Pashuck v. Metropolitan Life Insurance Co

• Citation: 188 A. 614,124 Pa.Super. 406
• Decision Date: 21 December 1936
• Docket Number: 76-1936
• Parties: Pashuck, Admr., Appellant, v. Metropolitan Life Insurance Co
• Court: Superior Court of Pennsylvania

188 A. 614

124 Pa.Super. 406

Pashuck, Admr., Appellant, v. Metropolitan Life Insurance Co

No. 76-1936

Superior Court of Pennsylvania

December 21, 1936

Argued October 22, 1936

Appeal by plaintiff, from judgment of M. C. Phila. Co., April T. 1934, No. 450, in case of Anthony D. Pashuck, administrator of Estate of John Nodziak, deceased, v. Metropolitan Life Insurance Company, interpleaded with Alexandra Buraczewska.

Interpleader in equity. Before Bonniwell, J.

The facts are stated in the opinion of the Superior Court.

Verdict directed for defendant in interpleader and judgment entered thereon. Plaintiff appealed.

Error assigned, among others, was direction of verdict for defendant.

Judgment affirmed.

Ralph S. Croskey, with him Edward S. Lawrence Jr., for appellant.

Otto W Woltersdorf, for appellee.

Before Keller, P. J., Cunningham, Baldrige, Stadtfeld, Parker, James and Rhodes, JJ.

OPINION

Stadtfeld, J.

This is an interpleader under the Act of March 11, 1836, P. L. 76, Sec. 4, 12 PS 581.

On June 29, 1931, Metropolitan Life Insurance Company issued its policy of life insurance upon the life of John Nodziak in the sum of $ 702, payable to his executor or administrator or under the "Facility of Payment Clause," to any relative by blood or connection by marriage of the insured, or to any other person appearing equitably entitled to the same by reason of having incurred expense on behalf of the insured. There was no beneficiary endorsed on the policy when the same was issued, but on July 3, 1931, the company endorsed the name of the appellee, Alexandra Buraczewska, on the policy, naming her as beneficiary. The policy is silent as to any right of change of beneficiary.

John Nodziak died of natural causes, after an illness at the Germantown Hospital, on December 7, 1933.

Letters of Administration were granted to the plaintiff who entered suit on the policy against the company. The proceeds of the policy were also claimed by the beneficiary, the appellee, Alexandra Buraczewska.

The insurance company, having had demands made upon it by two different claimants, interpleaded and the money was paid into court.

The plaintiff's case was established by admissions of the facts above stated and by offer of the insurance policy referred to with the endorsement thereon, and rested. The defendant, by her witness, offered testimony to show that she loaned the decedent, the insured, $ 500 about February 1, 1931, and that he lived in her house and that when the policy was delivered to the insured, he gave it to the defendant stating that he had made her the beneficiary of the policy.

The assured and defendant were not related and he was a boarder in her home, the appellee paying all the premiums. Attached to the policy was a rider providing for accidental death benefits equal to the face amount of the policy.

The trial judge directed a verdict for the defendant, the appellee, and the plaintiff filed a motion for judgment n. o. v. and for a new trial. Both motions were refused in an opinion by Bonniwell, J., and judgment entered on the verdict. This appeal by plaintiff followed.

The "Facility of Payment Clause" need not be considered, as the company, for whose benefit the clause was inserted, did not exercise any rights thereunder when it saw fit to pay the money into court: Yelda v. W. & S. Life Ins. Co., 99 Pa.Super. 513; Williard v. Prudential Insurance Company, 276 Pa. 427, 120 A. 461.

As stated by the lower court, the plaintiff in merely offering in evidence the policy bearing the endorsement thereon designating the appellee as beneficiary, and resting his case, did not meet the burden on him to warrant a recovery in his favor.

The appellee claims the proceeds of the policy here in question, first, because she had been designated as beneficiary by endorsement thereon, and secondly, because she was a creditor of the insured and incurred expense on his behalf and for this reason, even if not named as beneficiary, she would still be entitled to the proceeds of the policy under the "Facility of Payment Clause." As to the latter clause, as already stated, she would not have any cause of action.

Appellant contends that no right to change the beneficiary having been reserved in the policy, the subsequent designation of appellee as beneficiary was a nullity. Ordinarily where the designation of the beneficiary in the policy is absolute and unconditional, because the right to change the beneficiary is not expressly reserved to the insured, the beneficiary has a vested interest in the policy and cannot be deprived of its proceeds by anything the insured may do without the beneficiary's consent: Knoche, Admr. v. Mutual Life Insurance Co., 317 Pa. 370, 176 A. 230. However, as stated in that case, at p. 372: "This right is subject, however, to the terms and conditions of the policy."

In the instant case, the policy provided under the heading of "Conditions": "Its terms cannot be changed, or its conditions varied, except by the express agreement of the company, evidenced by the signature of its President or Secretary." This impliedly gave the right to make a change in the manner specified. Endorsed on the policy was the following: "Subject to the provisions of the policy authorizing payment at the company's option to other persons, Alexandra Buraczewska, sister, has been designated beneficiary to receive death benefit only. W. C. Fletcher, Secretary." The policy also provided for certain "cash surrender value" at various periods upon surrender of the policy. The provision in the policy for payment "to the executor or administrator of the insured," under the circumstances, can not be said to have given a vested interest in the executor or administrator, as neither were in esse at the time, and where subsequent to the issuance of the policy, pursuant to its terms, another beneficiary was designated.

If the right to name or change the beneficiary existed in the insured, the specified beneficiary supersedes any personal representative insofar as the right to the proceeds of the policy is concerned. The executor or administrator would not therefore, be entitled to collect on the policy under such circumstances.

Appellant contends that appellee had no insurable interest in the life of John Nodziak, the insured, and invokes the Act of May 17, 1921, P. L. 682, Art. IV, Sec. 412, 40 PS 512. This Act provides: "No policy or agreement for insurance shall be issued by any stock or mutual life insurance company in this commonwealth except upon the application of the person insured. . . . Any person may insure his own life for the benefit of any person, copartnership, association, or corporation, but no person shall cause to be insured, the life of another, unless the beneficiary named in such policy or agreement of life insurance, whether himself or a third person, has an insurable interest in the life of the insured. . . ."

The purpose of this Act of Assembly was to prevent wagering contracts on the life of another by...