Bank of Belzoni v. Hodges

• Decision Date: 07 May 1923
• Docket Number: 23190
• Citation: 96 So. 97,132 Miss. 238
• Court: Mississippi Supreme Court
• Parties: BANK OF BELZONI v. HODGES et al

96 So. 97

132 Miss. 238

BANK OF BELZONI v. HODGES et al

No. 23190

Supreme Court of Mississippi

May 7, 1923

March 1923

1 INSURANCE. Insured may assign policy without beneficiary's consent, where right to change beneficiary reserved; where right to change beneficiary reserved beneficiary has no vested right.

Where a person taking life insurance with a named beneficiary reserves the right in the policy to change the beneficiary the interest of the named beneficiary is not a vested right and the policy may be assigned by the insured without the consent of the named beneficiary. Lamar Life Insurance Co. v. Moody, 122 Miss. 99, 84 So. 135, cited.

2. INSURANCE. Stipulation that change of beneficiary effective from indorsement on policy may be waived by insurer; payment of money into court by insurer on life policy interpleading claimants held waiver of stipulation that change of beneficiary effective only from indorsement.

Where, in a policy of life insurance, it is provided that the insured may change the beneficiary, and that such change should take effect only from its indorsement on the policy, such stipulation is for the benefit of the insurer and may be waived by the company; and where the company pays the money into court and interplead claimants, such act constitutes a waiver.

HON. S. F. DAVIS, Judge.

APPEAL from circuit court of Humphreys county, HON. S. F. DAVIS, Judge.

Action by the Bank of Belzoni against Minnie Hodges and others. From a judgment for defendants, the plaintiff appeals. Reversed and rendered.

Judgment reversed.

Mortimer & Sykes, for appellant.

Counsel for appellee refers to the fact that the application of Tom Hodges did not reserve the right to change the beneficiary. In reply, a policy was issued to him with the right on his part to change the beneficiary. This policy he accepted and retained.

The most that can be said of this was that the minds of the insurer and the insured never met, in so far as the original application was concerned. But when the insured accepted and retained the policy issued to him, their minds did meet and the contract of insurance expresses the true contract between the parties. This has long since been settled by this court, as is also the fact that one accepting a policy of insurance is chargeable with notice of the terms and conditions of the policy. Insurance Company v. Bouldin, 100 Miss. 660; Insurance Company v. O'Dom, 100 Miss. 219; Insurance Company v. Pittman, 111 Miss. 420.

Since writing the above, we have been informed by counsel for appellee that he does not contend that the fact that the application does not reserve the right to change the beneficiary affects this case, but he admits that the provisions of the policy are controlling as to whether or not the right to change the beneficiary is reserved.

His contention is that the right to change the beneficiary is not reserved in the policy. We might say in passing that we have no controversy with counsel as to the vested rights of a beneficiary where the right to change the beneficiary is not reserved. Our contention is that in this policy the right to change the beneficiary is reserved, and therefore, the insured under the Moody case could do with the policy as he desired.

Counsel seems to have the idea that the insured did not have this right, because the word "reserved" is not used. We think he takes entirely too narrow a view of the contract. We do not understand the law to be that the insured has to use the word "reserved" to give him this right. If the English language is capable of expressing anything, it is provided by this policy in words which a child could understand that this contract, within whose four corners the rights of all parties concerned are contained, gives to the insured the right to change the beneficiary. It seems to us that there is just about as much difference between "with the right reserved to change the beneficiary," and "with the right on the part of the insured to change the beneficiary," as between Tweedle Dum and Tweedle Dee.

With reference to a change of beneficiary, if no method to change the beneficiary was set out in the policy, any legal method would be proper, but this policy sets out a method to so do, and the clause giving the insured the right to change his beneficiary limits him to the method provided in the policy, because it plainly says that the right is given him to change the beneficiary as hereinafter provided. The insurance company recognizes that where the right to change the beneficiary is not reserved, that nothing can be done along that line without consent of the beneficiary, and the method of changing a beneficiary in this policy starts off "when the right of revocation has been reserved." Therefore, plainly showing on its face that that clause has reference only to policies wherein the right of revocation has been reserved, and by reading back to the beneficiary clause, we see that this policy was issued to Tom Hodges with the right to change his beneficiary as hereinafter provided, and construing this with the clause in that portion of the policy with reference to the change of beneficiary puts it beyond all controversy that he had the right to make this change because the "as hereinafter provided" specifically refers to a change of beneficiary only when the right of revocation has been reserved.

Counsel cites no authorities to sustain his contention that this right was not reserved. We respectfully refer the court to Sabin v. Phinney, 134 N.Y. 423, 30 A. S. R. 681; Howe v. Fidelity Trust Company, 28 Ky. L. Rep. 485, 89 S.W. 521 Insurance Company v. Swett, 222 F. 200, Ann. Cas. 1917B, 298; Brown v. Powell, 94 So. 457, cited by counsel. That case has no application. The beneficiary in the policy was the insured's estate and he changed the beneficiary again, and he thereafter attempted to change it again. The court most properly held that inasmuch as he did not reserve the right in his appointment, he had no right to substitute a new beneficiary.

This court does not say with reference to the very clause involved in this lawsuit, however, that the same is plain and unambiguous. We might add that all of this argument on this proposition really has nothing to do with the instant case as this is not a fight between beneficiaries and the question, as to whether or not the beneficiary could be, or was, properly changed, is not involved, but is merely a contest between a beneficiary and one who held the policy by assignment as collateral security.

For the reasons given in our original brief and in this reply brief, we submit that the case should be reversed and judgment entered here for the appellant.

V. B. Montgomery, for appellee.

It is the general rule that an ordinary life policy, containing no right in the insured to change the beneficiary, cannot be assigned without the consent of the beneficiary. The delivery of the policy vests an interest in the beneficiary, which no act of the company or insured can divest. 2 Cooley's Briefs on the Law of Insurance, page 1090; Jackson Bank v. Williams, 77 Miss, 398, 26 So. 965; Bishop v. Curphey, 60 Miss. 25; Jones v. Patty, 73 Miss. 179, 18 So. 794; Cozine v. Grimes, 76 Miss. 294, 24 So. 197; Grego v. Grego, 78 Miss. 443, 28 So. 817; Johnson v. Bacon, 92 Miss. 156, 45 So. 858; Mut. Ben. Life Ins. Co. v. Willoughby, 99 Miss. 98, 54 So. 834; Ann. Cases 1913D, page 836.

Such a rule is particularly applicable where there has been a consummated gift of the policy to the beneficiary (McGlynn v. Curry, 91 N.Y.S. 855; 82 A.D. 43); or where there is a statute expressly providing that the interest of any beneficiary, or of such a beneficiary as is named in the policy shall not be changed by the act of the insured." 2 Cooley's Briefs on the Law of Insurance, page 1091; citing Jackson Bank v. Williams, 77 Miss. 398, 26 So. 965: "Where a husband took out a life insurance policy payable to his wife (Code 1892, sec. 1964; Code 1880, sec. 1261; Code 1906, sec. 2140; Hemingway's Code 1917, sec. 1813), providing that the proceeds of a life insurance policy shall inure to the party named as beneficiary, vests an indefeasible interest therein in the wife, and a pledge of it for a debt by the husband without the wife's consent is invalid." Quoted from Southern Reporter, Syllabus of Jackson Bank v. Williams, 26 So. 965, 77 Miss. 398.

Opposing counsel admit that unless the right of revocation is reserved, then an appointment of a designated beneficiary creates an irrevocable trust, and confers upon the beneficiary a vested interest which cannot be defeated by any...