Mutual Ben. Life Ins. Co. v. Willoughby

• Decision Date: 10 April 1911
• Docket Number: 14,993
• Citation: 54 So. 834,99 Miss. 98
• Court: Mississippi Supreme Court
• Parties: MUTUAL BENEFIT LIFE INSURANCE CO. v. ROBERTA WILLOUGHBY

54 So. 834

99 Miss. 98

MUTUAL BENEFIT LIFE INSURANCE CO. v. ROBERTA WILLOUGHBY

No. 14,993

Supreme Court of Mississippi

April 10, 1911

APPEAL from the circuit court of Lincoln county, HON. D. M. MILLER Judge.

Suit by Mrs. Roberta Willoughby against the Mutual Benefit Life Insurance Company. From a judgment for plaintiff, defendant appeals.

The facts are fully stated in the opinion of the court.

Case affirmed.

Cochran & McCants, for appellant.

A life insurance policy is a mere chose in action, and may be pledged, transferred or assigned just as any other chose in action.

In Lanier, Admr. v. Box, Admr., 64 L. R. A. 458, the terms of the policy were identical with the terms of the policy before the court, and the court said in that case, "we think upon the authorities, there can be no doubt of the absolute control of the insured over this policy to the extent, at least, of the contingent interest which he had in it, and that an assignment made by him or a disposition of it by his will would convey to his assignee or his legatee whatever interest might accrue to him from this policy."

In Heer v. Reinoehl, 58 A. 862, an assignment of the contingent interest of the wife, on a policy of insurance on the life of the husband before his death was held to be valid and binding on the wife.

If the insured had a right to pledge or assign his interest in the policy, then the result and conclusion is inescapable that he had a right to borrow money on it from appellant, even though the contingent interest of the appellee in the policy was thereby defeated. Union Central Life Ins. Co. v Wood, 37 N.E. 180; Taylor v. New York Life Ins Co., 90 N.E. 968; Omaha Nat. Bank v. Mutual Life Ins. Co., 84 F. 122; Tate v. Mutual Benefit Life Ins Co., 42 S.E. 892.

In procuring the policy to be issued and paying the premiums, the insured acted as the agent of the appellee for whatever interest she had in the policy, and she is bound by his acts and representations made within the scope of his authority. Bradstreet Co. v. Robert Gill, 2 L. R. A. 405; Sarah G. M. Miles v. Conn. Mut. Life Ins. Co., 37 U.S. Rep., Lawy. Ed., p. 128.

Counsel for appellee seem to misconceive the authorities which they cite from this court. What was said by the court in Johnson v. Bacon, 92 Miss. 156, was said of and about an ordinary life policy, and has no sort of application to the instant case. That authority simply states the general rule applicable to the class of contracts involved in that case.

We believe John Marshall said that the authority of every case ceased with the facts of that particular case.

Counsel say in their brief that the case of the Bank v. Williams, 77 Miss. 398, "is on all-fours with the case at bar" and seem to be just a little impatient with us, because we do not admit that that authority settles the whole controversy. Again we say that in our opinion counsel misconceive that authority. We insist that the Williams case does not apply to the contract involved in the case at bar. The policy in the Williams case was an ordinary life policy, pure and simple. The incorporation in the policy of the provision that if the wife pre-deceased the insured that the policy would be payable to the insured's legal representatives in no wise affected the legal character of the contract, and is without legal significance.

If the wife had died before her husband, her interest in the policy would have terminated, and the policy would have become payable to the husband's legal representative by operation of law. Tompkins v. Levy, 87 Ala. 263.

Williams was compelled to pay the premiums until he died in order to keep the policy in force, and in no event could he receive any benefit from the policy. The policy, therefore, was an ordinary life policy, and that character of policy was in the mind of the court when it wrote the opinion in the Williams case.

We think the statute quoted in the opinion settles it, that the possession of the policy by the wife was not necessary in order to enable her to acquire a vested interest in the policy, but it seems to us that it could have no other application to the case, because the statute, and the policy under the general rules applicable to ordinary life policies, accomplish the same result, so far as the indefeasible interest of the wife in the policy was concerned.

The statute could not apply to the policy under consideration except on the question of exemption, because it designates two beneficiaries.

The policy in the instant case was a twenty-year limit payment, and was payable to appellee in case she survived the insured, otherwise to the insured, his executors, administrators or assigns.

The probabilities were just as great that the insured would survive the appellee as they were that appellee would survive the insured. The insured therefore had as great an interest in the policy as appellee. If the insured had survived appellee, he could have exercised all the domination over the policy that he could have had over any other property.

Counsel make no answer to our argument and the authorities cited to the point that the insured, under the terms of the policy, had a right to borrow money on the policy and that the loans he procured from the appellant must first be deducted before there could be any extended insurance. They do admit, however, that if the loans are to be deducted that the policy was forfeited by the non-payment of the premiums before the death of the insured.

It seems to us that their criticism of the Miles case is altogether unsatisfactory. If that high authority holds anything, it holds that the insured was the agent of appellee and that appellant had a right to rely on his representations, that he was unable to pay the premiums and that he wanted to surrender the policy. If he was her agent, and be was, according to the highest authority in this country, then he was her agent under the facts of this case, then he surrendered the policy and received its cash surrender value whether the appellee signed the surrender receipt or not.

We respectfully submit that the court erred in refusing a peremptory instruction for appellant.

George B. Power and Willing & Davis, for appellee.

It is a well established principle of insurance law that in ordinary life insurance policies, where no power of disposition is reserved in the insured, the beneficiary in the policy, upon the issuance of the policy, acquires a vested right therein, which cannot be impaired or defeated without his consent. See Elliot on Insurance, 354; Bliss on Insurance, 2d Ed. 517; Cook on Life Insurance, § 74, note; 2d Joyce on Insurance, § 730, 25 Cyc., 778-6, and numerous authorities cited in notes 97 thereunder; Central Bank v. Hume, 128 U.S. 195; Pence, Admr. v. Makepeace, 65 Ind. 345; Hendri & Blotfoff M. F. G. Co. v. Platt, 13 Col. App. 15; Stigler, Ex'x., v. Stigler, 77 Va. 163; Harley v. Heist, 86 Ind. 196; Hooker v. Sugg, 102 N.C. 115; Griffith v. Insurance Co., 101 Cal. 627; In re Dobbel, 104, 432; Garner v. Germania Life Ins. Co., 110 N.Y. 266; Jones v. Patty, 73 Miss. 179; Bishop v. Curphy, 60 Miss. 23; Cozine v. Crimes, 76 Miss. 200; Bank v. Williams, 77 Miss. 398; Johnson v. Bacon, 92 Miss. 156; Grege v. Grege, 78 Miss. 443.

In the case of Bank v. Williams, 77 Miss., supra, which case is on all fours with the case at bar, the court held that life insurance policy designating a beneficiary is the property of the beneficiary the moment of its issuance, whether then delivered to him or not, and the producer of a life insurance policy designating another as beneficiary has no power, without the beneficiary's consent to transfer any interest in it to a third party by deed or will.

Counsel for appellant contended in the next place that in procuring the policy to be issued and in paying the premiums, the insured acted as the agent of the appellee for whatever interest she had in the policy, and that she is bound by his acts and representatives made within the apparent scope of his authority. All the authorities are against this proposition; indeed our own court has expressly decided to the contrary in the cases of Bank v. Williams, 77 Miss. and Johnson v. Bacon, 97 Miss., supra.

Counsel cited only one authority in support of this contention, namely, Sarah C. Miles v. Connecticut Life Insurance Co., 37 U. S. Rep., Lawyer's Ed., page 178. The reason the wife failed to recover on the policy in the above cited case was because the husband failed to keep up the premiums.

It is indeed the general rule that a policy, and the money to become due under it, belong, the moment it is issued, to the persons named in it as the beneficiary or beneficiaries, and that there is no power in the person procuring the insurance, by any act of his, by deed or by will, to transfer to any other person the interest of the person named. Bliss, Life Ins., 2d Ed., p. 517; Glanz v. Gloeckler, 10 Ill.App. 486, per McAllister, J. S. C., 104 Ill. 573; Wilburn v. Wilburn, 83 Ind. 55; Ricker v. Charter Oak Life Ins. Co., 27 Minn. 193; Charter Oak Life Ins. Co. v. Brant, 47 Mo. 419; Gould v. Emerson, 99 Mass. 154; Knickerbocker Life Ins. Co. v. Weitz, Id., 157.

The case of Jackson Bank v. Lula B. Williams, 77 Miss. supra, is exactly like the case at bar, and the court held contrary to all the propositions advanced by counsel for appellant. An examination of the record will show that that case is identical with the policy sued on in the instant case.

OPINION

MAYES, C. J.

An extended discussion of the facts of this case seems unnecessary. In truth, there is very little room for dispute in the attitude in which this record now comes to us, after the verdict of the jury finding that Mrs. Willoughby did not sign any of the...