Slocum v. Northwestern National Life Insurance

SiebecKER, J. Tbe allegations of tbe complaint are in effect tbat defendant without good cause renounced and terminated tbe insurance contract held by James Slocum, tbat plaintiffs are tbe last-named beneficiaries in tbe policy, and tbat they as such beneficiaries have suffered damage by reason of such wrongful termination of tbe policy. The aver-ments of tbe complaint do not clearly state whether plaintiffs treat tbe contract as rescinded and seek recovery upon such rescission of premiums paid and interest, as in True v. Bankers L. Asso. 78 Wis. 287, 47 N. W. 520, or whether -they seek recovery of damages, on tbe repudiation of tbe contract, for its breach, as was done in Merrick v. N. W. Nat. L. Ins. Co. 124 Wis. 221, 102 N. W. 593. This uncertainty of tbe allegations, however, becomes immaterial under the controlling question raised by tbe general demurrer to tbe complaint. Plaintiffs sue as the beneficiaries'-under tbe policy, and tbe question is, Have they, under tbe law of this state, such an interest in the policy as entitles them to recover damages for breach of tbe contract or the premiums paid, if there was a rescission of it ? It seems clear tbat plaintiffs have no interest whatever in tbe sums paid as premiums by tbe insured to secure a benefit to those entitled to the proceeds of the policy upon maturity. Upon rescission of tbe contract by tbe parties all rights to tbe premiums paid by tbe insured are clearly vested in him. True v. Bankers’ L. Asso., supra; [292] Supreme Council A. L. H. v. Black, 123 Fed. 650; Van Werden v. Equitable L. Assur. Soc. 99 Iowa, 621, 68 N. W. 892, and cases cited; Lovell v. St. Louis Mut. L. Ins. Co. 111 U. S. 264, 4 Sup. Ct. 390; Knights Templar & M. L. Ind. Co. v. Gravett, 49 Ill. App. 252; Am. L. Ins. Co. v. McAden, 109 Pa. St. 399, 1 Atl. 256. The further inquiry then is, Have plaintiffs as beneficiaries of the policy such an interest in it that they can be deemed to have suffered legal damages from the breach of it by the defendant? In determining this question we cannot be aided by authorities of other states, because the rights of beneficiaries in an insurance policy under the law of this state differ materially from those in other states. In this state the right of the insured to dispose of the policy by assignment, will, or gift, without the consent of the beneficiaries, has been recognized from the time of the decision in Clark v. Durand, 12 Wis. 223, to the present day. Rawson v. Milwaukee Mut. L. Ins. Co. 115 Wis. 641, 92 N. W. 378; Opitz v. Karel, 118 Wis. 527, 95 N. W. 948, and cases cited. As stated in the Dawson Case: “This rule places the rights of the beneficiary under such a policy (if not a married woman) on almost identically the same basis as the rights of a beneficiary under a mutual benefit certificate. ... In neither case can the beneficiary do anything which will prevent the insured from cutting off his rights entirely.” While such a right is a vested one it is in its nature a mere “expectancy,” which is subject to be defeated by the act of the insured, and hence cannot be absolute and indefeasible until the death of the insured. The uncertainty of the beneficiary’s interests, growing out of the contingencies incident to the power of the insured to thus deal with the policy, renders the rights and interests of the beneficiaries too hypothetical to be made the ground for damages for a breach of the contract. It is a mere expectancy of an unascertainable [293] value, and bence cannot be made tbe basis of a claim for damages. Under tbe law of tbis state tbe rights of tbe insured in sucb a contract are valuable property rights, and for a deprivation thereof tbe insured is entitled to recover tbe damages as for other wrongful deprivations of valuable property rights. In addition to cases cited above, tbe following authorities recognize this right and tbe consequent remedy for tire recovery of damages for a wrongful invasion of it: Krebs v. Security T. & L. Ins. Co. 156 Fed. 294; O'Neill v. Supreme Council A. L. H. 70 N. J. Law, 410, 57 Atl. 463; Price v. Mut. R. L. Ins. Co. 102 Md. 683, 62 Atl. 1040; Bower v. State, 134 N. Y. 429, 31 N. E. 894. Upon these considerations it must be held that tbe plaintiffs, as beneficiaries of tbe policy, suffered no legal damages by tbe alleged wrongful termination of it by tbe defendant, and tbe demurrer to tbe complaint should have been sustained. By the Gourt. — The order appealed from is reversed, and tbe cause remanded with directions to tbe lower court to enter an order sustaining tbe demurrer to tbe complaint, and for further proceedings according to law.