Donahue v. New York Life Ins. Co.

• Decision Date: 26 April 1932
• Citation: Donahue v. New York Life Ins. Co., 259 N.Y. 98 (N.Y. 1932)
• Court: New York Court of Appeals Court of Appeals
• Parties: Donahue v. New York Life Ins. Co.

259 N.Y. 98

181 N.E. 62

DONAHUE

v.NEW YORK LIFE INS. CO.

Court of Appeals of New York.

April 26, 1932.

Action by Margaret L. Donahue, as committee of the property of Peter Donahue, incompetent, against the New York Life Insurance Company. From a judgment of the Appellate Division (234 App. Div. 241, 254 N. Y. S. 642), which reversed on the law and facts a judgment of Special Term in favor of plaintiff, and dismissed the complaint, plaintiff appeals.

Judgment of Appellate Division reversed, and that of Special Term modified and affirmed.

Appeal from Supreme Court, Appellate Division, First Department.

Monroe J. Cahn, of New York City, for appellant.

Raeburn W. Jenkins and Louis H. Cooke, both of New York City, for respondent.

POUND, C. J.

Peter Donahue took out a policy on his life in the defendant insurance company in May, 1919, for $13,000, payable to his estate. In May, 1926, he made Helen R. Maloney the beneficiary thereof, and delivered the policy to her.

In November, 1928, Peter Donahue was adjudged an incompetent, and the plaintiff was appointed the committee of his property.

The policy, in substance, provides that the defendant, in consideration of the premium paid, will pay to Peter Donahue or his duly designated beneficiary on his death the sum of $13,000, and will pay said Peter Donahue, in case of disability before he becomes sixty years of age, annually, a sum equal to one-tenth of the face of the policy during his lifetime, and also certain dividends, but such payments shall not reduce the sum payable on the policy.

The first annual payment under the disability provision became due May 11, 1930, and this action was brought by the plaintiff to recover the same, together with a dividend which accrued upon the same date. The court below has held that a judgment in a prior action, brought by plaintiff against the defendant and Helen R. Maloney, is res judicata, and has dismissed the complaint.

The complaint in the former action demanded judgment that the defendant Maloney had no interest in the policy or in the proceeds thereof, that plaintiff is entitled to revoke the designation of the defendant Maloney as beneficiary, and that she be required to deliver the policy to plaintiff. The conclusions of law were that the committee could not change the beneficiary and that the delivery of the policy to defendant Maloney was a gift. No decision of the question of the assignment or transfer of disability payments under the policy was essential to the decision of the issue thus presented nor was such question decided either by express declaration or necessary implication. The question remains, what rights passed with the gift of the policy?

The doctrine of res judicata does not require that a party litigant shall ever be estopped from controverting any matter of law or fact which has not been, either by express declaration or necessary implication, determined by the judicial tribunal whose decision is set up as the res judicata. Spencer Bower on Res Judicata, p. 102.

On the trial of the first action the court made the following findings of fact:

‘Sixth. That on or about the 10th day of May, 1926, and at a time when the name of the beneficiary in said policy had been changed to the defendant Helen R. Maloney, the said Peter J. Donahue, the insured, gave and delivered said policy of life insurance to said defendant, and by said delivery of said insurance policy Peter J. Donahue, the insured, assigned, transferred and set over to the said defendant, Helen R. Maloney, all his right, title and interest in and to the said policy of life insurance to Helen R. Maloney for faithful services rendered by her to him for a number of years prior to the said 10th day of May, 1926.’

‘Eleventh. That the change in the name of the beneficiary in said life insurance policy to the defendant Helen R. Maloney, and the subsequent delivery to her of said policy by the said Peter J. Donahue, was done for the purpose of effectuating the giving, assigning and transferring of all his right, title and interest in and to the said policy of life insurance and all the benefits thereunder to the defendant Helen R. Maloney.

‘Twelfth. That at all times since the delivery, assignment and transfer of said policy of life insurance by the said Peter J. Donahue as aforesaid, the defendant Helen R. Maloney has been and still is in the sole and exclusive possession of same, and at all of said times has been and still is the true and lawful owner and holder of said policy of life insurance and as such she was and still is entitled to all the rights, privileges, benefits and emoluments arising and flowing from said policy of insurance,’ and dismissed the complaint.

While these findings on their face may seem broad enough to determine the issue here presented, they were not essential to the determination of the...