Condon v. New York Life Insurance

Stevens, J. 1. Insükancb: right to proceeds : assignment by insured of portion due deceased beneficiary. I. The policy in suit is an ordinary life policy, containing provisions for settlement, cash-surrender value, paid-up policy, and other provisions giving options to the insured, and is therein designated as a non-forfeiting, free tontine policy. The decision of this case turns' upon the question whether the interest of Nellie Condon, as beneficiary, vested upon the execution and delivery of said policy. It is earnestly contended by counsel for appellant that, as the insured might, if he had survived the twenty-year tontine period, have availed himself of any one of several settlements, or have surrendered the policy and made full settlement with the company, no interest vested in any of the beneficiaries while such right existed and belonged, to the insured; and they, rely upon Carpenter v. Knapp, 103 Iowa 712, to sustain this contention. It is held by the great weight of authority that the interest of a designated beneficiary in an ordinary life policy vests upon the execution and-delivery thereof, and, unless the same contains a provision authorizing a change of beneficiary without the beneficiary’s consent, the insured cannot make such change. Wilmaser v. Continental Life Ins. Co. 66 Iowa 417; Townsend v. Fidelity & Casually Co., 163 Iowa 713; Phillips v. Carpenter, 79 Iowa 600; In re Estate of [662] Conrad, 89 Iowa 396; Central Nat. Bank of Washington v. Hume, 128 U. S. 195 (32 L. Ed. 370); Indiana Nat. Life Ins. Co. v. McGinnis, 180 Ind. 9 (101 N. E. 289); Franklin Life Ins. Co. v. Galligan, 71 Ark. 295 (100 Am. St. 73); Perry v. Tweedy, 128 Ga. 402 (119 Am. St. 393); Hooker v. Sugg, 102 N. C. 115 (8 S. E. 919); Foster v. Gile, 50 Wis. 603 (7 N. W. 555); Millard v. Brayton, 177 Mass. 533 (59 N. E. 436); Preston v. Connecticut Mut. Life Ins. Co., 95 Md. 101 (51 Atl. 838); Phoenix Mut. Life Ins. Co. v. Dunham, 46 Conn. 79 (33 Am. Rep. 14); Garner v. Germania Life Ins. Co., 110 N. Y. 266 (18 N. E. 130); Laughlin v. Norcross, 97 Me. 33 (53 Atl. 834); United States Casualty Co. v. Kacer, 169 Mo. 301 (69 S. W. 370); Ferdon v. Canfield, 104 N. Y. 143 (10 N. E. 146); Irwin v. Travelers Ins. Co., 16 Tex. Civ. App. 683 (39 S. W. 1097); Mutual Benefit Life Ins. Co. v. Willoughby, 99 Miss. 98 (54 So. 834); Mutual Benefit Life Ins. Co. v. Sweet, 222 Fed. 200. And this applies to a policy to which there are attached' the incidents of a loan value, cash-surrender value, and automatic extension by premiums paid. Mutual Benefit Life Ins. Co. v. Willoughby, supra; Succession of Desforges, 135 La. 49 (64 So. 978); Preston v. Connecticut Mut. Life Ins. Co., supra; Lockwood v. Michigan Mut. Life Ins. Co., 108 Mich. 334 (66 N. W. 229); Pingrey v. National Life Ins. Co., 144 Mass. 374 (11 N. E. 562); Bacon on Life & Accident Insurance, Section 377, and cases cited. In case the beneficiary dies before the insured, without having consented to a change of beneficiary, the insured cannot, without a reservation in the policy giving him such right, change .the beneficiary;’and the insurance passes to the estate of the deceased beneficiary. Franklin Life Ins. Co. v. Galligan, supra; Perry v. Tweedy, supra; Harley v. Heist, 86 Ind. 196; Hooker v. Sugg, supra; Drake v. Stone, 58 Ala. 133; Phoenix Mut. Life Ins. Co. v. Dunham, supra; Preston v. Connecticut Mut. Life Ins. Co., supra; Millard v. [663] Brayton, supra; Pingrey v. National Life Ins. Co., supra; In re Estate of Conrad, supra. As we understand the contention of counsel for appellant, it is that, while the interest of a designated beneficiary in an ordinary life policy may vest immediately upon its execution and delivery, endowment, accumulation, and tontine policies form an exception to this rule, and that the interest of a beneficiary in the latter class does not vest un -, til the death of the insured within the tontine, or accumulation, period. Among the authorities cited by counsel to sustain this contention is Carpenter v. Knapp, supra. The instrument before the court in that case Avas a certificate of membership in a benefit society, and the court held, in accordance Avitli the Aveight of authority, that no interest vested in the beneficiai-y until the death of the insured, but the coAirt, referring- to the interest of the beneficiary in an ordinary life policy, said: “It is the general rule that a beneficiary under an ordi-' nary life policy takes a vested interest therein at the moment the policy is executed and delivered, which cannot be impaired or defeated by any act of the assured, or of the assured and the company, to Avliich said beneficiary does not assent.” None of the authorities cited by counsel hold that the incidents of loan and cash surrender, values and other features, such as are contained in the policy in suit, attached to an ordinary life policy for the benefit of the insured, affect its character as an ordinary life policy, or change the rule as to the right of the beneficiary, if the assured dies before these rights have matured. The right of the insured .to take advantage of any of the several provisions of the policy for his benefit depended upon his surviving the tontine period. In the event that he died within the tontine period, all provisions contained in said policy for settlement, etc., immediately terminated, and the policy matured and be [664] came at once payable to the beneficiaries. He had no interest in said policy that would pass by an assignment in the event his death occurred within the tontine period. It is our conclusion that the interest of Nellie Condon Gilbert vested immediately upon the execution and delivery of the policy, and that same, under its terms, passed to her personal representatives. Smith v. Metropolitan L. Ins. Co., 222 Pa. 226 (20 L. R. A. [N. S.] 928), cited by counsel, holds that, upon the death of the beneficiary before the expiration of the tontine period, the interest of such beneficiary terminates, and leaves the insured free to make such other disposition of the policy as he may desire; but the holding in this case is contrary to the great weight of authority, as shown by the cases cited supra. 2' ovri°NSTiOT-ON anee policy: mutual mistake. II. Counsel also earnestly maintains that there was a mutual mistake in the language of the policy, and tliat, as the application designated Mary J. Condon, Louis, Nellie, and Geraldine Condon as beneficiaries, defendant exceeds its authority in adding after said names the words “or their executors, , . administrators or assigns;” that said contract should be so reformed as to eliminate said words therefrom. The only evidence offered by plaintiff to the alleged mistake ivas the application of deceased, which, in' answer to the question “To whom the insurance applied for to be payable in event of death,” gave the names as above, without adding the words, “or executors, administrators, or assigns.” The evidence offered on behalf of defendant tended to show that the policy in suit was one of a large class of similar policies issued by the defendant company at the time, and was in the form used by it at the time. The application was in the form of a blank used by the agents of defendant generally, and the answer naming the several parties as beneficiaries did not undertake to prescribe or designate the form of policy to be [665] issued, nor the method of settlement in the event one or more of said beneficiaries should die before the death of the insured within the tontine period; and, doubtless, the applicant fully expected and intended that a policy of the kind designated would be issued by defendant in the usual form thereof. The policy was delivered to the insured and retained by him for many years without objection or protest, and, in the absence of evidence to the contrary, it may well be assumed that its form and provisions were satisfactory to him. It will be observed that the insured did not attempt, after the death of Nellie Condon Gilbert, to change the beneficiary, and the instrument offered in evidence was, in form, an assignment only. As the interest of Nellie Con-don Gilbert vested immediately upon the execution of the policy, it passed, upon her death, to her personal representatives, and the alleged assignment was ineffectual to pass any interest in said policy to the plaintiff. It is our conclusion that the evidence in this case is not sufficient to require or justify the reformation of said policy in the respect prayed; and that plaintiff, as assignee, took no interest therein; and that the court rightly rendered judgment in favor of the administrator of the estate of Nellie Condon Gilbert for the amount claimed, and against plaintiff for costs. The decree of the lower court is, therefore, — Affirmed. Preston, C. J., Evans and Gaynor, JJ., concur.