Lockwood v. Michigan Mut. Life Ins. Co.

• Decision Date: 18 February 1896
• Court: Michigan Supreme Court
• Parties: LOCKWOOD v. MICHIGAN MUT. LIFE INS. CO.

66 N.W. 229

108 Mich. 334

LOCKWOOD v. MICHIGAN MUT. LIFE INS. CO.

Supreme Court of Michigan

February 18, 1896

Error to circuit court, Ingham county; Charles H. Wisner, Judge.

Action by Stanley L. Lockwood against the Michigan Mutual Life Insurance Company. Judgment for plaintiff. Defendant brings error. Reversed. Cahill & Ostrander, for appellant.

F. S Porter, for appellee.

GRRANT J. (after stating the facts).

1. The declaration failed to aver the surrender of the bond within the time limited, duly receipted by the insured and beneficiaries. It is insisted that this was a fatal defect in the declaration. The defendant was not taken by surprise or prejudiced upon the trial by this technical defect in the declaration. Upon request, the court below would have permitted an amendment, and, under How. Ann. St. � 7636, this court may treat the amendment as made.

2. Was it necessary that the receipt should be signed by all the beneficiaries? The record does not show the reason given by the learned circuit judge for his direction. The brief of the plaintiff is based upon the theory that the interests of the beneficiaries were contingent, that the insured could deal with these policies as he chose, and that no receipt signed by any of the beneficiaries was necessary. Upon no other theory can the plaintiff's contention to sustained; for if the policy required the receipt of any beneficiary, it required the receipt of all. Such, however, is not the rule of law governing contracts for life insurance. The beneficiaries, upon the execution of the policy, acquire thereby an interest which the law recognizes, and which the insured cannot dispose of at his own will. This interest is recognized by the authorities, and it is of little consequence whether it be called vested or contingent. Bliss lays down the rule as follows: "We apprehend the general rule to be that a policy, and the money to become due under it, belongs, the moment it is issued, to the person or persons named in it as the beneficiaries, and that there is no power in the person procuring the insurance, by any act of his, by deed or will, to transfer to any other person the interest of the person named. An irrevocable trust is created." Bliss, Ins. (2d Ed.) p. 517. In Hubbard v Stapp, 32 Ill.App. 541, the policies were payable to the insured at the end of 15 and 20 years, respectively; but if he died before those dates, then to his wife and son, if they should survive him. It was held that the beneficiaries held a vested interest, which could not be affected by an subsequent act of the assured. In Insurance Co. v. Smith, 44 Ohio St. 156, 5 N.E. 417, the policy was issued on the life of the husband, payable to the wife. The husband, retained the policy, and paid the premiums, and received the dividends. He and his wife separated, whereupon he notified the company that he no longer wished to continue the policy. It was held that he had no power to surrender the policy merely because he was the insured party and had paid premiums; and that after the company was informed of the separation it was its duty to notify her of the premiums due and that the policy did not lapse in consequence of the failure to pay them. In Fowler v. Butterly, 78 N.Y 68, the husband obtained the policy in terms very similar to the present ones, payable, in the event of his death before a certain time, to his wife, if...