Court Opinion

ID: 3401951
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:13:45.976329+00
Date Added: 2024-06-11T12:26:39.208059
License: Public Domain

1. Where the beneficiary in a life-insurance policy entered into a written contract with another person, agreeing that she would transfer and assign to that person all of her right, title, or interest in the policy, in extinguishment of a debt which she owed to the transferee, and for other valuable considerations moving from the transferee to her, and, as a result of this agreement and other writings signed by such original beneficiary and the insured, the policy was so changed by the insurer as to designate such other person as beneficiary, on interpleader after the death of the insured the original beneficiary could not avoid the contract between her and the substituted beneficiary, on grounds of *Page 594 
duress and conspiracy, without obtaining the equitable relief of cancellation, and as to such relief she would be subject to the rule that he who would have equity must do equity. The evidence showed without dispute that she had not complied or offered to comply with this rule in any respect; and there being no evidence that such an offer, if made, would have been rejected, she was not entitled to recover as against the substituted beneficiary upon any theory relating to duress or conspiracy.
2. There was no evidence that the contract of assignment between the original and the substituted beneficiary constituted a wager on the part of the latter, or was intended as a cover therefor.
3. Under the preceding rulings, the court did not err in directing the verdict in favor of the substituted beneficiary.
                     No. 14224. SEPTEMBER 22, 1942.
In 1923 a policy of insurance in the sum of $3000 was issued on the life of Hugh B. Hodo, in which Claribel B. Hodo, then his wife, was named as beneficiary. The premiums amounted to about $15 for each three-months period. Mrs. Hodo obtained a divorce, in 1935, and with it a decree restoring her maiden name, Claribel Bray. The insured, after suffering from tuberculosis for several years, died in November, 1941. Notwithstanding the divorce, Miss Bray continued friendly with the insured, and aided him financially and otherwise until June 28, 1941. She was on that date the designated beneficiary, and the insured had no right to change the beneficiary without her consent, having assigned all of his interest in the policy to her. She had paid the premiums most if not all the time since it was issued. During the last year or two of his life, Hodo boarded with Mrs. Leila M. Malcolm, who maintained in Atlanta a boarding-house for people who were afflicted as he was. It was at Miss Bray's instance that Hodo began boarding with Mrs. Malcolm, and she personally paid his board for a while. Later it was paid by a charitable organization, but he also needed medicines and personal articles, and she arranged with Mrs. Malcolm to furnish these on her promise of reimbursement. In the latter part of June, 1941, Miss Bray was indebted to Mrs. Malcolm $48.60 for medicines and supplies so furnished to the insured at Miss Bray's instance. Demand for payment was made, and as a result Miss Bray agreed to assign her interest in the policy in extinguishment of the debt and for other considerations hereinafter mentioned. The agreement was in writing, and was signed by both the parties. Other writings were signed by Miss *Page 595 
Bray and the insured, on basis of which the insurer was authorized to change the policy so that it would substitute Mrs. Malcolm as the beneficiary, and this was done.
After death of the insured in November, 1941, the sum payable under the policy (about $2500, after deducting a loan in favor of the insurer) was claimed by both Miss Bray and Mrs. Malcolm. In view of these conflicting claims the insurer filed a suit in equity, praying that the adverse claimants be required to interplead, and tendering the sum into court. The respondents answered, asserting their separate claims; and the case proceeded solely as a contest between Miss Bray and Mrs. Malcolm, as to which of them was entitled to the money. After the introduction of evidence the court directed a verdict in favor of Mrs. Malcolm. Miss Bray excepted, assigning error on that ruling, insisting that there were issues of fact which should have been submitted to the jury.
There is no contention by Miss Bray that she did not owe Mrs. Malcolm $48.60 for medicines and the like; but it is insisted that the agreement between them, and the other writings which resulted in the substitution of Mrs. Malcolm as beneficiary, were invalid for the following reasons: (1) They were obtained by duress, in that Mrs. Malcolm threatened to throw the insured into the street unless the indebtedness was paid. (2) They were the result of a conspiracy between Miss Bray's own attorney and Mrs. Malcolm; and (3) since Mrs. Malcolm had no interest in the life of the insured, the agreement was a wagering contract on her part, and was void as contrary to public policy.
The pleadings and the evidence showed the facts stated above, and additional facts and circumstances as follows: The contract of June 28, 1941, between Miss Bray and Mrs. Malcolm, contained the following stipulations: Miss Bray agreed to assign to Mrs. Malcolm all her right, title, and interest in the policy, in consideration of the agreement of Mrs. Malcolm to cancel all indebtedness which she held against Miss Bray, amounting to $48.60, to continue to furnish all necessary medicines and medical attention to the insured during the remainder of his life, and after his death to pay his funeral and burial expenses to the amount of $475, to pay all premiums on the policy accruing before his death, and to relieve Miss Bray of "all responsibilities for the care, nursing, and comfort of said Hugh B. Hodo as long as he shall live." Miss *Page 596 
Bray, being at that time the designated beneficiary, also executed a "release and re-assignment" of the policy; and the insured requested in writing that the insurer designate Mrs. Malcolm as beneficiary. The company then placed upon the policy an entry to the effect that all prior designations were revoked, and that "Leila M. Malcolm is designated as direct beneficiary."
Miss Bray in her answer assailed the alleged contract between herself and Mrs. Malcolm, and "the purported assignments made in pursuance thereof," as invalid for the reasons above stated, and prayed that they be canceled and rescinded. She prayed to recover from the insurance company and Mrs. Malcolm the proceeds of the insurance policy as deposited in court; and for general relief.
Mrs. Malcolm sought to recover as the beneficiary finally designated, and relied also on the contract of assignment and the other writings to which reference has been made. Other facts are stated in the opinion.
1. The plaintiff in error was the beneficiary in a life-insurance policy, and the insured, who was her divorced husband, had also assigned all of his interest in the policy to her. On basis of a written agreement between her and Mrs. Malcolm, and other writings signed by her and the insured, the policy was so changed as to substitute Mrs. Malcolm as the beneficiary. Unless the agreement was a wagering contract, it was based upon valuable considerations, consisting in part of extinguishment of a debt owed by Miss Bray to Mrs. Malcolm. The existence of the debt is admitted. The other considerations consisted of promises by Mrs. Malcolm to pay all future premiums on the policy, to furnish all necessary medicines and medical attention to the insured during the remainder of his life, to relieve Miss Bray of all responsibility for his care, nursing, and comfort so long as he should live, and after his death to pay his funeral and burial expenses to an amount specified. There is no contention that Mrs. Malcolm did not fully perform her part of the agreement precisely as she promised to do. The insured having died and the proceeds of the policy being in court under an interpleader, the judge directed a verdict in favor *Page 597 
of Mrs. Malcolm. The question is whether there were issues of fact that should have been submitted to the jury.
In the circumstances, Miss Bray could not recover as against Mrs. Malcolm without avoiding the written agreement and "the purported assignments" on some ground. Two of the three grounds on which she sought to avoid them were duress and conspiracy. She could not avoid them in equity on either of these grounds without obtaining the relief of cancellation; and since she would thus require affirmative equitable relief, she was bound by the rule that he who would have equity must do equity. Under this rule, before she would be entitled to recover, it would be incumbent on her to pay or tender to Mrs. Malcolm the amount of the debt which she owed to her, and otherwise restore or offer to restore the original status. The evidence showed that she did not do or offer to do equity in any respect, and there was nothing to show that such an offer if made would have been rejected. It follows that she could not recover on the basis of either duress or conspiracy. Code, § 37-104; Williams v. Fouche, 157 Ga. 227
(121 S.E. 217); Cooper v. Peevy, 185 Ga. 805
(196 S.E. 705); Oliver v. Slack, 192 Ga. 7 (14 S.E.2d 593);Georgia Baptist Orphans Home Inc. v. Moon, 192 Ga. 81
(14 S.E.2d 590).
2. "The insured may direct the money to be paid to his personal representative or to his widow, his children, or his assignee. Upon such direction given, and assented to by the insurer, no other person may defeat the same." Code, § 56-903. "One has the right to procure insurance on his own life and assign the policy to another, who has no insurable interest in the life insured, provided it be not done by way of cover for a wager policy." Rylander v. Allen, 125 Ga. 206
(53 S.E. 1032, 6 L.R.A. (N.S.) 128, 5 Ann. Cas. 355). While the insured in the instant policy had no right within himself to direct a change in the beneficiary at the time he requested the company to designate Mrs. Malcolm, Miss Bray and the insurance company both assented, and the change was made accordingly. There was no evidence that the contract of assignment between Miss Bray and Mrs. Malcolm, or any writing that was afterwards executed in pursuance thereof, was intended to effectuate any unlawful purpose. On the facts appearing, the agreement between the parties was not a wagering contract; and this is true even though it was agreed by Mrs. Malcolm that *Page 598 
she would pay future premiums for the purpose of keeping the policy in force, and would do other things for the benefit of the insured and Miss Bray. See Union Fraternal League v. Walton,109 Ga. 1 (34 S.E. 317, 46 L.R.A. 424, 77 Am. St. Rep. 350);Ancient Order United Workmen v. Brown, 112 Ga. 545
(37 S.E. 890); Clements v. Terrell, 167 Ga. 237 (145 S.E. 78);Hawkes v. Mobley, 174 Ga. 481 (163 S.E. 494); Adcock v.Mandeville Mills, 182 Ga. 244 (2) (185 S.E. 288).Interstate Life  Accident Co. v. Frazier, 40 Ga. App. 811
(2) (151 S.E. 529); National Life  Accident Co. v.Hankerson, 49 Ga. App. 350 (3) (175 S.E. 590). The case differs on its facts from Turner v. Davidson, 183 Ga. 404,409 (188 S.E. 828), where it was said that the beneficiary and the insurance agent, rather than the insured, were the persons "primarily concerned in the issuance of the policy." For the same case on second appearance, see 188 Ga. 736 (4 S.E.2d 814, 125 A.L.R. 401). Nor do other cases cited for the plaintiff in error require a different conclusion.
3. For the reasons stated above, regardless of other questions, the court did not err in directing the verdict in favor of Mrs. Malcolm.
Judgment affirmed. All the Justices concur.