Lain v. Metro. Life Ins. Co.

• Decision Date: 15 January 1945
• Docket Number: No. 28145.,28145.
• Citation: 388 Ill. 576,58 N.E.2d 587
• Parties: LAIN et al. v. METROPOLITAN LIFE INS. CO.
• Court: Illinois Supreme Court

388 Ill. 576

58 N.E.2d 587

LAIN et al.

v.METROPOLITAN LIFE INS. CO.

No. 28145.

Supreme Court of Illinois.

Nov. 22, 1944.

Rehearing Denied Jan. 15, 1945.

Appeal from Third Division, Appellate Court, First District, on Appeal from Municipal Court of Chicago; Wendell E. Green, Judge.

Action by Van V. Lain and another, doing business as Lain & Son, against the Metropolitan Life Insurance Company to recover on an industrial life policy as assignee thereof. From a judgment 322 Ill.App. 643, 54 N.E.2d 736, reversing a judgment of the trial court for plaintiffs, plaintiff appeals.

Appellate Court reversed and trial court affirmed.

Fisher & Fisher, of Chicago (Joseph Fisher, of Chicago, of counsel), for appellants.

Hoyne, O'Connor & Rubinkam and Eckert & Peterson, all of Chicago (Nathaniel Rubinkam, Tom Leeming, Owen Rall, and Melvin L. Gibbard, all of Chicago, of counsel), for appellee.

GUNN, Justice.

Appellants, Van V. Lain and William Lain, doing business as Lain & Son, filed a statement of claim in the menicipal court of Chicago against the Metropolitan Life Insurance Company, a corporation, appellee.Appellants were morticians, and claimed to be entitled to the sum of $434.77, the costs of funeral expenses of one Alice Newman, deceased. Alice Newman had a policy of insurance in the sum of $400 in appellee company, naming James Newman, the insured's son, as beneficiary. The policy was in force at the time the insured died. After the death of Alice Newman, James Newman assigned the policy of insurance to appellants for the purpose of discharging his indebtedness for funeral expenses. The assignment was delivered to appellee, who refused to recognize it, and refused to pay the sum of $400. Suit was brought, and appellee answered, showing the policy had a value of $397.47. Under the pleadings, substantially every issue, including proof of death, was admitted, except the right of appellants to compel appellee to recognize and accept the assignment. On the trial before the court without a jury, there was a finding and judgment against appellee for the sum of $397.47, and on appeal to the Appellate Court for the First District, the judgment of the municipal court was reversed and judgment entered against plaintiffs in that court. The Appellate Court granted a certificate of importance to this court, giving us jurisdiction.

The point for decision involves a clause in the policy prohibiting assignability of the policy, or any of its proceeds, reading as follows: ‘Non-assignability. Any assignment or pledge of this Policy or of any of its benefits shall be void;’ and, incidentally, a clause designated ‘Facility of Payment,’ which provides that ‘If the Beneficiary does not surrender this Policy with due proof of death within 30 days after the death of the Insured, or if the Beneficiary is the estate of the Insured, or is not legally qualified to give a valid release, or dies before the Insured, the death benefit will, upon surrender of this Policy, with due proof of death, be paid to the executor or administrator of the Insured, but in any such case the Company may, in lieu of payment to the executor or administrator, pay the death benefit to any person named as Beneficiary, or to any relative by blood or connection by marriage of the Insured appearing to the Company to be equitably entitled to such payment.’ Appellants take the position that within the thirty-days' surrender period the policy was assigned to them by the beneficiary, and that, the right of the beneficiary having become fully established by death and proof of loss, appellee was without power to prohibit the assignment of such interest by the beneficiary.

The general rule, supported by a great wealth of authority, is that general stipulations in policies, prohibiting assignment thereof except with the insurer's consent, or upon giving some notice, or like conditions, have universally been held to apply only to assignments before loss, and, accordingly, not to prevent an assignment after loss, of the claim or interest of the insured in the insurance money then due in respect to the loss. Thus in Ginsburg v. Bull Dog Auto Fire Ins. Ass'n, 328 Ill. 571, 160 N.E. 145, 56 A.L.R. 1387, we...