Ehlerman v. Bankers' Life Co.

• Decision Date: 24 October 1924
• Docket Number: 36100
• Citation: 200 N.W. 408,199 Iowa 417
• Parties: MILDRED L. EHLERMAN, Administratrix, Appellee, v. BANKERS LIFE COMPANY, Appellee; W. F. TETER, Appellant
• Court: Iowa Supreme Court

200 N.W. 408

199 Iowa 417

MILDRED L. EHLERMAN, Administratrix, Appellee, v. BANKERS LIFE COMPANY, Appellee; W. F. TETER, Appellant

No. 36100

Supreme Court of Iowa, Des Moines

October 24, 1924

REHEARING DENIED FEBRUARY 13, 1925.

Appeal from Woodbury District Court.--A. O. WAKEFIELD, Judge.

ACTION upon two life policies. A demurrer was sustained to the answer of W. F. Teter, who, having asserted a claim to the proceeds of the policies, was joined with the insurer as a defendant. Teter appeals.

Affirmed.

Stason & Stason, for appellant.

J. A Berry and Jepson, Struble, Anderson & Sifford, for appellee.

STEVENS J. ARTHUR, C. J., and DE GRAFF and VERMILION, JJ., concur.

OPINION

STEVENS, J.

Appellee is the administratrix of the estate of Frederick M. Ehlerman, who died intestate, January 11, 1923. At the time of his death, he held two policies of $ 5,000 each in the Bankers Life Company of Des Moines, Iowa, payable on their face to the assured, his executors, administrators, or assigns. At the time of the death of the assured, the policies were in the possession of the insurer, and were held by it as security for loans made by it to the assured. The insurer paid the net proceeds of the policy into court for the use and benefit of the person entitled thereto, and was discharged. Appellant answered the petition of appellee, alleging a change of beneficiary, and attaching to his answer copies of the company's regular blanks for change of beneficiary, executed August 30, 1922, by the assured, designating a change of beneficiary from Frederick M. Ehlerman to appellant.

It is further alleged in the answer that the two policies in suit, with several others, were issued to Frederick M. Ehlerman, all of which were assigned to Ehlerman Bros. & Co., incorporated, of which the insured and appellant were the stockholders, to be used by said corporation in borrowing money for its benefit, the premiums being paid by it; that, when Ehlerman Bros. & Co. became insolvent, and its affairs were fully liquidated, a division was made of the policies, the two in suit being acquired by appellant; that, to accomplish such division, it was orally agreed between Frederick M. Ehlerman and appellant that the latter should personally pay the premiums on said policies for his own protection; and that, in pursuance of such oral agreement, the attempted change of beneficiary was made, and the instrument delivered to one Peter Balkema, with instructions to forward the same to the insurer at Des Moines; but that, through some inadvertence, this was not done until after the death of the assured. Appellant asked that the change be completed by the issuance of a new certificate, and for judgment against the company for the net amount due on the policies.

Appellee demurred to appellant's answer on the ground that the attempted change of beneficiary was ineffectual, for the reason that it did not comply with the provisions of the policies which required that:

"When the right of revocation has been reserved, or in case of the death of any beneficiary under either a revocable or irrevocable designation, the insured, if there be no existing assignment of this policy, may, while the policy is in force, designate a new beneficiary with or without reserving the right of revocation by filing written notice thereof at the home office of the company accompanied by the policy for suitable indorsement thereon. Such change shall take effect when indorsed on the policy by the company and not before. * * *"

The demurrer was sustained, and Teter appeals. The argument on behalf of appellant proceeds entirely on the theory that the transaction pleaded by him in his answer was intended as an assignment by the assured of his interest in the policies, and that he is entitled, as assignee, to the proceeds thereof. Appellee, however, treats the answer as setting up a change of beneficiary, and limits his citation of authorities and argument to the propositions raised by the demurrer.

There is a clear distinction between a change of beneficiary in a life policy and an assignment by the insured of his interest therein. The policies in controversy were assignable, the manner being prescribed thereby. An assignment of a life policy rests upon contract; while the power to change a beneficiary is the power to appoint. 1 Bacon on Life & Accident Insurance (4th Ed.), Section 388. This distinction is so uniformly recognized by the courts that it need not be supported by the citation of cases. An assignment must be accomplished by an actual or constructive delivery of the policy. Manual delivery could not be...