy, where we speak of two policies; but the whole context of the opinion explains that we considered the policy of 1871 as \ being strictly a continuation of the original policy.
The question, therefore, is not as to the validity of the policy, nor as to defenses which the company might have against it. The validity of the policy is not disputed, nor does the company pretend to have any defenses against it. The sole question involved is as to the title to the policy.
This policy belonged originally, and notwitstanding the change, continued to belong to Mrs. Pilcher. As originally executed, her title thereto appeared affirmatively on the face of the instrument. The company, by unlawful collusion with Pilcher, suppressed this original instrument, and issued a new one in lieu thereof, in which it falsely declared that the policy was Pilcher’s own, and, therefore, assignable by him. It did this, as the evidence shows, for the express purpose of enabling him, under cover of this apparent title, to raise money on the policy. It accepted his assignment thereof, and the subsequent reassignment by his first assignees to a perfectly ignorant and innocent holder, who acted upon the faith of title as represented by the company itself in the body of the instrument and as recognized by the company in all its acts. It collected from this assignee the premiums down to ■the death of the insured.
We accuse the company of no intentional wrong; but, for the pur■poses of this case, it occupies the same position as if it were a deliber- . ate and intentional wrong-doer. It was a party to unlawful acts, and, as every one is presumed to know the law, it is presumed to have known they were unlawful. By its affirmative declaration in the body of the instrument that the policy was Pilcher’s while (as is presumed) knowing, *333and unlawfully concealing, the fact that it was really his wife’s; by it» acceptance and recognition of Pilcher’s assignment and of the reassignment to the bank; and by the reception from the latter of the premiums, “ it distinctly authorized and induced the bank to accept and act upon, as true, the state of facts thus represented by itself; and it, is now conclusively estopped from denying the truth thereof, and from escaping the performance of those obligations, which result in law therefrom.
It is manifest that none of the numerous cases cited by counsel apply to such a state of case as is here presented.
The difference of facts in the case of Barry vs. Brune, 71 N. Y. 261, from the above, is apparent at a glance. There, the company, in cancelling the policies in favor of the wife and substituting therefor policies in favor of another, acted upon a direct assignment by the wife herself, which was, in fact; genuine, and which the company had no reason to believe invalid. Its conduct was perfectly lawful and innocent. It was, however, proved that the wife’s assignment had been obtained through coercion, and was, therefore, invalid. The court decreed, in consequence, that she had never parted with her interest; that the substituted policies took the place of the old policies, and that the money payable thereon must go to the party entitled under the latter. There was, of course, no shadow of ground, in that case, for holding the company liable over again to the apparent holder.
We maintain, therefore, that this case is perfect authority for our decision in favor of Mrs. Pilcher; but is no authority at all against our decision in favor of the Bank. No decision has been, nor, in our opinion, can be cited, which is opposed to the clear right of the bank under the facts here presented.
The application of Mrs. Pilcher for rehearing has no merit whatever. She has received all that the most liberal construction of her rights could possibly allow.
Rehearing refused.