Court Opinion

ID: 9778736
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:18:07.831077+00
Date Added: 2024-06-11T07:33:12.870491
License: Public Domain

MURRAY, Chief Justice.
I do not concur in the opinion of the majority and here give the reasons for my dissent. The majority seem to base their opinion upon the following statement:
“Under the general rule, which is followed in Texas, where the person designated as beneficiary pays the premiums pursuant to an agreement that he shall remain the beneficiary or receive the proceeds of the policy, such person acquires a vested right in the policy regardless of whether the assured retains the right, under the terms of the policy, to change the beneficiary. 46 C.J.S. Insurance § 1176; Appleman, Insurance Law and Practice, § 922; Smith v. Schoellkopf, Tex.Civ.App., 68 S.W.2d 346, no wr. hist.; Locomotive Engineers’ Mutual Life & Accident Ins. Ass’n. v. Waterhouse, Tex.Civ.App., 257 S.W. 304, wr. ref.; Eatman v. Eatman, Tex.Civ.App., 135 S.W. 165, no wr. hist.
“In Smith v. Schoellkopf, supra, the rule was stated: ‘The authorities support the view that an insured person, who, for a valuable consideration, has so contracted, cannot at will rescind his contract and designate another beneficiary, even though the policy contains stipulations authorizing such change. The collateral agreement between the assured and the person with whom he has contracted is *296binding upon the assured upon the principle of estoppel.’”
I readily agree to these statements of the law, but the trouble is that the affidavit of Aurelio Leal filed herein shows that he and Ramon Leal consented to- make Aurelio beneficiary if he would pay the premiums and nothing more. Ramon did not agree to make Aurelio his irrevocable beneficiary; Ramon did not agree that at his death Aurelio should have the proceeds of the policy or anything of that kind, but he reserved, in the insurance policy itself, the right to change the beneficiary, which fact Aurelio knew, or should have known, because he was in possession of the policy.
A mere beneficiary under a policy containing a right on the part of the insured to change the beneficiary, has no vested right in the proceeds of the policy prior to the death of the insured. McDonald v. McDonald, 212 Ala. 137, 102 So. 38, 36 A.L.R. 761; Vol. 2, Revised, Appleman, Insurance Law and Practice, § 921, p. 505.
Equities may arise in favor of the beneficiary named in the policy which will deny the insured the right to change the beneficiary, but here it would seem that the equities are the other way. Ramon took out the policy on December 28, 1964, and died with cancer on April 19, 1965, after Aurelio had paid only three or four premiums, none of which were paid after the change of the beneficiary. During the time Aurelio was paying the premiums he was the beneficiary. The change in beneficiary was from insured’s brother to his own daughter.
As to the holding that there was a contract based upon a consideration between the two brothers for the payment of the premiums, it is clear that the majority are in error in so holding. The consideration referred to in this line of decisions relates to a consideration passing from the beneficiary to the insured. There was no consideration passing from Aurelio to Ramon. Ramon got nothing out of this transaction if he did not have the right to change his beneficiary. Aurelio paid Ramon nothing to take out this policy of insurance. Ramon would get nothing while living and nothing at his death. If it be true, as stated by the majority, that Ramon had no interest in the policy, not even the right to change his beneficiary, what difference could it make to him whether the premiums were paid or not. Lovinger v. Garvan, 2 Cir., 270 F. 398; Thomson v. Thomson, 8 Cir., 156 F.2d 581; Vol. 2, Revised, Appleman, Insurance Law and Practice, § 922, p. 514.
A case I regard as being very much in point is Novosel v. Sun Life Assur. Co. of Canada, 49 Wyo. 422, 55 P.2d 302, rehearing denied, 57 P.2d 110.
I respectfully dissent from the opinion of the majority.