Robinson v. New York Life Insurance Co.

• Court: Kansas Court of Appeals
• Writing for the Court: ELLISON, J.
• Citation: Robinson v. New York Life Insurance Co., 168 Mo.App. 259, 153 S.W. 534 (Kan. App. 1913)
• Decision Date: 03 February 1913
• Parties: ZOULA ROBINSON et al., Appellants, v. NEW YORK LIFE INSURANCE COMPANY, Respondent

153 S.W. 534

168 Mo.App. 259

ZOULA ROBINSON et al., Appellants, v. NEW YORK LIFE INSURANCE COMPANY, Respondent

Court of Appeals of Missouri, Kansas City

February 3, 1913

Appeal from Vernon Circuit Court.--Hon. B. G. Thurman, Judge.

AFFIRMED.

Judgment affirmed.

M. T January and S. A. Wight for appellants.

J. H McIntosh, Irwin Gordon, and Scott & Bowker for respondent.

OPINION

ELLISON, J.

--This action is based on a policy of life insurance. The judgment in the trial court was for the defendant.

Plaintiffs are the children of Almond B. Cockerill, and it appears from an agreed statement of facts that the defendant, in January, 1899, issued to him a policy of life insurance for ten thousand dollars, payable to his wife, or in the event of her dying before him, to his executors, administrators or assigns, "or to such other beneficiary as may be designated by the insured as hereinafter provided, at the home office of the company in the city of New York." The policy contained the further provision that the insured could at any time "change the beneficiary or beneficiaries by written notice to the company at its home office," etc.

On the 7th of March, 1903, Cockerill changed the beneficiary from his wife to these plaintiffs, his children. About two years afterwards, on the 20th of March, 1905, he changed from the latter beneficiaries to his executors, administrators and assigns.

Cockerill's wife died in July, 1905. In August, 1910, he and the defendant agreed that the policy should become "a paid-up policy for $ 1348." In about a year thereafter he died. The defendant then paid the latter sum to his administrator.

Plaintiffs' claim is that Cockerill's wife and children became possessed of a vested interest at the delivery of the policy, and that the changes of beneficiaries were void, being contrary to the statute, section 5854, Revised Statutes 1889, in force at the time the policy was issued. The case depends upon a construction of that section. It reads as follows:

"Any policy of insurance heretofore or hereafter made by any insurance company on the life of any person, expressed to be for the benefit of any married woman, whether the same be effected by herself or by her husband, or by any third person in her behalf, shall inure to her separate use and benefit, and that of her children, if any, independently of her husband and of his creditors and representatives, and also independently of such third person effecting the same in her behalf, his creditors and representatives; and a trustee may be appointed by the circuit court for the county in which such married woman resides, to hold and manage the interest of any married woman in such policy, or the proceeds thereof. In the event of the death of such married woman before her husband, the said policy shall inure to the children of such marriage, to the exclusion of creditors and executors and administrators of said husband, any technical words or phrases in the policy to the contrary notwithstanding."

The reasoning in plaintiffs' favor is like this: That the insurance is a Missouri contract and that the insurance laws of Missouri therefore became a part of it (Cravens v. Life Ins. Co., 148 Mo. 583, 50 S.W. 519) and that such Missouri law (the above statute) forbids a change of beneficiary; thus leaving the policy payable to the wife and children, or, in case she died, to the children alone.

Defendant agrees that the policy is a Missouri contract and that it embraces the Missouri statute. Defendant concedes that if the policy had been payable to the wife and had not contained a privilege of substituting another beneficiary, her interest would have been vested and the change from her therefore void. [U. S. Casualty Co. v. Kacer, 169 Mo. 301, 69 S.W. 370; Blum v. Insurance Co., 197 Mo. 513, 95 S.W. 317.] In other words, the defendant's position is that when a person is named unconditionally as beneficiary, such person takes a vested interest, which cannot be changed by the insured. But if a right of change is reserved in the policy, such change may lawfully be made. The effect of defendant's position is that the statute is a statute of exemptions and that it was not intended to interfere with the general law as to changes of beneficiaries. That its object was to secure a policy taken out in the name of a married woman, to her separate use for the benefit of herself and children, free from the claim of her husband's creditors; and in case of her death before her husband, to secure it to the children free from the husband's debts.

It is the general law that though a life policy is made payable to a certain person as beneficiary, yet if the right to change the beneficiary is reserved in the policy, it may be done, thereby divesting the original beneficiary. [U. S. Casualty Co. v. Kacer, supra; Blum v. Insurance Co., supra; Nally v. Nally, 74 Ga. 669.] Does the statute nullify or forbid such reservation? Plaintiffs insist that it does. The question was determined by the St. Louis Court of Appeals in Eves v. Woodmen of the World, 153 Mo.App. 247, 133 S.W. 657, wherein it was decided that the statute did not interfere with the contractual right of the parties to qualify the interest of the wife.

In the course of the opinion in that case it is pointed out that while the Supreme Court has not construed the statute, it has stated the general law to be that the interest of a beneficiary in a life policy is vested unless a right of divestiture is reserved. [Blum v. New York Life Ins. Co., 197 Mo. 513, 523, 95 S.W. 317; U.S....