C. E. Shepard & Co. v. New York Life Insurance

Beach, J. The interest of Mrs. Gell in the death benefits was contingent on her surviving the insured, *504 and from that fact an argument is raised in favor of construing the policy so as to accomplish a like result in respect of the endowment benefits. But we think that the express language of the policy must prevail, and by its terms the endowment benefits were payable to “the assured” (meaning Mrs. Gell) “or assigns,” without qualification. It is not material whether the contract is to be governed by the law of New York or of Connecticut, for the rule is well settled in both States that .the beneficiary named in a policy of life insurance, not containing language inconsistent therewith, takes a vested interest which passes at death to the legal representatives of the beneficiary, and which cannot, after delivery of the policy, be divested by the life.insured, or the insurer, or both acting together. Garner v. Germania Life Ins. Co., 110 N. Y. 266, 18 N. E. 130; Cyrenius v. Mutual Life Ins. Co., 145 N. Y. 576, 40 N. E. 225; Shipman v. Protected Home Circle, 174 N. Y. 398, 407, 67 N. E. 83; Bradshaw v. Mutual Life Ins. Co., 205 N. Y. 467, 98 N. E. 851; Lemon v. Phoenix Mutual Life Ins. Co., 38 Conn. 294; Phoenix Mutual Life Ins. Co. v. Dunham, 46 Conn. 79, 87; Masonic Mutual Benefit Asso. v. Tolles, 70 Conn. 537, 544, 40 Atl. 448; Supreme Colony v. Towne, post, p. 644, 89 Atl. 264. The next question is whether the defendant is es-topped in this action as against this plaintiff to deny that Gell is the beneficiary of the policy. Since the reinstatement of the policy after Mrs. Gell’s death, the defendant has treated Gell as the sole beneficiary. It put into GelFs hands papers from which any one familiar with the business of life insurance would naturally infer that Gell must be the sole beneficiary; such as the duplicate copy of the second loan agreement, the schedule of distribution of the proceeds of that loan, and the letter notifying that the policy had been reissued with a fifteen-year endowment period. It *505 also itself dealt with the policy in a way inconsistent with the existence of any outstanding interest other than that of Gell, as by the indorsement of a change of beneficiary to the estate of Gell, and by the reissue of the policy with a changed endowment period, at his application. These things were done before the assignment to the plaintiff, and the plaintiff bought the policy in reliance upon the apparent beneficial title of Gell created by this course of dealing, and especially relying upon the documentary evidence of title furnished to Gell by the defendant. We think that the defendant is now estopped, as against Gell’s assignee, to deny Gell’s title. In Bradshaw v. Mutual Life Ins. Co., 205 N. Y. 467, 98 N. E. 851, it was held, under somewhat similar circumstances, that no estoppel arose in favor of the representatives of the deceased life insured, because the parties to the contract were chargeable with knowledge of its legal effect and operation; and the claim is made in this case that plaintiff is chargeable with knowledge of the contents of the policy on the ground that it stands in no better position than its assignor, and that due diligence required it to inspect the policy before buying it. It is clear, however, that prior to the assignment the plaintiff was not charged as matter of law with knowledge that the endowment benefits were payable only to Mrs. Gell or assigns; and as to the claim that due diligence required the plaintiff to inspect the policy, the very point of the estoppel is that, even if due diligence would otherwise have required such inspection, the defendant’s conduct was such as to entitle the plaintiff to dispense with that precaution. The defendant, as one of the parties to the policy, and holding it in pledge, was apparently in the position of one having special knowledge of its contents. It was also apparently bound as a matter of self-interest not to *506 expose itself to the danger of having to pay the endowment benefits twice, by holding out the wrong person as the beneficiary. It also knew that the plaintiff, with others, was engaged in the established business of buying up endowment policies whose terms were approaching completion. ' Under these circumstances, the plaintiff was fairly entitled, in taking its assignment, to rely upon the apparent beneficial title of Gell, created by defendant’s course of dealing with Gell and with the policy, and to dispense with the production or inspection of the policy itself. The conclusions above announced sufficiently answer the questions reserved for advice. The Superior Court is advised that the plaintiff is entitled to a judgment for $962.74, with interest from December 31st, 1910. Costs in this court will be taxed in favor of the plaintiff. In this opinion the other judges concurred.