Court Opinion

ID: 8746391
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:09:03.021318+00
Date Added: 2024-06-11T17:00:41.579729
License: Public Domain

GROSSCUP, Circuit Judge
(dissenting). I concur in the opinion that the policy does not fall within the provisions of section 70a relating to a cash surrender value; but am forced to dissent from that portion of the opinion which holds that in virtue of the condition of the policy relating to David Welling’s right of election upon the completion of the tontine dividend period, November 27, 1906, Mrs. Welling’s vested interest will cease, and Wclling’s right become a property which could have been transferred April 13, 1901, the date of adjudication, or which might have been levied upon and sold under judicial process against him.
The policy, on its face, contracts to pay Anna B. Welling, if living, or, if not living, the surviving children, the sum of ten thousand dollars within sixty days after satisfactory proofs of death of David Welling, subject, however, to the condition, among others, that upon the completion of the tontine period, November 27, 1906, (the policy not having been terminated previously by lapse or death) David *196Welling should .have the option: (a) to withdraw in cash the policy’s entire share-of the assets; (b) to convert such share into a paid-up policy for an equivalent amount; (c) to continue the policy in force on the ordinary plan, withdrawing the accumulated surplus in cash, or, (d) to continue the policy for the original amount, applying the tontine dividend to the purchase of an annuity for the benefit of David Welling.
Now, the law holds, that in a policy of insurance taken out by a husband on his life, making a reasonable provision for the family after his death, without intent to hinder, delay or defraud creditors, the interest of the wife vests from the moment the policy is issued, and remains vested until the policy matures, unless there is a clear provision to the contrary. The policy under consideration contains no clear contrary provision. The right of Welling to take out, at a given period, the value of the policy in cash, connected as it is with the other alternative, that the policy may continue in force on the ordinary plan, is not in itself a divestment of Anna B.' Welling’s interest. The alternative — the continuance of the policy in force on the ordinary plan — is a continuance of her vested interest as-it was previously. The effect of the contract, taken as a whole, is that the insurance company promises to pay Anna B. Welling, or the surviving children, upon the death of David Welling, the sum of ten thousand dollars, unless on November 27, 1906, David Welling shall have elected to withdraw in cash the policy’s entire share of the assets. In such a contract, the interest of Anna B. Welling, though subject at the option of David B. Welling (to be exercised November 27, 1906) to- termination, is not, in fact, terminated or divested until the option has been exercised.
Assuming then, that Anna B. Welling has a vested interest in the policy, not terminable November 27, 1906, unless David B. Welling elects to take out in cash the policy’s share of the assets, it is clear to me that such right of election is one not transferable, or subject to levy upon-judicial process. If the subject matter of the option were a mere future interest or expectancy, disconnected from obligations to, or with the interests of, another, there might be little doubt of its assignability. But that is not its nature or substance. The subject matter of the option is a policy of life insurance — the provision a husband makes for his wife and family in the event of his death. Presumably, the wife has contributed her share toward obtaining the premiums that have enabled the husband to carry along the policy;, presumably, too, any other provision for her or the family has been affected by the fact that a life insurance provision is in existence. If disposed of, such a policy, unlike other property, brings no equivalent — once let go it can in many cases never be replaced. An option .so intimately interwoven with the wife’s interest, and with the obligations due to her from her husband, cannot be exercised against her interests, except in exact accordance with the substantial terms in which the option is formulated and put in force.
One of those terms is that it shall be exercised November 27, 1906. Time, here, so far as Mrs. Welling is concerned, is of the *197essence of the option. The interest oí the wife, and the sense of obligation of the husband, may be different on that day from that of any day preceding or following. It is, in my judgment, the wife’s right that the election- — affecting as it does her vital interests— shall be exercised only in view of the considerations that may influence the husband at that time; neither those before nor those after.
Another term of the option is that the election shall be by the husband himself. No one else can stand in his place, or exercise the option under the circumstances and sense of obligation that will influence him. It is the wife’s right to have the husband’s judgment, not that of a stranger — -the judgment of the man who presumably has an interest in her future, not that of a man whose interest in this respect is in conflict with hers. I am of the opinion that a fair interpretation of the spirit of the policy would disallow the exercise of the option of Welling until the day for its exercise had arrived, and would then disallow its exercise, unless it be by the judgment of Welling himself. Such an interpretation, of course, forbids the view that the option is transferable in advance — in this case six years in advance — or was subject to levy by creditors.
The decree is reversed and the cause remanded to the court below with direction to proceed therein in accordance with the views expressed in this opinion.