MORRISON v. MUTUAL LIFE INS. CO. OF NEW YORK.*
From a judgment denying her any relief in an action brought to recover under the provisions of a life insurance policy the plaintiff has appealed. The trial court made copious findings on all of the facts. She does not attack those findings but complains of the rulings of the court in applying the law to the facts found by it. Except as otherwise specifically mentioned, the facts recited herein are taken from the findings.
The policy in controversy, on the face thereof, provided: “The Mutual Life Insurance Company of New York in consideration of the application for this policy, which is hereby made a part of this contract, promises to pay at its head office in the City of New York, unto Julia F. Morrison wife of John W. Morrison of Leadville in the County of Lake State of Colorado if living; if not to his executors, administrators or assigns, two thousand dollars, upon acceptance of satisfactory proofs at its head office of the death of the said John W. Morrison during the continuance of this policy, upon the following condition; and subject to the provisions, requirements and benefits stated on the back of this policy, which are hereby referred to and made part hereof:
“The annual premium of eighty-seven dollars and ninety-two cents shall be paid in advance on the delivery of this policy, and thereafter to the company, at its head office in the City of New York, on the sixteenth day of June in every year during the continuance of this contract, or until premiums for twenty full years shall have been duly paid to said company.
“The receipt of the first payment of premium hereon is acknowledged.
“In Witness Whereof, the said The Mutual Life Insurance Company of New York has caused this policy to be signed by its President and Secretary, at its office in the City of New York, the sixteenth day of June A.D. one thousand nine hundred and four.” (Signed by president and secretary.)
On the back of the policy were printed, “Provisions, Requirements, and Benefits”. Among others there were the following: “Cash Surrender Value.—After three full years' premiums have been paid, upon legal surrender of this policy, provided such surrender be made either (1) within sixty days after the non-payment of any subsequent premium on its original due date, or (2) at any time after twenty full years' premiums have been paid, the company will pay therefor, within sixty days from the date of such surrender, the amount provided for in the Table of Guarantees on the opposite page for the end of the last completed policy year; deducting any unpaid loan hereon. *
“Notice.—No person except an Executive Officer of the Company or its Secretary at its Head Office in New York, has power on behalf of the company to make, modify or alter this contract, to extend the time for paying a premium, to bind the company by making any promise or by accepting any representation or information not contained in the application for this contract. Any interlineations, additions or erasures must be attested by the signature of one of the above named officers. Proofs of death will be required on the forms prescribed by the Company which will be furnished on request.
“Assignments.—The company declines to notice any assignment of this policy until the original assignment, or a duplicate or certified copy thereof shall be filed in the company's head office. The company will not assume any responsibility for the validity of an assignment.”
A stamp at the bottom of the same page was: “Change of Beneficiary—The insured may, from time to time during the continuance of this policy change the beneficiary or beneficiaries by written notice accompanied by this policy to the company at its head office in New York City; and such change shall take effect upon the endorsements of such change on this policy by the company provided the policy is not then assigned. This policy will be returned after such endorsement. W.J. Easton, Secretary.”
Attached to the policy was “This Application”. It was signed by John William Morrison. Items 9 to 12 and answers were as follows:
“9. The full name of the person to whom the insurance is payable is Julia Frances Morrison.
“10. Residing in 214 E. 8 St. Leadville, Colo.
“11. The relationship of said beneficiary to me is Wife.
“12. The insurable interest of the said beneficiary in the life proposed for insurance, other than that of family relationship is None.” Stamped on the back of the application were the words, “Beneficiary option to insured.” Except as we have mentioned, the word “beneficiary” is not used in the policy. The plaintiff did not sign the application nor did any one expressly sign it for her.
The plaintiff claims the insurance contract was given her by her husband, the insured. The court found the fact against her. That finding is supported by the record. The plaintiff testified that Johnson, a soliciting agent of the defendant, called at her home. She asked him to return. He did so and brought a blank application. It was executed in the presence of the plaintiff by her husband. In it the deceased stated in reply to a question that plaintiff had no interest except she was his wife. On the outside there was stamped, “Option to change beneficiary”. The policy was, by the head office, mailed to Johnson. He delivered it to plaintiff. There was stamped on the policy the clause authorizing the insured to change beneficiaries. The plaintiff testified she put the policy in her trunk and so retained possession for fourteen years. No objection to either of said clauses was made. The policy contained a clause permitting an assignment. No assignment was ever made or attempted. The plaintiff testified to her statements made to Johnson. The application blank recited he was a soliciting agent. There is no claim said statements or any of them were communicated to any executive officer. The finding against a gift was fully supported.
Closely allied to the contention just stated the plaintiff asserts that from the time the policy was received at Leadville until 1918 she had possession of it. She asserts also that she paid all of the premiums. In an action in equity between different persons claiming to be beneficiaries such facts might be of help. In re O'Neill's Estate, 143 Misc. 69, 255 N.Y.S. 767, 775. But in an action against an insurer those facts are wholly immaterial. Bradshaw v. Mutual Life Ins. Co., 205 N.Y. 467, 470, 98 N.E. 851. True it is that in some of the cases we find the expression: “The important feature in this statute, as interpreted by the Appellate Division and the Court of Appeals, is not who negotiates and actually procures the insurance policies to be issued, but who pays the premiums.” Chatham Phenix Nat. Bank & Trust Co. v. Crosney, 251 N.Y. 189, 193, 167 N.E. 217, 218. But that language is addressed to that portion of section 52 of the Domestic Relations Act of New York Consol.Laws N.Y., c. 14, which prevents the insured who pays premiums from thus defrauding his creditors by diverting moneys, that are justly due creditors, into gifts of insurance to certain beneficiaries.
Again she testified she told Johnson her husband had given her the policy and that it was her property and she was taking out the insurance on her husband's life. A cursory inspection of the document shows it was a policy written on the application of the husband on his life and that it was his and not her contract. Manifestly the parol conversations were superseded by it, Civ.Code, § 1625, and it was and remained his contract. As such it could be modified or altered only by a written contract, Civ.Code, sec. 1698, signed by an executive officer or the defendant's secretary.
Again, she contends her husband had no right to surrender the policy and demand payment under the cash surrender option without her consent. The policy speaks for itself. It contains not a single word to the effect that, to accept any one of the options provided in the policy, the insured was bound to obtain the consent of the beneficiary. Therefore such consent was not necessary. Baley v. Prudential Ins. Co. of America, 147 Misc. 488, 263 N.Y.S. 244, 252; Wagner v. Thieriot, 203 App.Div. 757, 197 N.Y.S. 560, 565.
The foregoing proposition the plaintiff earnestly controverts. She cites and relies on a number of authorities. It will serve no useful purpose for us to take up and discuss each one. Holder v. Prudential Ins. Co., 77 S.C. 299, 57 S.E. 853, was overruled in Antley v. New York Life Ins. Co., 139 S.C. 23, 137 S.E. 199, 60 A.L.R. 184. Quist v. Western & Southern Life Ins. Co., 219 Mich. 406, 189 N.W. 49, was overruled in La Londe v. Roman Standard Life Ins. Co., 269 Mich. 330, 257 N.W. 834. In Colorado the rule seems to be with the contention of the plaintiff, Hill v. Capitol Life Ins. Co., 91 Colo. 300, 14 P.2d 1006, but that decision was by a divided court and is not controlling. Traveler's Ins. Co. v. Healy, 25 App.Div. 53, 49 N.Y.S. 29, involved a policy similar to the one before us. The court held the insured had the right, without consulting the beneficiary, to surrender it and accept the option converting it into cash. That case was followed and approved in Moskowitz v. Equitable Life Assur. Soc., 252 App.Div. 75, 297 N.Y.S. 45. That where a policy reserves the right to change the beneficiary, or to assign it without the consent of the beneficiary, the assured may assign the policy without the consent of the beneficiary, is the established law in America. Antley v. New York L. Ins. Co., 139 S.C. 23, 137 S.E. 199, 60 A.L.R. 184, and note p. 193. Since the briefs in this case were filed, or at least since the reply brief was in course of preparation, the subject-matter we are now discussing was presented to the court of appeals of New York in Davis v. Modern Industrial Bank, 279 N.Y. 405, 18 N.E.2d 639. In that case the examination made was most exhaustive. A very large number of authorities were collected and classified. On page 641 of 18 N.E.2d, the court said: “Many other cases hold that where the right to change the beneficiary has been reserved by the insured, he becomes the beneficial owner of the policy and may do with it as he pleases, and that the beneficiary has only an expectancy or a vested interest which may be divested by his death previous to that of the insured, or by the exercise by the insured of his reserved right to change the beneficiary.” (Citing numerous authorities.)
But the plaintiff asserts her husband could not accept the cash surrender option until he first caused the name of the beneficiary to be changed. That assertion is also without foundation. The authorities are in accord that it was not necessary to take that roundabout course. La Londe v. Roman Standard Life Ins. Co., supra; Connecticut Mut. Life Ins. Co. v. Stewart, D.C., 22 F.Supp. 68 affirmed 1 Cir., 102 F.2d 147; Rawls v. Penn Mut. Life Ins. Co. of Philadelphia, 5 Cir., 253 F. 725, 727.
As noted above the policy provided that the premiums and the policy should be paid at the office of the defendant in New York. The plaintiff calls those provisions to our attention and claims the contract was to be performed in New York and therefore it is to be interpreted under the laws of New York, Civ.Code, sec. 1646. Continuing, she cites and relies on section 22 of the Domestic Relations Act (1 Cumming & Gilbert's General Laws and Other General Statutes of New York, 1099). That section, as it stood when the contract in suit was made, was as follows:
“Section 22. Insurance of Husband's Life.—A married woman may, in her own name, or in the name of a third person with his consent, as her trustee, cause the life of her husband to be insured for a definite period or for the term of his natural life. Where a married woman survives such period or term she is entitled to receive the insurance money, payable by the terms of the policy, as her separate property. * The policy may provide that the insurance, if the married woman dies before it becomes due and without disposing of it, shall be paid to her husband, or to his, her, or their children, or to or for the use of one or more of those persons; and it may designate one or more trustees for a child or children, to receive and manage such money until such child or children attain full age. The married woman may dispose of such policy by will or written acknowledged assignment to take effect on her death, if she dies thereafter, leaving no descendant surviving. After the will or the assignment takes effect, the legatee or assignee takes such policy absolutely.
“A policy of insurance on the life of any person for the benefit of a married woman, is also assignable and may be surrendered to the company issuing the same, by her or her legal representative, with the written consent of the assured.” It was enacted to obviate the rules of common law regarding the disabilities of married women and to protect them against their husband's debts. Eadie v. Slimmon, 26 N.Y. 9, 17, 82 Am.Dec. 395. It is manifest that on its face it contains nothing changing any rule herein set forth. The first sentence is addressed to contracts applied for by the wife. In Bradshaw v. Mutual Life Ins. Co., 205 N.Y. 467, 98 N.E. 851, the application was made in the name of the wife. The court said (205 N.Y. page 470, 98 N.E. page 852): “The policy of insurance, upon which the plaintiffs seek to recover, was a contract with the wife of the testator and, though procured by him for her benefit, he was acting as her agent and represented her. It was immaterial that he paid the premiums and retained possession of the policy; those facts did not affect the contract as one with her alone. He acquired neither interest in, nor power of disposition over, the policy. His relation to it was that of the life insured, while hers was that of the legal holder in whom solely was vested the interest.” Cases involving insurance applied for by the wife are not helpful because in the instant case the record shows the contract in suit was applied for by the husband. Other parts of the section are not so limited, and it has been held that, as to such other provisions, they are applicable to policies applied for by the husband. Anderson v. Northwestern Mut. L. Ins. Co., 261 N.Y. 450, 452, 453, 185 N.E. 696. We have examined all of the cases cited by the plaintiff, and many others which involved insurance applied for by the husband, and we do not find one that holds said statute contains anything at variance with what we have said. White v. White, Sup., 194 N.Y.S. 114; Bradshaw v. Mutual Life Ins. Co., 187 N.Y. 347, 350, 80 N.E. 203, 10 Ann.Cas. 266; United States Trust Co. v. Mutual Ben. Life Ins. Co., 115 N.Y. 152, 21 N.E. 1025; Wagner v. Thieriot, 203 App.Div. 757, 764, 197 N.Y.S. 560, affirmed 236 N.Y. 588, 142 N.E. 295; Anderson v. Northwestern Mut. L. Ins. Co., supra. In the second case cited the application was made by the husband. The court said (187 N.Y. page 350, 80 N.E. page 204, 10 Ann.Cas. 266): “The policy was the contract of Robert C. Bradshaw with the defendant. Both Robert C. Bradshaw and the defendant, being competent to contract, were free to make such contract as they could agree upon.”
From what has been said above we think the authorities, if not in entire agreement, support the proposition that under the facts plaintiff's husband had the right, without her consent, to surrender the policy and receive the cash value under the clause hereinabove quoted. The proceeds were paid by check drawn in favor of both husband and wife. Her name was signed on the back. The court found such signature was a forgery. But, as the husband had a right, without plaintiff's consent, to collect the moneys, and did do so, it is immaterial whether her signature was forged by him or by some one else, she was not injured. The defendant was the only person who could complain, but it did not do so.
The plaintiff offered certain proof which the trial court refused to allow and she complains of the ruling. The said offer was to the effect that in the year 1924 plaintiff's husband was in San Francisco; the plaintiff and her husband went to the office of the defendant and there they discussed with the persons behind the desk the terms of the policy on the subject of the payment of the cash surrender value, and the next day the plaintiff went back and held a further conversation; that said persons told her the cash surrender value was not payable except on an application therefor signed by the plaintiff. The defendant objected on the ground the persons spoken to were not identified and the authority of said persons was not defined and the proof was contrary to the provisions of the policy. The court did not err in refusing to accept the offer.
The trial court found the plaintiff's action was barred by the provisions of subdivision 1 of section 339, and section 343 of the Code of Civil Procedure. The record does not show when the action was commenced. In support of the judgment, this court must assume on such a record that the court correctly found those facts.
The judgment appealed from is affirmed.
I concur: SPENCE, J.