Chapin v. Fellowes

Hinman, C. J. In the case of The Connecticut Mutual Life Ins. Co. v. Burroughs and others, 34 Conn. R., 305, we held that a policy of insurance on the life of a husband, payable to the wife for her sole use, and in case of her death before her husband’s to be paid to her children, was not assignable by her so as to defeat the interest of her children which subsequently to such assignment became absolute by the death of their mother and the death of the husband. The plain reason for the decision is, that as the charter of the insurance company and the statutes of the state authorized such insurance contracts for the purpose of making some provision for the family in case of the husband’s death, and as the interest of the wife was wholly contingent on her surviving her husband, and as she could of course convey no greater interest in the policy than she had herself in it, and as her interest expired by her deatl\ previous to that of her husband, by the very terms of the contract itself it immediately became payable to her children, and was so payable at the time it became due by the death of the husband. If there is any difference or distinction between that case and this in respect to the equitable rights of the children as against the [135] creditors of the husband, (for creditors of the husbands claimed the avails of the policies in both cases,) it does not appear to us to be in favor of those creditors in the case under consideration. And this indeed would seem to be the view of the counsel for the creditors in this, case, since it is not claimed that the husband had any power to destroy the vested interest of the children by surrendering up the policy to the company after the death of his wife, but that, as he was under no obligation to go on paying the premiums in order to prevent a forfeiture, he became liable to the children, on surrendering it and taking a new policy for his own benefit, only for the cash value of the policy at the time, and that that cash value, with perhaps interest upon it, is all that is now equitably due to the children out of the avails of the new policy that he took in his own name and -for his own benefit. It may be true that as guardian of the children he might have had power to sell the policy to the company for the benefit of the children, and hold himself accountable to them for the avails. But he did not assume or attempt to do this. His object rather was to deprive the children of any benefit they were entitled to under or by reason of it, and to take the benefit wholly to himself in the shape of a new policy of the same tenor and date as the former one, and like it in all respects, except that his own name as sole payee, for whose use alone the new policy appears on its face to be issued, is substituted for that of his wife and children. It was an attempt, therefore, to renew the old policy for his own benefit, making it what it would have been had it in fact been so issued at the time the policy was made to his wife; and he, therefore, instead of holding the cash value of the policy for the benefit of his children, undertook to destroy their whole interest in it and take it to himself. The cash value of the children’s interest therefore went into and became the consideration upon which the new policy was issued to himself. They-therefore may well be held to have paid for the new policy, and the premiums thereafter paid upon it were precisely what would have been paid upon the policy to his wife [136] had tliat been kept alive. The obvious object of the transaction was therefore to retain the old policy as a subsisting operative instrument, with the substitution of his own name as payee for that of his wife and children. But he had no power to make any such substitution, and we think a court of equity ought to treat the substituted policy as in fact belonging to the children, and the premiums paid upon it as paid under those provisions of the charter and of the statute which authorize a husband to insure his own life for the benefit of his -wife and children. We therefore advise the Superior Court to decree the avails of the policy, subject to all legal deductions, to the children of Mrs. Chapin. In this opinion the other judges concurred.