McManus v. Peerless Cas. Co.

• Decision Date: 21 October 1915
• Citation: 95 A. 510
• Parties: McMANUS v. PEERLESS CASUALTY CO.
• Court: Maine Supreme Court

95 A. 510

McMANUS

v. PEERLESS CASUALTY CO.

Supreme Judicial Court of Maine.

Oct. 21, 1915.

Exceptions and Motion from Supreme Judicial Court, Cumberland County, at Law.

Action by Katharine L. McManus against the Peerless Casualty Company. Verdict for plaintiff, and defendant excepts and moves for new trial. Exceptions sustained.

Argued before SAVAGE, C. J., and SPEAR, KING, BIRD, and HALEY, JJ.

Clement P. Robinson and Arthur L. Robinson, both of Portland, for plaintiff. Charles G. Keene, of Portland, Barrett Potter, of Brunswick, and Anthoine & Anthoine, of Portland, for defendant.

SPEAR, J. This is an action in assumpsit on a policy of insurance issued by the defendant company to George M. McManus, late of Brunswick, whose widow and beneficiary is the plaintiff. The policy provides for the payment of $5,000 to the beneficiary in the event of the death of the insured by accident. The insured died on February 21, 1914, as a result of an accident which occurred on February 2, 1914, as admitted by the defendant, but the defendant disputed liability because of certain statements appearing in the application annexed to the policy.

As the exceptions are decisive in this case, there is no occasion to consider the motion. The main question in the exceptions was whether McManus' occupation was truly stated in the application. The statements in the application were warranted by him "to be complete and true and material and binding," and the warranty was reaffirmed in the policy, and a copy of the application was indorsed on the policy. Accordingly, untrue answers in the application would make the policy void. Johnson v. Insurance Co., 83 Me. 182, 22 Atl. 107; Marston v. Insurance Co., 89 Me. 266, 36 Atl. 389, 56 Am. St. Rep. 412; Strickland v. Casualty Co., 112 Me. 100, 90 Atl. 974. In the latter case it is said:

"That statements in the application untrue in fact vitiate the policy is settled law."

The defendant contends that the application said McManus was a hotel proprietor and teaming contractor, supervising only. It was admitted that he operated a summer hotel or boarding house, but claimed that he was also a farmer and a teamster, and, if so, the policy was void, and for two reasons: (1) Because the answer was untrue; and (2) because the occupations of farming and teaming were classified by the defendant in its manual as more hazardous than was stated in the application. On this issue, touching the truth of the application, the defendant was allowed to go back in the introduction of testimony to September, 1912 14 months before the date of the application, to show what the occupations of the insured were during that time, and numerous witnesses testified that he was then both a farmer and a teamster; the defendant relying upon the presumption of the continuance of such occupation. 16 Cyc, Evidence, 1052-1054; Greenleaf, Evidence, par. 41. The defendant then offered three exhibits. They were all applications of McManus to the Prudential Insurance Company of America for the reviving of policies on his life previously issued by that company which had lapsed for nonpayment of premiums. They were dated November 14, 1912, July 11, 1913, and October 24, 1913, respectively; that dated October 24, 1913, being within 10 days of the date of the application upon which the policy in suit was issued. McManus was called upon in each of these applications to state what his occupation was at the time of the application, and in each said he was a farmer. These exhibits were offered to corroborate the witnesses who had testified that McManus was a farmer. They were excluded. The question therefore is whether the admissions of the insured were admissible against his beneficiary. If McManus were living and had brought an action on the policy to recover a sick benefit, no doubt the Prudential applications would have been admissible against him. Is his widow and beneficiary so in privity with him that they are admissible against her? This is the only question on this branch of the case. And this further depends upon the inquiry whether the widow and beneficiary by the terms of the policy had a vested interest in the policy. Article 20(d) of the policy provides that:

"The consent of the beneficiary shall not be requisite to the surrender of this policy nor to a change of beneficiary."

It is claimed that this provision is decisive of the question at issue. The line of demarcation between a vested interest and a contingent interest in a life or accident policy is found in the terms of the contract. This line is also usually found in the character of the policy. The old-line policies usually create a vested interest; the fraternal policies, it may be said, usually do not. If the policy reserves no right of control in itself or in the procurer over the interest provided for the beneficiary, the policy the moment it is issued creates a vested interest in the beneficiary therein named. This was expressly held in Laughlin v. Norcross, 97 Me. 33, 53 Atl. 834. If the contract reserves the right to modify the policy or change the beneficiary without the consent of the beneficiary, then it creates a mere expectancy. "A vested interest is where there is an immediate fixed right of present or future enjoyment." See Vested Interest, Words and Phrases, vol. 8. p. 7323. Again:

"It is not the uncertainty of enjoyment in the future, but the uncertainty of the right to that enjoyment, which makes the difference between a vested and a contingent interest." Id.

Again:

"Vested interest can mean nothing else than an interest in respect of which there is a fixed right of present or future enjoyment." Id. 7304.

In 29 Cyc. 126, C, under the head "Right to Make Change as Against Original Beneficiary," it is said:

"The cases as to the right of a member of a beneficiary' society as against the person originally designated by him, to substitute another beneficiary in place of that person, are not in accord. By the weight of authority, however, if there is nothing to the contrary in the statute, or in the society's charter or laws, or in the certificate of insurance, the...