Burnett v. Mutual Life Insurance Company
| Decision Date | 28 November 1916 |
| Docket Number | 8,995 |
| Citation | 114 N.E. 232,66 Ind.App. 280 |
| Parties | BURNETT ET AL. v. MUTUAL LIFE INSURANCE COMPANY ET AL |
| Court | Indiana Appellate Court |
Rehearing denied April 20, 1917. Transfer denied December 19 1917.
From Marion Superior Court (91,739); Charles J. Orbison, Judge.
Action by Mabel I. Burnett and others against the Mutual Life Insurance Company and others. From a judgment for defendants the plaintiffs appeal.
Affirmed.
Miller & Dowling, for appellants.
Smith, Hornbrook & Smith and Harvey & Harvey, for appellees.
On September 21, 1860, appellee the Mutual Life Insurance Company of New York issued a policy of insurance on the life of Joshua W. Copeland for $ 1,000, and on October 9, 1865, appellee issued a second policy on the life of Joshua W. Copeland for $ 4,000, the policies being numbered respectively 24369 and 39598. Margaret Copeland, the wife of Joshua, was made the beneficiary. The policies provided, however, in the event of the death of Margaret Copeland before her husband, the same were to be paid to her children for their use, or to their guardian. On May 10, 1892, Margaret Copeland died, and on March 9, 1913, her husband departed this life with the policies of insurance in full force. At the date of the death of Margaret Copeland, she left surviving her three children, Charles O. and John O. Copeland and Margaret B. Venn. Lydia Langsdale, another daughter, predeceased her mother, leaving surviving her husband, Richard W. Langsdale, and appellants, Mabel I. Burnett and Richard S. Langsdale, her children, who are grandchildren of the primary beneficiary, and who claim a one-fourth interest in the insurance. The children who survived the primary beneficiary dispute the right of the grandchildren to participate in the insurance; and as to whether the grandchildren are entitled to share in the insurance, which is purely a question of law, is presented for the consideration of the court on the action on the trial court in sustaining a demurrer to eight paragraphs of complaint, which differ slightly in theory and phraseology, but each of which presents the ultimate question to be decided; hence no useful purpose will be subserved in distinguishing the same in theory. Each paragraph of the complaint alleges that the insurance company does not dispute liability, but declines to make payment by reason of the controversy as to whom the portion of the insurance retained belongs. Before the court ruled upon the demurrer to the complaint by reason of application on the part of those claiming an interest in the subject-matter of the litigation to be made parties to the action, and by assignment of John O. Copeland of his interest in the insurance to his wife Eva, the record shows that appellants were parties plaintiff and the Mutual Life Insurance Company of New York, Richard Langsdale, Charles O. Copeland, Margaret B. Venn and Eva Copeland were parties defendant, and all of said defendants, except Richard W. Langsdale, who was defaulted below, are appellees herein. It might further be noted that Richard W. Langsdale, the father of appellants, died after the rendition of the judgment and before this appeal was perfected, which fact is disclosed by the assignment of errors.
Appellants present the legal question involved from their standpoint under two general propositions: First, that according to the terms of the policies sued on appellants were beneficiaries, being included within the term "children"; second, that the interest of Lydia Langsdale, the child of Joshua and Margaret Copeland, vested under the policies in the lifetime of Lydia, and upon her death in the lifetime of her parents, her vested interest passed by the law of descent of this state to her heirs at law, including appellants. On the part of appellees, it is contended that the insurance policies must be construed under the principles of law governing contracts, and not under the principles of law governing wills, and, being so construed, Lydia Langsdale, dying before the insured, had no interest in the policies; and, having no interest in the policies, appellants, who are her children, acquired no interest; and further, that the complaint discloses that appellants' right of action depends upon the statute of the state of New York, and, the statute not being pleaded, the complaint is insufficient in this particular to withstand a demurrer.
From the information brought to our attention through the able and exhaustive briefs in the cause, it appears that the controlling question for decision is without precedence in this state, and that a lack of harmony exists in the holdings of foreign jurisdictions that have been called upon to express their views as to the interest the primary beneficiary named in the policy of insurance takes, and as to whether children named in a policy as beneficiaries in the manner here provided acquired such an interest in the policy upon its execution and delivery as is transmissible to their heirs, where the primary beneficiary does not survive the insured.
While policies of insurance contain, as a general rule, provisions such as are found in instruments or writings testamentary in character, in that the actual enjoyment of the property rights created in favor of the beneficiary by the policy is deferred until after the death of the assured, nevertheless they are to be construed in accordance with the principles of law that are applicable to contracts and not wills. In the case of wills, in the drawing of which it is the intention of the testator alone which is sought to be expressed, greater liberty is allowed in order to prevent the testator's purpose from being defeated; but in the case of contracts entered into, it may be after much negotiation, and after much consideration of their terms by the parties interested, and where the language used is presumed to have been chosen because it aptly and correctly describes the rights and liabilities of the parties interested, and where the language used is presumed to have been chosen because it aptly and correctly describes the rights and liabilities of the parties, greater strictness is properly required. Davis v. New York Life Ins. Co. (1912), 212 Mass. 310, 98 N.E. 1043, 41 L. R. A. (N. S.) 250; Lerch v. Freutel (1901), 36 Misc. 581, 73 N.Y.S. 1078.
So the right of Margaret Copeland as the primary beneficiary, and her children, who were made beneficiaries in the event of her death before the assured, was fixed by contract and is to be so determined, and is not a right or benefit arising by operation of statute. Wilburn v. Wilburn (1882), 83 Ind. 55; Hutson, Admr., v. Merrifield, Admr. (1875), 51 Ind. 24, 19 Am. Rep. 722.
Appellees by their memorandum accompanying the demurrer addressed to the complaint raised no objection to the sufficiency of the complaint on the ground that appellants' right of action depended upon a statute of the State of New York, which was not pleaded; hence this question is not before us for review. Acts 1911 p. 415, § 344, cl. 6, Burns 1914. However, it is proper to state that each paragraph of the complaint pleads full performance of the conditions of the policy to be performed by the assured and the beneficiaries before the bringing of this action, and further that appellee the Mutual Life Insurance Company did not dispute liability, and has paid the proceeds of the policy in dispute into the hands of the clerk of the circuit court to be paid to whomsoever was entitled to receive the same.
Before taking up the question as to the interest Margaret Copeland and her children acquired in the policies, we shall dispose of the contention on the part of appellants that they are beneficiaries under the policies included within the term "children." A close analysis of the policies does not disclose anything from their context to warrant a construction given to the word "children" but the ordinary meaning. Nor does the word "children" in its usual signification include grandchildren, although it may be sometimes used to so include them. Feit's Exrs. v. Vanatta (1870), 21 N.J. Eq. 84.
This, as well as other jurisdictions, has decided generally that the word "children" is not broad enough to include grandchildren, and will not denote or signify grandchildren when there is any child or children in existence in connection with the distribution of property. Cummings v. Plummer (1884), 94 Ind. 403, 48 Am. Rep. 167; West v. Rassman (1893), 135 Ind. 278, 34 N.E. 991; Pugh v. Pugh (1886), 105 Ind. 552, 5 N.E. 673; Culp v. Culp (1895), 142 Ind. 159, 41 N.E. 363; Osgood v. Lovering (1851), 33 Me. 464; Feit's Exrs. v. Vanatta, supra; Castner's Appeal (1879), 88 Pa. 478; Davis v. New York Life Ins. Co., supra.
In Cummings v. Plummer supra, the following from Jarman on Wills (2 Jarman, Wills 69), is quoted with approval: " " In 5 Elliott, Contracts § 4352, under the subject of life insurance, the author says: "'Children' has been held to include an adopted child, but not grandchildren." In Winsor v. Odd Fellows, etc., Assn. (1880), 13 R.I. 149, where the by-laws of the association provided that a contributing member of a subordinate lodge or encampment...
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