Jorgensen v. De Viney

• Decision Date: 31 January 1928
• Docket Number: No. 5226.,5226.
• Citation: 57 N.D. 63,222 N.W. 464
• Parties: JORGENSEN et al. v. DE VINEY.
• Court: North Dakota Supreme Court

57 N.D. 63

222 N.W. 464

JORGENSEN et al.

v.DE VINEY.

No. 5226.

Supreme Court of North Dakota.

Jan. 31, 1928.

Syllabus by the Court.

Where the insured makes no other disposition of the policy or the avails thereof, a life insurance policy payable to the executors or administrators of the insured is deemed payable to his heirs at law. Section 8719, C. L. 1913.

Where such policy reserves to the insured the right to change the beneficiary in the policy at will, the presumptive heirs at law of the insured have no vested interest in such policy or the avails thereof prior to the death of the insured. The insured retains ownership of, and control over, the policy and all rights growing out thereof, with the right and power to dispose of the policy or the avails thereof in any mode not inhibited by statute, settled rules of public policy, or provisions in the policy.

In the absence of provisions in the policy to the contrary, the insured has the right and power to dispose by will of a life insurance policy made payable to his executors or administrators.

The intention on the part of the insured to dispose by will of such life insurance policy must be declared in clear and unmistakeable terms; and such intention will not be inferred from the fact that the provisions of the will purport to dispose of all “property” and “estate” of the testator.

Additional Syllabus by Editorial Staff.

Strictly speaking, terms “heirs” and “heirs at law” signify one who has succeeded dead ancestor and are not applicable to one whose ancestor is living, and, as such terms are used in Comp. Laws 1913, § 8719, making avails of life policy payable to designated beneficiaries exempt from insured's debts, they are clearly intended to designate persons answering such description at death of insured (citing Words and Phrases, Second Series, “Heirs”).

Appeal from District Court, Stutsman County; Coffey, Judge.

Action by Herbert L. Jorgensen and others against Ethel J. De Viney, individually and as executrix of the estate of Alfred Jorgensen, deceased, to determine the defendant's rights to the proceeds of a policy insuring the deceased's life. From a judgment for defendant, plaintiffs appeal. Affirmed.Carr & Rittgers, of Jamestown, for appellants.

Richardson, Green & Wattam, of Fargo, and Aylmer & Aylmer, of Jamestown, for respondent.

CHRISTIANSON, J.

On January 16, 1917, the North American Life Insurance Company of Chicago, Ill., 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 indorsement. Such change shall take effect upon the indorsement 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. De Viney, 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. De Viney) 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. De Viney, 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. De Viney 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.

[1] It seems to be conceded that, in the absence of section 8719, C. L. 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 section 8719, C. L. 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 section 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;In re Coughlin's Estate, 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 heirs at law of the insured. The administrator with the will annexed and the two legatees appealed to this court and urged as grounds for reversal of the judgment of the district court: (1) That the county court was without jurisdiction; (2) that the provisions of the will operated as a change of beneficiaries, and that the societies had waived their by-law provisions; (3) that, under the statutes of this state, the proceeds of these certificates became a part of the decedent's estate, and must therefore be distributed according to the terms of the will.

In disposing of these contentions, this court said (19 N. D. 66, 67, 69, 121 N. W. 766, 768):

“The view we take of the first proposition renders it not only unnecessary but improper to dispose of the other very interesting questions presented. It is entirely plain that the county court, in assuming to adjudicate the question as to the respective rights of these parties to this fund, exceeded its jurisdiction, and it is equally plain that the district court on such appeal committed error in so far as it assumed to adjudicate such question and to direct the county court to make and enter a final decree of distribution, decreeing, assigning, and vesting in respondents as such heirs the said sum of $3,031.14, being the proceeds of such beneficiary certificates. Such fund is and was no part of the decedent's estate; hence the county court had no jurisdiction over it, and could not, therefore, enter any valid judgment with reference to the distribution thereof.”

In Farmers' State Bank v. Smith, supra, section 8719 was again drawn in question. That case involved an ordinary New York Life Insurance policy which was made payable to the “estate” of the insured. The administrator collected the proceeds of the policy, and a creditor of the insured contended that such proceeds should be used for the...