Court Opinion

ID: 4934583
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:12:58.324732+00
Date Added: 2024-06-11T08:14:37.395272
License: Public Domain

Libbey, J.
This is a bill of interpleader brought by the National Life Insurance Company against Abram Haley, administrator pf the estate of Charles J. Haley, deceased, and Wm. C. Palmer, administrator of the estate of Julia A. Haley, deceased, to try the title to the insurance of one thousand dollars, by a life policy issued by the complainant on the life of said Charles J. Haley.
A decree was made requiring the said Abram Haley and Palmer to interplead, and upon the pleadings being filed the case was tried at nisijprius, and the presiding judge with the aid of special findings by a jury, found the facts as follows :
The orator on the twenty-ninth day of March, 1869, issued its policy of insurance No. 4,091, for the sum of $1,000, upon the *271life of diaries J. Haley, payable upon his death, to bis wife Julia A. Haley, her heirs, executors, administrators, or assigns, requiring quarter yearly premiums of $4.88 ; and during the life of said Julia, she paid the premiums amounting to $165.92, and that upon her death in March, 1877, in order that the said Charles J. Haley might acquire to his own use the benefits of said policy of insurance, he and the orator contrived together to allow said policy to lapse from non-payment of premiums, and then said company issued to said Charles J. Haley a new” policy of insurance for the same amount, requiring the same quarterly premiums, payable to said Charles, or his legal representatives, dated October 12th, 1877 ; numbered 32,705. That upon said new policy the said Charles paid in premiums the sum of $78.08, and died in September, 1881 ; that policy No. 4,091 was not given or assigned to Charles J. Haley; that Julia A. Haley had an interest in that policy at the time of her decease; that the heirs of Julia A. Haley had an interest in policy No. 32,705 and that there was other consideration for that policy besides what was expressed in it, the policy No. 4,091 being a part of said consideration.
The judge thereupon decreed among other things, that the insurance be divided between the said claimants in the proportions of the amounts of premiums paid by said Julia A. and Charles J. Haley.
Upon this part of the decree the whole contention between the parties arises; Palmer claiming that the estate of Charles J. is entitled to the whole amount of the policy, or at least to said sum less the amount of premiums paid by Julia A. for which amount her heirs, by the terms of the first policy, were entitled to a paid up policy, while on the other side it is claimed that the estate of Julia A. is entitled to the whole sum insured.
We think the decree below, on the facts of this case is correct. The first question that arises is, was policy No. 4,091 forfeited by the devices resorted to by the insurance company and Charles J. Haley, so that the heirs of Julia A. Haley no longer had any interest in the insurance? We think not. Charles J. Haley and the insurance company had no legal power by direct agreement *272to change the beneficiaries named in the policy. This proposition is too well settled to require citation of authorities. They could not accomplish indirectly by the means resorted to, without the knowledge or consent of the heirs of Julia A. what they had no power to do by direct agreement. No such knowledge or consent is shown.
We are aware that there is an apparent conflict among the authorities upon this subject. But we think an examination of the decided cases will show that the apparent conflict arises more out of the variant facts acted on by the courts in the different cases, than from any essential difference in the principles of law applied to them. But if there is a real conflict we think there is a decided preponderance of authority in support of the rule we apply to this case. The question was very carefully and ably considered in Barry v. Brune, 71 N. Y. 261, in which the facts raised the same question under consideration, and the court held that the means used to cause the first policy to lapse, and a new one to be issued of like tenor, excepting the name of the beneficiary, were ineffectual to extinguish the right of Mrs. Barry, the beneficiary named in the first policy, to the insurance. In the opinion of the court, Earl, J., says, "It is clear that the old policies were the consideration of and inducement to, the new policies. The new policies could not have been obtained but for the possession and surrender by Bruñe of the old policies, and the premiums upon the new policies were paid, in part, by a cash dividend due upon one of the old policies. Bruñe thus, by means of the possession of the old policies, Avhich belonged to the plaintiff and by using and surrendering them, obtained the new policies: The real substance of the transaction was a substitution of the new policies for the old, for the purpose of getting the security which the old did not give him ; under the circumstances of this case both upon reason and authority, the substituted policies, in equity, simply take the place of the old policies and the money payable thereon must go to the party entitled under the old policies. For this conclusion there is abundant reason and authority.” The same rule is held in Chapin v. Fellowes, 36 Conn. 132; Lemon v. The Phoenix Life Ins. Co. 38 Conn. *273294, and Timayenis v. Union M. L. Ins. Co. Circuit Court U. S. Southern Dist. N. Y., reported in Fed. Rep. vol. 21, No. 4, p. 223. In the latter ease the facts were similiar to this case, except that the beneficiary did not procure the first policy and paid no part of the premiums.
The attempt to change the beneficiary named in the first policy being ineffectual the remaining question is how shall the sum due on the policy be divided ? Courts have generally held that the beneficiary named in the first policy is entitled to the whole, but we think the facts in this case are, to some extent, different from those acted on by the courts which have so held. So far as we have observed where it has been so held the facts were such that the beneficiary might well expect that the premiums were being paid by the person who had commenced paying them. In this case,» prior to the death of Julia A. Haley, the premiums had all been paid by her. After her death her heirs had no reason to expect that Charles J. Haley would pay them. He was in no way liable for them. He paid them under a claim that he should have the benefit of them. This the heirs of Julia A. might have known in the exercise of due diligence in their affairs. What they might have learned in the exercise of due diligence equity will treat them as knowing. The insurance, then, was earned by the premiums paid by Julia A. Haley, for the benefit of herself and her heirs, and by the premiums paid by Charles J. Haley after her death for his own benefit. Upon the facts of this case we think the rule adopted by the court below is in accordance with the equitable rights of the parties, and that the fund should be divided between the two estates in proportion to the amount of premiums paid by each intestate. This is the rule adopted by Wallace, J., in Timayenis v. Union M. L. Ins. Co. supra.

Decree below affirmed.

Peters, C. J., Walton, Virgin, Emery and Haskell, JJ., concurred.