Garner v. Germania Life Ins. Co.

• Decision Date: 02 October 1888
• Citation: 18 N.E. 130,110 N.Y. 266
• Parties: GARNER et al. v. GERMANIA LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

110 N.Y. 266

18 N.E. 130

GARNER et al.

v.GERMANIA LIFE INS. CO.

Court of Appeals of New York.

October 2, 1888.

Appeal from supreme court, general term.

Action by Anna Garner and Johanna and Emilie Lindemann against the Germania Life Insurance Company for the amount of a policy of insurance on the life of their father, John Lindemann. Plaintiffs appeal from a judgment of the general term in favor of defendant.

Otto Horwitz, for appellants.

Mr. Dulon, for respondent.

FINCH, J.

The contract of the insurance company, by its express terms, was made with John Lindemann, as trustee for his children, Johanna, Emilie, and Anna. The application was made by him in that character, and not in his individual right. Under the requirement, at the end of the application, ‘signature of applicant,’ he signed explicitly as trustee; under the direction ‘signature of person whose life is to be insured’ he signed as an individual. The policy described the premium as paid by him ‘in trust for his children,’ naming them; and it covenanted in terms to pay the sum assured to the three children, or to their guardians upon the death of their father. The contract, therefore, was one made with the children, through John Lindemann, as their trustee. His was the life insured, but the contract was not with him except as trustee for the children, and as representing them. He took upon himself this office and duty with the full knowledge and assent of the company on the one hand, and the beneficiaries on the other. Every premium paid by him continued to be an act as trustee and agent for the children, and he could not shake off that character and its duties without their assent, except in one way. He might omit or refuse to pay a maturing premium, and so suffer the policy to lapse; but the children were at liberty to pay it, though he should refuse, and if they did, the contract would remain valid as at first, and suffer no injury or destruction from his refusal to pay, or to further act as his children's trustee. These children thus had a vested interest in the policy, increasing in value yearly with every payment of additional premium. That interest was measured and represented by its surrender value, which was never the property of John Lindemann in any other sense than as the trust property of the children created by his act as trustee. He could not deal with it in contravention of their rights, especially with one fully appraised of those rights, and of his position and duty as trustee. That he kept the policy in his own possession, is an immaterial circumstance, for that possession was consistent with the trust, and in entire accordance with its terms. On the face of the contract he dealt and acted as trustee for the children, and had no personal or individual interest in the policy, and no control over it except in his trust character and capacity. What he undertook to do was to destroy the trust by substituting a new and different beneficiary. The policy was issued in September of 1863, and for 15 years the premiums had been paid. There was no covenant on the part of the company to pay a surrender value, but that value nevertheless existed, and what it was sufficiently appeared when the new negotiations began. The premium due September 24, 1878, was not paid on that day, but on the 28th of that month the trustee surrendered the policy to the company, and took out a new one, calling for the same annual premiums, but payable to his second wife as the sole beneficiary. There was no new examination. The substituted policy bore the number of the one canceled. It was for the same amount; it called for the same annual premium; and stated the same age of the applicant as 39 years, adding, as explanation, the words ‘in 1863.’ The first premium was paid, in part at least, by a dividend...