Jorgensen v. DeViney

• Decision Date: 31 January 1928
• Citation: 222 N.W. 464,57 N.D. 63
• Court: North Dakota Supreme Court

222 N.W. 464

57 N.D. 63

HERBERT L. JORGENSEN, Clifford B. Jorgensen, Agnes Jorgensen, Mildred Weeks, Maude Borland, George Laymon Jorgensen, and Earl Jorgensen, Appellants, v. ETHEL J. DeVINEY, Individually, and as Executrix of the Estate of Alfred Jorgensen, deceased, Respondents

Supreme Court of North Dakota

January 31, 1928

From a judgment of the District Court of Stutsman County Coffey, J., plaintiffs appeal.

Affirmed.

Carr & Rittgers, for appellants.

"The right of inheritance, indeed, or the right of the creditors to resort to the estate of a deceased, is with the exception of vested liens, not an inalienable right." Bank v Smith, 36 N.D. 225, 162 N.W. 302.

"Whoever may be designated in the policy by the assured to receive the proceeds after his death takes by contract and not by descent." Talcott v. Bailey, 54 N.D. 19, 208 N.W. 549; Finn v. Walsh, 19 N.D. 61, 121 N.W. 766.

"It seems that to hold contrary to that rule would have the effect mentioned in St. John v. American Mut. L. Ins Co. 13 N.Y. 31, 64 Am. Dec. 592, 'without right to assign, insurance on lives lose half their usefulness,' a fact that should not be lost sight of in this day when almost every person carries life insurance of some character, the commercial value and usefulness of which should be fostered rather than crippled or minified. If such choses in action may be sold absolutely it is plain that more can be realized from them, in the day of need, than if valuable only as security for loans." Chamberlain v. Butler, 87 Am. St. Rep. 478, 484.

"There can be no question that, as the statute was in force at the time of the taking out of the policy, the intention of the deceased must be presumed to have been that his heirs should take the money." Bank v. Smith, 36 N.D. 225, 162 N.W. 302.

"It seems to be a settled rule that the assured in an ordinary life insurance policy cannot by his will change the beneficiary designated in the policy." 4 L.R.A.(N.S.) 939, note.

"The mode agreed upon in the contract whereby the name of the beneficiary should be changed was made a matter of substance, and should be complied with." Hainer v. Iowa Legion of Honor, 43 N.W. 185.

"Where the mutual benefit certificate was payable to the member's 'legal heirs' the beneficiaries took by virtue of the contract, and not by succession; and hence the certificate was not an asset of the member's estate." Burke v. Modern Woodmen (Cal.) 84 P. 275.

"As between the assignor and the assignee it is immaterial whether the company consents to the change of beneficiary or not. . . . When once the rights of the beneficiaries have vested by reason of the death of the member, no waiver by the society can affect those rights." McLaughlin v. McLaughlin, 104 Cal. 171, 43 Am. St. Rep. 83, 37 P. 865; Wendt v. Iowa Legion of Honor, 72 Iowa 682, 34 N.W. 470.

"In every transfer of title from one person to another there must be an actual or constructive delivery of the thing, or paper title thereto, with intention to pass title, and an actual or constructive acceptance, so as to end dominion on the one side and create it on the other." Northwestern Mut. L. Ins. Co. v. Wright (Wis.) Ann. Cas. 1914D, 697.

Richardson, Green & Wattam, and Aylmer & Aylmer, for respondents.

The general rule is that an insured may assign a policy of insurance which has been made payable to his representatives, etc. 37 C.J. 423.

A policy which is made payable to the estate of the insured may pass by will. 37 C.J. 587.

A bequest of a policy is a specific legacy. 7 L.R.A.(N.S.) 595; 28 R.C.L. 295.

The action of the insurance company in paying over the money to the defendant would constitute a waiver on the part of the insurance company of any necessity for a precise compliance with the terms of the policy; and a waiver on the part of the insurance company to claim that the disposition of the insurance could not be controlled by the insured's will. 37 C.J. 431, 432.

Christianson, J. Nuessle, Ch. J., and Birdzell, Burke, and Burr, JJ., concur.

OPINION

CHRISTIANSON

On January 16, 1917, the North American Life Insurance Company of Chicago, Illinois, issued a policy in the sum of $ 5,000, upon the life of Alfred Jorgensen. The policy was made payable to the "executors, administrators or assigns of the insured," and contained the following provisions:

"Change of Beneficiary. The insured, if there be no existing assignment of this policy made as herein provided, may, while the policy is in force, designate a new beneficiary, by filing written notice thereof at the Home Office of the Company, accompanied by this policy for suitable endorsement. Such change shall take effect upon the endorsement of the same on the policy by the Company, whereupon all rights of the former beneficiary or beneficiaries shall cease. The insured may in like manner designate a beneficiary in succession, to be known as contingent beneficiary. If any beneficiary shall die before the Insured, the interest of such beneficiary shall vest in the Insured.

"Assignments. No assignment of this policy shall be binding upon the Company, unless it be filed with the Company at its Home Office. The Company assumes no responsibility as to the validity of any assignment."

The insured died on or about June 20, 1925, leaving as his sole heirs at law four sisters, Emma Anderson, Anna M. Jorgensen, Ella D. Lord, and Ethel J. DeViney, and seven nieces and nephews, Herbert L. Jorgensen, Clifford D. Jorgensen, Agnes Jorgensen, Mildred Weeks, Maude Borland, George Laymon Jorgensen and Earl Jorgensen. The nieces and nephews were the children of two deceased brothers. The deceased left a last will and testament, which contained, among others, the provisions:

". . . That in the event of my death occurs prior to the death of my youngest sister Ethel Jorgensen, that all of my life insurance be paid to my said sister (Ethel Jorgensen) and that no deduction be made therefrom, nor any division made thereof with other surviving relatives. . . .

"I hereby appoint Ethel Jorgensen executrix of this my last will and testament, without bond."

Upon proceedings duly had in the county court of Stutsman county, the will was admitted to probate, and the said Ethel Jorgensen (who in the meantime had married and whose present name is Ethel J. DeViney), was appointed executrix of the said last will and testament of said Alfred Jorgensen. The North American Life Insurance Company of Chicago, in accordance with the terms of the policy, paid the sum of $ 5,000 to the said Ethel J. DeViney, executrix of the said last will and testament of Alfred Jorgensen. The sole question involved in this controversy is whether the provision in the will is effective and entitles Ethel J. DeViney to retain all the proceeds of the life insurance policy; or whether such proceeds belong to, and should be distributed among, the heirs at law of the said Alfred Jorgensen.

It seems to be conceded that in the absence of § 8719, Comp. Laws 1913, the insured would have had the right to dispose of the insurance policy or the avails thereof by will; but it is contended by the plaintiffs that this section takes away from the insured the right and power to dispose by will of a life insurance policy or the avails of a life insurance policy, which falls within the purview thereof. The case therefore involves an interpretation and application of § 8719, Comp. Laws 1913, which reads:

"The avails of a life insurance policy or of a contract payable by any mutual aid or benevolent society, when made payable to the personal representatives of a deceased, his heirs or estate upon the death of a member of such society or of such insured shall not be subject to the debts of the decedent except by special contract, but shall be inventoried and distributed to the heirs or the heirs at law of such decedent."

Plaintiffs brought this action on the theory that under this section Jorgensen had no right to dispose of the insurance policy or the avails thereof by will; that the provision in Jorgensen's will purporting to bequeath such policy to Jorgensen's sister was wholly ineffectual, and that such policy and the avails thereof belong to the heirs at law of said Alfred Jorgensen and must be distributed to them. The defendant, on the other hand, contends that the provisions of § 8719, supra, are not applicable to this case and that the proceeds of the policy must be distributed in accordance with the directions of Jorgensen's will.

In support of their contention plaintiffs cite and rely upon the following decisions of this court: Finn v. Walsh, 19 N.D. 61, 121 N.W. 766; Farmers State Bank v. Smith, 36 N.D. 225, 162 N.W. 302; Marifjeren v. Farup, 51 N.D. 78, 199 N.W. 181; Re Coughlin, 53 N.D. 188, 205 N.W. 14; Talcott v. Bailey, 54 N.D. 19, 208 N.W. 549.

We are of the opinion, however, that the precise question involved in this case has not been determined in any of the cases cited.

Finn v. Walsh, supra, involved the proceeds of beneficiary certificates in two fraternal organizations, -- each of such certificates being payable to the "legal heirs" of the insured. In a will made more than a year and a half before he died, the insured had designated two persons not related to or dependent upon him (one of them being his affianced wife) as legatees of all his personal property and further stated that he bequeathed to them all his "life insurance of every name and description." The county court distributed the avails of the two beneficiary certificates according to the provisions of the will. The heirs at law, affected by the decision, appealed to the district court; the district court reversed the decision of the county court and ordered the avails of the beneficiary certificates to be distributed to the...