Merchants' Nat. Bank of Mobile v. Hubbard

• Decision Date: 19 December 1929
• Docket Number: 1 Div. 572.
• Citation: 220 Ala. 372,125 So. 335
• Parties: MERCHANTS' NAT. BANK OF MOBILE v. HUBBARD.
• Court: Alabama Supreme Court

125 So. 335

220 Ala. 372

MERCHANTS' NAT. BANK OF MOBILE v. HUBBARD.

1 Div. 572.

Supreme Court of Alabama

December 19, 1929

Appeal from Circuit Court, Mobile County; Claude A. Grayson, Judge.

Action on a policy of life insurance by Emma P. W. Hubbard against the Prudential Insurance Company of America, the Merchants' National Bank of Mobile, as executor of the will of Ashbel Hubbard, deceased, substituted defendant. Judgment for plaintiff, and the substituted defendant appeals. Affirmed.

Edward W. Faith and Stevens, McCorvey, McLeod, Goode & Turner, all of Mobile, for appellant.

Smith &amp Johnston, of Mobile, for appellee.

THOMAS J.

The suit was by beneficiary in an insurance policy against the Prudential Insurance Company.

And the original defendant, the Prudential Insurance Company, by interpleader, brought in rival claimants for the proceeds of that life insurance contract. Marsh v. Mutual Life Ins Co., 200 Ala. 438, 76 So. 370; Fourth Nat'l Bank v. Woolfolk (Ala. Sup.) 125 So. 217. And, the funds being paid into court, upon motion, the Merchants' National Bank, as the executor of the will of assured claimed the money, and was substituted as defendant. It thereupon propounded its claim to the money deposited in court, to which plaintiff demurred, and the lower court sustained the demurrer on the theory that right and interest in and to said moneys was not shown by said claim. The claimant declined to plead further, and judgment was rendered awarding the money to the original plaintiff; and substituted defendant appealed.

A decision involves the construction of a separation agreement between the assured and his wife, the named beneficiary. It may be observed that the validity of such contracts has been recognized by this court, Sullivan v. Sullivan, 215 Ala. 627, 111 So. 911; and that the most solemn contracts are read in the light of the surrounding circumstances in an effort to ascertain the true intent of the parties, where the same is of an ambiguous or doubtful import, and necessary to arrive at the true sense in which the parties employed the words of the writing, Obermark v. Clark, 216 Ala 564, 114 So. 135, 55 A. L. R. 1153; Russell v. Garrett, 208 Ala. 92, 93 So. 711; Fowlkes v. Clay, 205 Ala. 523, 525, 88 So. 651; Roach v. McDonald, 187 Ala. 64, 65 So. 823; McGehee v. Alexander, 104 Ala. 116, 16 So. 148.

The pertinent paragraph of the separation agreement is as follows: "It is the purpose of this contract to so provide that the said Emma Price Williams Hubbard shall, and she does hereby accept, the said annuity and cash payments and the other benefits hereby secured to her, in full and absolute payment of and in lieu of any and all rights she may have or claim to have to any property, choses in action, rights or funds that may belong to said Ashbel Hubbard or may have been provided by him in any form whatsoever, all of which she does hereby grant, bargain, sell and deliver to him, and she shall and will at any time, upon request of said Ashbel Hubbard execute whatever documents may be or become necessary or desirable for the purpose of releasing and further vesting the same in him, or his nominee, save only those things which have been herein above provided to be vested in her."

The inquiry is: Were the parties contracting as to their present properties and rights, or did they intend for their contract to embrace a mere possibility or mere hope of acquiring property in the future? 2 Fearne on Remainders, p. 23, VII.

In Clements v. Faulk & Co., 181 Ala. 222, 61 So. 264, two of several children conveyed their undivided interest, and one of the other children subsequently died intestate; and it was held that an interest in such moiety of the deceased child did not pass to the grantee under the covenants of warranty as to title in the deed preceding the death of the last indicated child. See the recent case of Powell v. Pearson (Ala. Sup.) 125 So. 39. This court has attributed to a quitclaim deed the quality of a common-law release. Garrow v. Toxey, 171 Ala. 644, 651, 54 So. 556; Harrison v. Boring, 44 Tex. 255, 261; Van Rensselaer v. Kearney, 11 How. 322, 13 L.Ed. 703; United States in Hanrick v. Patrick, 119 U.S. 175, 7 S.Ct. 147, 30 L.Ed. 396.

In Cook v. Conway, 2 Cranch, C. C. 99, 6 Fed. Cas. 385, No. 3154, an assignment of all of the assignor's estate and effects in possession, or which may accrue or become due and owing, held not to assign a "mere possibility of a legacy." And that of conveyance of all personal property possessed at this date held not to extend to the proceeds of an annuity. Taylor v. Vail, 80 Vt. 152, 66 A. 820. And in Fearne on Remainders, p. 23, a chance, mere hope, or bare possibility is thus stated:

"VII. An expectancy or chance is a mere hope unfounded in any limitation, provision, trust, or legal act whatever; such as the hope which an heir apparent has of succeeding to the ancestor's estate. This is sometimes said to be a bare or mere possibility, and, at other times, less than a possibility. It is a possibility in the popular sense of the term. But it is less than a possibility in the specific sense of the term possibility. For, it is no right at all, in contemplation of law, even by possibility; because, in the case of a mere expectancy, nothing has been done to create an obligation in any event; and where there is no obligation, there can be no right; for right and obligation are correlative terms."

See extended discussion of the authorities touching such estates contained in Powell v. Pearson; Slaughter v. Grand Lodge, 192 Ala. 301, 68 So. 367.

What did the parties intend their agreement to embrace? We may look to their situation or circumstances, having regard for their ends or objects to be obtained and effected, their subsequent constructions of equivocal words or clauses. If the terms employed warrant, they may be aided by the rule ejusdem generis, which ordinarily limits the meaning of general words and things to the class or enumeration employed. 2 Words and Phrases, Second Series, p. 225; 19 C.J. p. 1255; State v. Western U. Tel. Co., 196 Ala. 570, 572, 573, 72 So. 99; Montgomery L. & P. Co. v. Avant, 202 Ala. 404, 80 So. 497, 3 A. L. R. 384; Perry v. Southern Express Co., 202 Ala. 663, 81 So. 619; McSwean v. McSwean, 204 Ala. 663, 86 So. 646; City of Montgomery v. Smith, 205 Ala. 557, 88 So. 671; authorities in State v. Goldstein, 207 Ala. 574, 93 So. 308; Central of Ga. v. State, 145 Ala. 99, 102, 40 So. 991; Prim v. State, 36 Ala. 244; Johnson v. State, 32 Ala. 583; Gilbreath v. State, 15 Ala. App. 588, 74 So. 723.

The vested and present interests are comprehended in paragraph 4 of the agreement. And the words, "or may have been provided by him in any form whatsoever," are within the ejusdem generis rule; and did not embrace mere possibilities or a bare hope or expectancy.

Mrs. Hubbard's interest was not more than a mere possibility, for the reasons: (1) The assured had the liberty to change the beneficiary on request and without the assent of the beneficiary named; (2) he had the policy in his possession and could surrender, cancel, or assign it, as he saw fit; (3) he could permit the same to lapse for nonpayment of premiums, etc.; and (4) in the event of the death of the beneficiary named before that of assured, by its express terms, the proceeds thereof were made payable to assured's estate or personal representative. The foregoing indicates that Mrs. Hubbard had no (then) present or vested interest in the proceeds of the policy.

It is insisted that the policy was the property of the beneficiary. In Cohen v. Samuels, 245 U.S. 50, 38 S.Ct. 36, 62 L.Ed. 143, having the right to surrender value and that of the change of beneficiary, held the trustee in bankruptcy of the estate of assured was vested, by operation of law, with the title to the property, to the extent of its "cash surrender value," as that of the bankrupt rather than some prospective beneficiary that amounted to no more than a mere hope or possibility.

In the case of Pope v. Carter, 210 Ala. 533, 98 So. 726 the policy was payable to the estate of assured, and held property...