Kothe v. Phoenix Mut. Life Ins. Co.

• Decision Date: 26 November 1929
• Citation: 269 Mass. 148,168 N.E. 737
• Parties: KOTHE v. PHOENIX MUT. LIFE INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

269 Mass. 148

168 N.E. 737

KOTHE

v.PHOENIX MUT. LIFE INS. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

Nov. 26, 1929.

Exceptions from Superior Court, Suffolk County; Bishop, Judge.

Action by Carl H. Kothe against the Phoenix Mutual Life Insurance Company. Defendant's requests for certain rulings were denied and a finding made in plaintiff's favor, and defendant brings exceptions. Exceptions sustained.

F. H. Pardee, of Boston, for plaintiff.

W. I. Badger, of Boston, for defendant.

CROSBY, J.

This is an action of contract to recover the cash surrender value of a policy of life insurance issued by the defendant November 8, 1921, on the life of one Theodore N. MacKay. Section 13 of the policy in part is as follows: ‘At any time after the premiums for two years have been paid the Company will purchase this policy for its cash value on satisfactory release by the insured and assigns and surrender at the Home Office while it is in force, or within the thirty-one days of grace hereinbefore provided.’

The policy was issued apparently by a foreign company. It does not appear from the record whether it was issued in this Commonwealth or elsewhere. If it was issued or delivered in Massachusetts by a foreign company the form of the policy must have been approved by the insurance commissioner. G. L. c. 175, § 132, as amended by St. 1927, c. 93, § 2. If it was issued by a domestic life insurance company a clause similar to the one above quoted would have been required by G. L. c. 175, § 144. In any event, wherever the policy was issued and delivered, the above quoted clause was a part of the contract and binding upon the parties.

It appears from the record that MacKay had occupied a position of trust in the employ of the plaintiff and had appropriated to his own use certain funds of his employer. Previously to the bringing of this suit the plaintiff had brought a creditor's bill in the Superior Court to reach and apply certain assets of MacKay, including the cash surrender value of the policy issued to him by the defendant. On June 1, 1928, a final decree was entered in that suit establishing the indebtedness of MacKay to the present plaintiff in the sum of $3,225, ordering the payment of the same and in default of payment appointing a special master to sell the policy at public auction and to deliver an assignment of the same to the purchaser. Pursuant to this decree the special master, on August 10, 1928, purported to sell all the right, title and interest of MacKay in the policy, and executed an assignment of such interests to the plaintiff. Notice of the assignment was given to the defendant. On September 8, 1928, demand was made by the plaintiff for the cash value, which the defendant refused to pay without surrender of the policy. The defendant denies liability to pay such surrender value on the sole ground that the plaintiff has not tendered the policy to it.

At the hearing of the case before a judge of the Superior Court it was agreed ‘That due and sufficient notice of the assignment referred to in the report of the Special Master was given to the defendant, and on September 8, 1928, demand for the then cash surrender value was made by the plaintiff on the defendant. * * * That at all times subsequent to the decree entered in the original suit in equity the whereabouts of the said Theodore N. MacKay were unknown to either party. * * * That at no time prior to September 8th was any notice of any assignment under this policy received by the defendant. * * * That no loan to the said MacKay upon said policy has been made at any time by the defendant. * * * That no surrender of the policy itself or any tender of such surrender has been made by any person at any time to the said defendant. * * * That the assured under the terms of the policy had the right to change the beneficiary. * * * That the plaintiff has never had possession of the policy.’

At the conclusion of the hearing the defendant presented the following requests for rulings: ‘Now comes the defendant in the above entitled action and requests the Court to rule as follows: 1. Upon all the evidence the plaintiff is not entitled to recover. 2. The surrender of the policy referred to in the plaintiff's declaration within the provisions of Section 13 * * * is a condition precedent to the right of the insured or of the plaintiff in this action or of other person to recover the cash surrender value of the policy.’ These requests were denied, and a finding was made in favor of the plaintiff in the sum of $485.63, the cash surrender value on September 8, 1928, the date of the demand, together with interest thereon, making a total of $496.70. The defendant excepted to the refusal of the judge to rule as requested. The policy is a nonnegotiable chose in action, with the right to receive in the future a certain sum of money upon the happening of certain contingencies. Herman v. Connecticut Mutual Life Ins. Co., 218 Mass. 181, 185, 105 N. E. 450, Ann. Cas. 1916A, 822.

It is settled that the interest of the insured in a life insurance...