Phœnix Mutual Life Insurance v. Dunham

Pardee, J. The petitioners’ charter, granted in 1851, (8 Private Acts, 611,) provides “that policies of insurance issued by said company on the life of any person, expressed to he for the benefit of a married woman, whether the same he effected by herself or her husband, or by any other person in her behalf, shall inure to her separate use and benefit, and that of her and her husband’s children, if any, as may he expressed in said policies, independently of her husband and his creditors and representatives, and also independently of any other person effecting the same in her behalf, his creditors and representatives.” By virtue of this provision the husband is enabled to make in a specified manner a lawful gift to his wife, for her sole and separate use and benefit, irrespective of the claims of his creditors. Mr. McCammon bought of the petitioners their agreement to pay at his death a fixed sum to and for the sole use and benefit of his wife, and delivered the policy to her. There was then a valid contract between herself and the company; she held a chose in action, subject to the principles governing other agreements involving pecuniary obligations. If the amount expressed in the policy had been made payable to her without condition, she would at once have become the owner of a valuable property, which she was permitted, both [88] by the special law and the declaration of the husband, to hold independently of him; of an interest which she could sell or assign, either absolutely or by way of security; one which, upon her death, would pass to her legal representatives as would any other sole and separate estate. It is true that the gift to Mrs. McCammon was made subject to a condition subsequent; if issue had survived the amount would have been payable to such issue; but as no child was ever born to either of them the condition became void and may be laid out of consideration. Holding then the first policy as of her sole and separate property, she had the right to exchange it for the second. For this last she paid the entire consideration and the annual premiums save one. Thus she purchased insurance upon Mr. McCammon’s life solely for her own benefit, and paid for it from her separate estate. And although it is true that upon a change of purpose he could have made the gift of the first policy valueless, so far as his own action was concerned, by omitting to pay the annual premiums necessary to keep it in force, it is difficult to perceive upon what principle his legal representatives can now retract and resume in behalf of his estate a valid gift made by him to his wife. It is suggested in argument that it is a strange conclusion of law that the first husband should pay money of which the second should have the benefit. But to this possibility all gifts from husbands to and for the sole and separate use of wives are exposed; the marriage tie is dissoluble by death or divorce; neither the dying nor the divorced husband can control the ultimate destination of the sole estate of the surviving or separated wife. In Conn. Mutual Life Ins. Co. v. Burroughs, 34 Conn., 305, the policy was in favor of one Mrs. Kendall; she pledged it for borrowed money, and died; her husband died four days later; a child survived them. The contest was between that child and the pledgee. It was determined that by the terms of the policy the mother’s interest ceased, and that of the child, which was before contingent, became fixed and certain by the death of the mother before that, of the father, and that the mother could not by the pledge defeat the right of the child. In Chapin v. Fellowes, 36 Conn., 132, the mother [89] died, her husband and child surviving. After her death he surrendered the policy, took out another for the same amount in his own name and for his sole benefit, and within two years died insolvent, leaving children. The contest was between his creditors and his children for the fund. It was held that, upon the death of the mother previous to that of the husband, the policy by its terms immediately became payable to the children, and was so payable at the death of the father. In Continental Life Ins. Co. v. Palmer, 42 Conn., 60, the wife died, husband and children surviving; one of the children died leaving a child; subsequently the husband died. The effort was to exclude this grandchild from participating in the fund. It was decided that a transmissible interest vested in the children upon the issuing of the policy, and that the grandchild took by descent the interest of its parent. The policy in each of these cases contained the proviso in behalf of children, and in each case children survived. The respective wives had received conditional gifts. At no moment was either of them in a position to deal with her policy as its absolute owner. In each case an event occurred which put an end to any interest in her or in her estate in the fund. In each case the duty of the court was to enforce the proviso in favor of children, and whatever is said in either of them as to the nature or extent of the interest of the wife in her policy, is to be understood as said of it in instances where there are children, and not as determining, where a policy is made payable without condition to the sole and separate use of the wife, in instances where there are no children, that she takes no. interest unless she survives her husband. The Superior Court is advised that the amount due upon the policy should be paid to the representative of the estate of Lydia S. Eeynolds; the payment by Charles McCammon of $24.50 on December 29th, 1876, on the policy, with interest thereon, to be deducted and paid to the representative of his estate. In this opinion the other judges concurred.