Blum v. New York Life Insurance Company

• Decision Date: 19 June 1906
• Citation: 95 S.W. 317,197 Mo. 513
• Parties: BLUM, Appellant, v. NEW YORK LIFE INSURANCE COMPANY et al
• Court: Missouri Supreme Court

95 S.W. 317

197 Mo. 513

BLUM, Appellant, v. NEW YORK LIFE INSURANCE COMPANY et al

Supreme Court of Missouri, Division Two

June 19, 1906

Appeal from St. Louis City Circuit Court. -- Hon. Warwick Hough Judge.

Affirmed.

Wilson A. Taylor and William S. Campbell for appellant.

The right of the plaintiff to designate another beneficiary in this policy is given by the statute, which right he may exercise in the event of the death or divorcement of the wife. R. S. 1899, sec. 7895. Prior to the original enactment of this section of the statute giving to the wife a vested interest in a policy of insurance expressed to be for her benefit, the husband could, without the consent of the wife change the beneficiary or assign the policy. 3 Am. and Eng Ency. Law (2 Ed.), 981; Eckel v. Renner, 41 Ohio St. 232; Living v. Domett, 26 Hun 150; Kerman v. Howard, 23 Wis. 108. The purpose of enactment of statutes taking away from the husband the right to assign the policy, or in any way interfere with it, was to protect the wife so that in case she survives him the proceeds might go to her free from his creditors. Ins. Co. v. Brant, 47 Mo. 419; Pullis v. Robinson, 73 Mo. 201; Riely v. Hickcox, 70 Mo.App. 617. The proviso added to this same section by the amendment giving the husband the right to designate another beneficiary in the event of the death or divorcement of the wife, does not create a new right, but reserves to him a part of the rights which the original enactment took away. Kittel v. Domeyer, 175 N.Y. 205. By the language of the statute the amendment applies to "any policy of insurance heretofore or hereafter made." It therefore applies to this policy, although issued prior to the amendment. The amendment is not retroactive and does not destroy a vested right. Kittel v. Domeyer, supra; Videan v. Westover, 29 Ont. Rep. 1; Estate of Breitung, 78 Wis. 33; Clark v. Durant, 12 Wis. 223; Kerman v. Howard, 23 Wis. 108; Bursinger v. Banks, 67 Wis. 75; Riley v. Vaughn, 116 Mo. 169; McClain v. Abshire, 63 Mo.App. 333; Ins. Co. v. Ryan, 8 Mo.App. 535. The interest of the alternative beneficiary designated in a policy of insurance is only a contingent interest. Casualty Co. v. Kacer, 169 Mo. 301; Reed v. Painter, 129 Mo. 684; Baker v. Young, 47 Mo. 454. While, as a general rule, the right of the beneficiaries or their heirs cannot be defeated by the action of the insured and the company, without the consent of the beneficiaries, or their heirs, yet "this rule is of general application only when the contract of insurance is made by the beneficiary and the premiums paid by him or some third person for him." Shields v. Sharp, 35 Mo.App. 178. The decree of divorce has the effect of destroying the insurable interest of the divorced wife in the life of the husband. After the granting of the divorce she has no interest in the continuance of the life of the husband, but does have an interest in his death, provided she still remains owner of the policy, and her rights in the policy terminate, except in so far as she has paid the premiums. Hatch v. Hatch (Tex.), 80 S.W. 411.

Judson & Green for respondent New York Life Insurance Company.

(1) The right to change the beneficiary named in the policy and the method by which such change shall be accomplished is a part of the contract of insurance, and the legislature could not alter or impair this contract by the act in question. Collins v. Life Assn., 85 Mo.App. 242; Huff v. Woodmen of the World, 85 Mo.App. 96; Leete v. Bank, 115 Mo. 198; State v. Miller, 66 Mo. 328; State ex rel. v. Laclede Gas L. Co., 102 Mo. 472. (2) The statute in question does not, by its terms, apply to policies in which any other person than the wife is named as one of the beneficiaries, and this court will not extend it by construction so as to make it apply to this policy and operate to deprive the child, a beneficiary not named in the statute, of his interest in the policy. Cranor v. School District, 151 Mo. 119. (3) It is evident from the language of this section, considered in connection with other existing statutes upon the same subject, that the legislature did not intend this act to apply to this case in which the wife has obtained a divorce for the fault of the husband. It was only intended to apply to cases in which the husband obtains a divorce for the fault of the wife. R. S. 1899, secs. 2929 and 2930; Schuster v. Schuster, 93 Mo. 438.

Rassieur, Schnurmacher & Rassieur for respondents.

(1) The beneficiary in a paid-up policy of insurance has a vested interest therein, which can not be destroyed without the beneficiary's consent. Casualty Co. v. Kacer, 169 Mo. 313; 3 Am. and Eng. Ency. Law, 980, 982. (2) This vested interest can not be defeated by subsequent retroactive legislation. Leete v. Bank, 115 Mo. 198. (3) The insurable interest of a wife in the life of her husband is not destroyed because of a divorce subsequently obtained. McKee v. Ins. Co., 28 Mo. 386; Ins. Co. v. Schaefer, 92 U.S. 457; Appeal of Corson, 113 Pa. St. 447; Scott v. Dickson, 108 Pa. St. 13; 9 Am. and Eng. Ency. Law, 855. (4) Section 7895, Revised Statutes 1899, has no application to policies issued in favor of the wife and paid for out of her own means. Sec. 7892, R. S. 1899. (5) Section 7895, Revised Statutes 1899, has application only to policies in which the wife only is named as sole beneficiary -- not to policies in which other beneficiaries are named to succeed to the fund in the event of her prior death. (6) The contingent interest of the children who are named as beneficiaries to take only in the event of the death of the wife, becomes vested upon the happening of that contingency, and cannot be destroyed by any action on the part of others. Appeal of Brown, 125 Pa. St. 303; Ins. Co. v. Burroughs, 34 Conn. 305. (7) Section 7895, Revised Statutes 1899, has application only to policies in which the wife is named as sole beneficiary, and where the husband obtains a divorce from her -- not to cases where the wife obtains a divorce from the husband on the ground of his misconduct.

OPINION

FOX, J.

This cause is here by appeal on the part of the plaintiff from a judgment of the St. Louis Circuit Court in favor of the defendants and dismissing plaintiff's bill.

This action was brought by the plaintiff, Louis Blum, against New York Life Insurance Company, Fannie Blum, wife of the plaintiff, and Melvin Blum, son of Louis and Fannie Blum. Plaintiff, Louis Blum, and Fannie Blum, defendant, were married on the 19th day of June, 1879. On the 21st day of June, 1880, the defendant New York Life Insurance Company, at the request and upon the application of the plaintiff, Louis Blum, issued to Louis Blum its policy of insurance, numbered 142,767, on the tontine investment plan, commencing on the 17th day of June, 1880, in which the defendant Fannie Blum was named as the beneficiary. Said policy was issued in consideration, among other things, of the payment of the annual premium of $ 144.30. The tontine dividend period in said policy was completed on the 17th day of June, 1895, at which time said policy was endorsed for a like paid-up policy for $ 4,210. This amount the New York Life Insurance Company agreed, upon the death of Louis Blum, to pay to said Fannie Blum, for her sole use, if living, and if not living to the children of plaintiff or their guardian for their use, or if there be no such children surviving them, to the legal representatives of said plaintiff. In 1901 said Fannie Blum instituted her suit for divorce against said Louis Blum, her husband, and on September 12, 1901, the court "being satisfied that plaintiff is an innocent and injured party and entitled to the relief prayed for in the plaintiff's petition," adjudged that she be divorced from the bonds of matrimony existing between them and that she recover her costs, etc. The defendant Melvin Blum was born of said marriage in the year 1880, and was at the date of said action by the plaintiff of age. Following the granting of said decree of divorce the plaintiff, Louis Blum, made application to the defendant New York Life Insurance Company, with a view to having the beneficiary named in the policy changed in accordance with the rights granted him under and by virtue of section 7895 of the Revised Statutes of Missouri of 1899. The New York Life Insurance Company refused to consent to change the beneficiary in said policy, whereupon this suit was instituted by the plaintiff for the purpose of having said policy reformed by the substitution of a beneficiary to be designated by the plaintiff, Louis Blum.

The pleadings in this cause are not challenged, therefore there is no necessity for reproducing them here. The petition sought the relief as heretofore indicated and the answer substantially put in issue the right of the plaintiff to the relief sought.

Upon the trial of the cause there was testimony both ways as to the payment of premiums upon this policy. The testimony on the part of the plaintiff tending to show that he paid the premiums; there was other testimony tending to show at least that Mrs. Fannie Blum, one of the defendants, paid some of the premiums. There was other testimony tending to show that defendant Fannie Blum advanced her husband large amounts of money during the time upon which premiums had to be paid upon this policy which amounts were never fully repaid to her, and that such advancements largely exceeded the premiums paid on the policy.

Upon the submission of this cause the trial court found the issues in favor of the defendants and dismissed plaintiff's bill. Plaintiff timely filed his motion for new trial, which was by the court overruled, and in due time and proper form he prosecuted his appeal to this court and the record is now before us for...