Locomotive Engineers Mut. Life & Accident Ins. Ass'n v. Locke

• Decision Date: 01 March 1938
• Citation: 277 N.Y. 584,13 N.E.2d 781
• Parties: LOCOMOTIVE ENGINEERS MUTUAL LIFE & ACCIDENT INSURANCE ASSOCIATION, Plaintiff, v. Melissa I. LOCKE, Respondent, and Georgina Putnam, Appellant.
• Court: New York Court of Appeals Court of Appeals

277 N.Y. 584

13 N.E.2d 781

LOCOMOTIVE ENGINEERS MUTUAL LIFE & ACCIDENT INSURANCE ASSOCIATION, Plaintiff,

v.Melissa I. LOCKE, Respondent, and Georgina Putnam, Appellant.

Court of Appeals of New York.

March 1, 1938.

Appeal from Supreme Court, Appellate Division, Fourth Department, 251 App.Div. 146, 295 N.Y.S. 689.

Interpleader action by the Locomotive Engineers Mutual Life & Accident Insurance Association against Melissa I. Locke and Georgina Putnam. The relief sought by the plaintiff insurer was that plaintiff might be directed to pay the amount of the proceeds of the policy, the sum of $1,369.50, into court, and that the defendants might be ordered to interplead and settle between themselves the rights to the money.

On March 28, 1918, the plaintiff issued to Earl Locke a certificate of life insurance, in which his wife, the defendant Locke, was named as a beneficiary. On June 2, 1927, while the certificate was still effective, the insured and his wife executed a separation agreement containing among other covenants a provision that the husband in order to provide for the separate maintenance of his wife, after his death, would cause the policies to be assigned to the wife if they were not already payable to the wife, and agreed that the husband would maintain the insurance in full force in favor of the wife. The defendant Locke claimed that by such agreement she acquired for value a vested interest in the insurance represented by the original certificate and that the agreement constituted an equitable assignment of such insurance, thus depriving insured of his right to subsequently change the beneficiary.

Following the execution of the separation agreement, the insured and his wife lived apart until his death. Meantime the insured had taken up his residence as a boarder at the home of the defendant Putnam. In support of her claim, she asserted that in September, 1933, upon the insured's oral agreement that he would protect her financially during her lifetime and would make available to her the proceeds of his life insurance, she sold at less than its true worth a confectionery business. With the proceeds from such sale she established a boarding house, where the insured lived until his death.

In 1933, the constitution and by-laws of the insurer were amended to accomplish an increase in premium rates. The insurer required that all certificates outstanding should be surrendered in exchange for new certificates to be issued either...