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District Court of Appeal, Second District, Division 2, California.


Civ. 14436.

Decided: December 28, 1944

Reynolds & Painter, of Los Angeles, for appellant. Helgoe & Hart and John K. Ford, all of Los Angeles, for respondent.

This is an action in interpleader instituted by the Phoenix Mutual Life Insurance Company to determine conflicting claims to a policy of insurance of James R. Birkelund, deceased. One of the claimants is Hilda Olsen Birkelund, hereinafter referred to as Hilda, the first wife of the deceased, the other claimant is Ruth Lillian Birkelund, hereinafter referred to as Lillian, the second wife of the deceased.

From a judgment decreeing that Hilda was entitled to the proceeds of the life insurance policy in question less $270.20 awarded to Lillian, Lillian appeals.

The essential facts are these:

Hilda and decedent were married in 1916. In 1921, decedent obtained a life insurance policy in the sum of $5000 from the Phoenix Mutual Life Insurance Company. Hilda was named as the beneficiary. No right to change the beneficiary was reserved in the insured.

On April 23, 1930, Hilda and decedent executed and delivered to the insurance company a request for change of beneficiary wherein the right to change the beneficiary was reserved to decedent.

On November 23, 1931, as part of a property settlement agreement, Hilda and her husband entered into an agreement reading in part as follows:

‘The defendant agrees to deliver to the said plaintiff herein insurance policies upon his life as follows: Two policies for Five Thousand ($5,000.00) Dollars, each in the Phoenix Mutual Insurance Company, each of which policies is encumbered with a loan of Four Hundred Fifty ($450.00) Dollars, and one policy in the Berkshire Life Insurance Company in the amount of Twelve Hundred ($1200.00) Dollars, which later policy is unencumbered by any loan. The plaintiff herein agreeing to pay the premiums subsequent to the year 1931 on the two policies with the Phoenix Mutual Insurance Company, said payments to be made out of the alimony and support money received from the defendant herein. The defendant herein agrees to carry at all times the premium on the Twelve Hundred ($1200.00) Dollar policy above named, and in addition thereto to pay at all times the interest as it comes due on the Nine Hundred ($900.00) Dollar loan from the Phoenix Mutual Insurance on the two first policies above mentioned.’

The policies referred to in the foregoing agreement were never delivered to Hilda not did she ever pay any premiums thereon, neither did Hilda ever make any attempt to obtain the insurance policies which were to be delivered to her in accordance with the terms of the agreement. On July 5, 1932, decedent and Lillian were married and lived together as man and wife until his death in 1942. Lillian paid premiums on policy No. 387,737 in the sum of $271.20. Shortly after his marriage to Lillian, decedent caused Lillian to be named beneficiary under policy No. 387,737, and in December, 1932, delivered the policy to her saying, ‘I am presenting you and making you a beneficiary of this policy, this Phoenix policy. It is for the loans you have made me over a period of time, and I want you to keep it in your possession.’ Prior to the delivery of the policy to her, Lillian had loaned decedent between $2,000.00 and $2,500.00 of her separate estate, and after the delivery of the policy between $6,000 and $7,000 of her separate estate, no part of which was ever repaid to her.

There are five questions necessary for us to determine which will be stated and answered hereunder seriatim:

First: Did Hilda have a vested right in insurance policy No. 387,737?

This question must be answered in the affirmative and is governed by the rule that if, by contract, the right to change a beneficiary is waived, the beneficiary secures a vested interest which may not be defeated by the insured attempting to change the beneficiary. Mahony v. Crocker, 58 Cal.App.2d 196, 202, 136 P.2d 810, and cases therein cited.)

In the present case the effect of the property settlement agreement, the pertinent portion of which is set forth supra, was to constitute a waiver by decedent of his right to change the beneficiary named in the life insurance policy, therefore his attempt to substitute Lillian in place of Hilda was ineffectual.

There is no merit in the contention that Mahony v. Crocker, supra, and the cases therein cited, are inapplicable because in such cases the life insurance policy had actually been delivered to the party entitled thereto while in the instant case, the policy was not delivered to Hilda.

This is an equitable action, and equity regards that as done which should have been done. (Sec. 3529, Civil Code; Beverly v. Blackwood, 102 Cal. 83, 92, 36 P. 378.) Therefore, since it was decedent's duty to deliver the policy to Hilda, for the purpose of this question it will be considered that the policy was in fact delivered to her.

Sandrosky v. Prudential Insurance Co., 217 Cal. 578, 20 P.2d 325, and Blethen v. Pacific Mutual Life Ins. Co., 198 Cal. 91, 243 P. 431, are not here in point. Such cases merely hold that a beneficiary's interest is not a vested right if the insured retains the right to change the beneficiary. In the present case the insured had waived the right to change the beneficiary.

Second: Did (a) estoppel or (b) laches prevent Hilda from asserting her claim to the proceeds of the insurance policy?

This question must be answered in the negative. It is the general rule in California that one who relies on the doctrine either of (a) estoppel or of (b) laches as a defense to an action, and who has the opportunity to do so must plead the facts constituting the alleged (a) estoppel or (b) laches unless the necessary facts to constitute estoppel or laches appear in the complaint. (Lucci v. United Co., 220 Cal. 492, 497, 31 P.2d 369; Victor Oil Co. v. Drum, 184 Cal. 226, 193 P. 243; Peerless Motor Co. v. Sterling Finance Corp., 139 Cal.App. 621, 624, 34 P.2d 738; Newhall v. Hatch, 134 Cal. 269, 273, 66 P. 266, 55 L.R.A. 673; Cooke v. Darnell, 100 Cal.App. 482, 488, 280 P. 383.)

In the instant case Lillian has failed through any pleading in the trial court to raise the defense of estoppel or laches, therefore she may not urge such defenses in this court.

Third: Was the maxim: ‘Where one of two innocent persons must suffer by the act of a third, he by whose negligence it happens must be the sufferer,’ pertinent to the facts of the present action?

This question must be answered in the negative for the reason that Lillian did not part with any thing of value as a result of the insurance policy not having been delivered to Hilda. Part of the money she advanced to decedent was before he gave her the insurance policy in question, and the money advanced subsequent to the time the policy was handed to her was advanced on the security of a contract which decedent had with Mr. Strakosch. Hence the above maxim is inapplicable to the present case. (Shoudy v. Shoudy, 55 Cal.App. 344, 353, 203 P. 433.)

Fourth: Was the maxim: ‘He who comes into equity must come with clean hands,’ applicable to Hilda because she did not pay any premium upon the insurance policy here in question?

This question must likewise be answered in the negative. Before this maxim may be relied upon it must be shown that the conduct of one of the parties has affected the equitable relationship of the parties litigant. (Germo Manufacturing Co. v. McClellan, 107 Cal.App. 532, 541, 290 P. 534.)

In the instant case Lillian had no right to compel Hilda to pay the premiums on the insurance policy, and Hilda's failure to do so in no way affected Lillian or her rights. Lillian by the judgment was reimbursed for all sums which she had advanced as insurance premiums. This is all she was entitled to.

Fifth: Did the maxim: ‘He who seeks equity must do equity’, apply in the instant case?

This question must also be answered in the negative. Any obligation that Hilda owed to pay the premiums on the life insurance policy was either to decedent or his estate. Neither is a party to the present action. Under the recognized rule that the above maxim can be invoked only where a party seeking equity is required to do equity to another party litigant (Maze v. Gordon, 96 Cal. 61, 30 P. 962), the foregoing maxim is inapplicable to the facts disclosed by the present record.

For the foregoing reasons the judgment is affirmed.

McCOMB, Justice.

MOORE, P. J., concurs.

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