Antley v. N.Y. Life Ins. Co

• Citation: 137 S.E. 199
• Decision Date: 28 February 1927
• Docket Number: (No. 12164.)
• Parties: ANTLEY. v. NEW YORK LIFE INS. CO. et al.
• Court: United States State Supreme Court of South Carolina

137 S.E. 199

ANTLEY.
v.
NEW YORK LIFE INS. CO. et al.

(No. 12164.)

Supreme Court of South Carolina.

Feb. 28, 1927.

Appeal from Common Pleas Circuit Court of Orangeburg County; Jno. S. Wilson, Judge.

Action by Frances M. Antley against the New York Life Insurance Company and the St. Matthews National Bank, wherein defendant first named was dismissed on paying proceeds of insurance policy Into court. Judgment for plaintiff, and defendant last named appealed. Reversed, and remanded for purpose of rendering judgment for defendant.

D. S. Murph, of St. Matthews, for appellant.

Wolfe & Berry, of Orangeburg, for respondent.

COTHRAN, J. This action involves the right, as between the plaintiff, Frances M. Antley, and the, defendant St. Matthews National Bank, to the proceeds of a policy of insurance upon the life of her father, Benjamin F. Antley, who died April 2, 1925.

[137 S.E. 200]

The proceeds have been paid into court, and the insurance company dismissed.

The policy was issued on December 1, 1915, for $2,000; the beneficiary named in the policy was the plaintiff; the premiums had been paid up to about March 1, 1925, at which time there was a premium of $104.29 due. At that time the insured was indebted to the bank in the sum of $1,915.59; he applied to the bank for a loan of $104.29 with which to pay the premium then about to become due. The bank agreed to make the loan, provided the insured would execute and deliver to it an assignment of the policy as security both for the loan and for his indebtedness as stated. The loan was made; the premium was paid; and the assignment was executed and delivered to the bank upon a printed form furnished by the company, a copy of which was forwarded to the insurance company. The assignment was executed only by the insured; the beneficiary was not consulted, and did not consent thereto, possibly knew nothing of it, being a minor at the time. The net amount of the proceeds of the policy, we assume after deducting the indebtedness of the insured to the company, was $1,642.37.

The clause in the policy naming the beneficiary reads:

" * * * To Frances M. Antley, daughter of the insured, beneficiary (with the right on the part of the insured to change the beneficiary as provided in section 6), two thousand dollars upon receipt of due proof of death of the insured. * * *''

Section 6 of the policy reads:

"Change of Beneficiary.—"When the right to change the beneficiary has been reserved, the insured may at any time, and from time to time, change the beneficiary, provided this policy is not then assigned. Every change of beneficiary must be made by written notice to the company at its home office, accompanied by the policy, and will take effect only when duly indorsed on the policy by the company. * * * "

Section 6 also contains the following:

"Miscellaneous Provisions.— * * * The insured may, without the consent of the beneficiary, receive every benefit, exercise every right, and enjoy every privilege conferred upon the insured by this policy."

The policy also contains the following provision relating to assignments:

"Any assignment of this policy must be made in duplicate and one copy filed with the company at its home office. The company assumes no responsibility for the validity of any assignment."

The printed assignment form contains, at the top, the suggestion that the assignment should be signed by the insured and by the beneficiary, and that the beneficiary, if a minor, should sign by a duly appointed guardian thereunto authorized by the court.

The plaintiff admits that the amount of $104.29, loaned by the bank to pay the last premium, should be paid to the bank.

The case was submitted upon an agreed statement of facts to his honor, Judge Wilson, without a jury; he filed a decree finding in favor of the plaintiff for the $1,642.37, less the $104.29 above referred to, and in favor of the bank for the $104.29. From this judgment the defendant bank has appealed, upon exceptions which fairly raise the points hereinafter decided.

The decree of the circuit judge rests mainly upon the case of Barron v. Bank, 131 S. C. 443, 128 S. E. 414, and the appellant here has obtained permission of this court to review that case.

It must be conceded that a reaffirmance of the conclusions of law announced in the Barron Case would lead inevitably to an affirmance of the circuit decree in this case. It is possible that the result may be approved, upon the ground that the assignment was not effected in that case, in the mode prescribed in the policy, though we are not to be understood as so deciding, as many respectable authorities hold that the form of the assignment is designed solely for the protection of the company.

The facts in the Barron Case, with the various policy provisions, are practically identical with those in the case at bar, with the sole exception that there the assignment to the bank was not effected as the policy required. The court, in sustaining the right of the beneficiary to the proceeds of the insurance, notwithstanding the attempted assignment to the bank, laid down the following propositions of law:

(1) That the beneficiary in a life policy which reserves to the insured the right, without the consent of the beneficiary, to change the beneficiary at his pleasure, has a vested interest in the policy, which cannot be divested except in the mode prescribed in the policy for a change in the beneficiary, and that an assignment of the policy, by the insured, even in the form prescribed by the policy, is not such a change.

(2) That under the statute (section 4099, Code of 1922, vol. 3) the policy could not be assigned by the insured, so as to affect the rights of the beneficiary, without her consent.

It seems to be universally conceded that, where the policy does not reserve to the insured the right, under certain terms and conditions, to change the beneficiary, the beneficiary, upon the issuance of the policy, acquires a vested interest in the proceeds of the insurance when available according to the terms of the policy, which cannot be divested by any act of the insured. But the question in the case at bar, where the policy does contain the reserved power in the insured to change the beneficiary, is, What is the char-

[137 S.E. 201]

acter of the beneficiary's interest under these circumstances? Upon this question the decisions of this court are hopelessly at variance.

In Holder v. Ins. Co., 77 s. C. 299, 57 S. E. 853, the point at issue was whether the insured had the power, without consent of the beneficiary, to surrender the policy for cancellation. The. policy contained the usual provision reserving to the insured the right to change the beneficiary. The court denied the power of the insured to surrender the policy for cancellation, and, without drawing any distinction between policies with, and policies without, the reservation, said:

"These authorities [cited] clearly show that the rights of the beneficiaries became vested as soon as the insurer and the insured entered into the contract, and were not subject to be divested unless there was strict compliance with the requirements of the policy in this respect."

In Deal v. Deal, 87 S. C. 395, 69 S. E. 886, Ann. Cas. 1912B, 1142, the point at issue was whether the insured had the power, without consent of the beneficiary, to assign the policy to a third person. The policy contained the usual provision reserving to the insured the right to change the beneficiary. The court denied the power of the insured to assign the policy, at the same time holding that, if the assignment had been forwarded to the company, with the policy, it would have been construed as a request for a change of the beneficiary. It nevertheless was emphatic in its approval of the Holder Case, without apparently considering the distinction between policies reserving the right to the insured to change the beneficiary and those without that reservation.

In the case of Taff v. Smith, 114 S. C. 306, 103 S. E. 551, decided June 28, 1920, the point at issue was whether the attempt of the insured to exercise the reserved right to change the beneficiary should be defeated by the refusal of the first beneficiary to deliver up the policy that it might be sent to the company with the application for the change. The policy contained the usual reservation. The court held that the second beneficiary was entitled to the insurance, and again,-without drawing the distinction adverted to, reaffirmed the principle announced in the Holder and Deal Cases that the beneficiary took a vested interest.

In the case of Brown v. Ins. Co., 114 S. C. 202, 103 s. E. 555, decided June 28, 1920, the point at issue was whether a provision for a forfeiture contained in a note for the premium, but not in the policy, was binding upon the beneficiary. The policy contained the usual reservation. The court held that the provision in the note did not bind the beneficiary, and, without drawing the distinction referred to, reaffirmed the principle announced in the Holder and Deal Cases and in addition cited, to the same effect, Bank v. Hume, 128 U. s. 195, 9 s. Ct. 41, 32 L. Ed. 370; Jones v. Ins. Co., 105 S. C. 427, 90 S. E. 30, and Arnold v. Ins. Co., 3 Ga. App. 685, 60 S. E....