Sullivan v. Maroney

• Decision Date: 11 June 1909
• Citation: 73 A. 842,76 N.J.E. 104
• Parties: SULLIVAN et al. v. MARONEY et al.
• Court: New Jersey Court of Chancery

73 A. 842

76 N.J.E. 104

SULLIVAN et al.

v. MARONEY et al.

Court of Chancery of New Jersey.

June 11, 1909.

Suit by Dennis J. Sullivan, as next friend, against John F. Maroney and others. Heard on bill, answers, replications, and proofs in open court. Decree for complainants.

This is a bill filed by the next friend of four infants to secure the proceeds of a life insurance policy. The defendants are the life insurance company and those who claim adversely to the complainants. The life insurance company defaulted, and a decree pro confesso has been taken against it.

Merritt Lane, for complainants.

Mark A. Sullivan, for answering defendants.

GARRISON, V. C. John F. Maroney was a life insurance agent doing business in Jersey City. Edward and Margaret Cahill, husband and wife, were people of the working class living in Jersey City. Marie Schaefer, subsequently married to McCabe, was a sister of Maroney's wife. In January of 1906 Maroney induced the Cahills to take out $12,000 worth of life insurance, $6,000 on the life of each. These policies were as follows: On the life of Margaret, $3,000 in the Equitable Insurance Company, payable to Edward; $2,000 in the State Life Insurance Company of Indianapolis, payable to the four children of the parties (the complainants); $1,000 in the State Life aforesaid, payable to Edward; on Edward's life, $3,000 in the Equitable Insurance Company, payable to Margaret; $2,000 in the State Life Insurance Company of Indianapolis, payable to Margaret; $1,000 in the State Life aforesaid, payable to Margaret. The premiums on all these policies taken together for the first year amounted to $315. Maroney, who attended to all of the business, and acted as agent in the entire transaction, testifies that he secured the money to pay the premiums from Marie Schaefer (now McCabe) by an agreement between her and the Cahills, which was that she was to pay these premiums and was to have assigned to her all of the policies excepting the policy for $1,000 on the life of Edward, payable to Margaret, issued by the State Life Insurance Company. He also says that she was to pay $35 more than all of the premiums; that is to say, she was to pay $350, instead of $315, and that this extra $35 was to go to Mrs. Cahill. And, further, he says that it was agreed that she should pay all of the debts of Margaret Cahill which were owed by the latter at the time of her death, and, further still, he said that, as part of the agreement. $200 out of any insurance collected on the life of Margaret was to be paid to Edward. He asserts that he obtained the money to pay these premiums from Miss Schaefer shortly after the time that the policies were taken out in 1906, and that it was at that time, that the agreement was made. In January of 1907 Mrs. Cahill was seriously ill of the, disease of which she died on the 2d of March, 1907, and while in bed she signed assignments of the policy in question, and at or about the same time Edward Cahill signed assignments to Marie Schaefer of the $3,000 policy in the Equitable Life and the $1,000 policy in the State Life, on the life of Margaret, payable to him. No assignments were ever procured from Margaret on the $3,000 policy on Edward's life payable to her, issued by the Equitable, or of the $2,000 policy in the State Life on the life of Edward, payable to her, nor of the $1,000 policy in the State Life on the life of Edward, payable to Margaret. The last-named policy was not to be assigned, but was agreed to be kept up for the benefit of Margaret, according to Maroney's testimony.

This controversy concerns the $2,000 policy in the State Life Insurance Company of Indianapolis, Ind., issued on the 16th of January, 1906, on the life of Margaret, payable to the four children. Although Maroney and Schaefer each testify that the agreement was made and the premiums paid over by her to Maroney, and by Maroney to the company in January or February of 1906, it is very difficult for me to believe this. I incline to the opinion that no payment was made to the company for the first year—robably Maroney's commissions were sufficient to at least satisfy the first year's premiums—and the fact, I believe, is that the first payment was actually made at the beginning of the second year, which was the time when the assignment was obtained. Undoubtedly these policies were taken out by Maroney in a spirit of speculation. There is not the slightest pretense that the Cahills were ever in the position to take out any such amount of insurance, or to pay for any insurance at all out of their meagre means. At the time that the assignments were obtained from Margaret Cahill and from Edward Cahill, Margaret was a very sick woman, and was dying, and shortly afterwards died. It will be observed that assignments were only obtained for those policies which were upon her life. No assignments were obtained upon the policies upon the life of Edward. Part of the agreement, Maroney says, was that the debts due by Margaret Cahill at her death should be paid by Miss Schaefer, as a portion of the consideration; and he also says that it was agreed that $200 out of the insurance collected upon Margaret's death should go to Edward, her husband. It is inconceivable to me that any such agreements were made in January of 1906, when, so far as it appears, Margaret was in good health, and there was no reason to suppose that she would either die soon, or would die before her husband. However this may be, the taking out of the policies was a pure speculation, as was the participation therein of Miss Schaefer. As has been before stated, Margaret Cahill died on the 2d day of March, 1907, and the policy of $3,000 on her life in the Equitable has been collected by Miss Schaefer, as has the $1,000 policy in the State Life. It will be recalled that each of these policies on the life of Margaret were payable to Edward, and were by him assigned, in January of 1907, by virtue of the alleged agreement of January, 1906, to Miss Schaefer.

The assignment of the policy in suit is in the following terms: "Form of Assignment Otherwise Than as Collateral Security. To be attached to and retained with the policy for use as evidence when required. For one dollar, to me in hand paid, and for other valuable consideration (the receipt of which is hereby acknowledged) I hereby assign, transfer and set over all my right, title and interest in policy No. 149, 191 on the life of (myself) Margaret Cahill issued by the State Life Insurance Company of Indianapolis, Ind., and all money which may be payable under same to Marie Schaefer of Hoboken, N. J., whose P. O. address is 612 Washington street, and for the consideration above expressed I do also for my executors and administrators guarantee the validity and sufficiency of the foregoing assignment to the abovementioned assignee, her executors, administrators and assigns; and the title to the said policy will forever warrant and defend. In witness whereof, I have hereunto set my hand and seal, this 19th day of January, 1907. Margaret Cahill. Edward Cahill."

The policy provisions which are material are in the following language:

"The State Life Insurance Company of Indianapolis, Ind., hereby insures the life of Margaret Cahill, of Jersey City, state of New Jersey (hereinafter called the insured) and agrees to pay the sum of two thousand dollars at the home office of the company at Indianapolis, Ind., to Dennis, Edward, Katie, and William Cahill, her children, share and share alike (or to such other beneficiary or beneficiaries as may be designated by the insured as hereinafter provided), if living, otherwise to the insured's executors, administrators or assigns, upon receipt and approval of proofs of the death of the insured, this policy being then in force, less any indebtedness of the insured or beneficiary to the company."

"Assignment. This policy may be assigned upon written approval of the president, but the company will not assume any responsibility for the validity of any assignment."

"Change of Beneficiary. The insured may, at any time during the continuance of this policy, provided the policy is not then assigned, and subject to the rules of this company regarding assignments and beneficiaries, change the beneficiary or beneficiaries by written notice to the company, at its head office; such change to take effect on the endorsement of the same on the policy by the company."

The bill sets out the issuance of the policy, the death of Margaret Cahill, the fact that the policy is in the possession of John Milton, who claims to hold the same on behalf of Marie Schaefer, now McCabe, and John F. Maroney, and that there has been no valid assignment or valid change of beneficiary which, in law, deprives the complainants (the four children named in the policies as beneficiaries) of their rights thereunder, and prays that it may be so adjudged. The defense rests upon the assignment heretofore quoted.

It will be observed from a reading of the policy that the contract was, upon the death of Margaret Cahill, to pay the Insurance money either to the four children, if they were living at the time of their mother's death, otherwise to the mother's executors, administrators, or assigns. There were therefore always two sets of interests in this policy—the beneficiaries (who would get the money if they were living at the death of the insured), and the representatives of the insured (to whom the money would...