Tyler v. Treasurer & Receiver General

• Citation: 115 N.E. 300,226 Mass. 306
• Parties: TYLER v. TREASURER AND RECEIVER GENERAL. PARKER v. SAME. ATTORNEY GENERAL ex rel. BURRILL v. PIERCE.
• Decision Date: 06 March 1917
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

226 Mass. 306

115 N.E. 300

TYLER

v.TREASURER AND RECEIVER GENERAL.

PARKER

v.SAME.

ATTORNEY GENERAL ex rel. BURRILL

v.PIERCE.

Supreme Judicial Court of Massachusetts, Suffolk.

March 6, 1917.

Appeal from Supreme Judicial Court, Suffolk County.

Consolidated actions by Isabel P. Tyler, administratrix, and Morgiana H. Parker, against the Treasurer and Receiver General, and information in equity by the Attorney General, on the relation of Charles L. Burrill, against Amy P. Pierce. From a judgment for the petitioners in the first two cases, the respondents appeal. Judgment affirmed. Information of Attorney General in latter case dismissed.

Wm. A. Morse, of Boston (Jas. H. McIntosh, of New York City, of counsel), for appellants.

Henry C. Attwill, Atty. Gen., and Wm. H. Hitchcock, Asst. Atty. Gen., for Treasurer and Receiver General.

Chas. H. Fiske, Jr., of Boston, for appellee Parker.

Hudson & Nichols, of Boston (Philip Nichols, of Boston, of counsel), for appellee Tyler.

RUGG, C. J.

The question raised in these cases is whether money paid to the beneficiary under a policy of life insurance is subject to the succession tax. The policies here in question all are well recognized forms of genuine life insurance. Manifestly money so paid does not pass ‘by will or by the laws regulating intestate succession.’ But it is contended in behalf of the Treasurer and Receiver General that it is comprehended within these words of St. 1912, c. 678, as amended by St. 1913, c. 498:

‘All property within the jurisdiction of the commonwealth, corporeal or incorporeal, and any interest therein, belonging to inhabitants of the commonwealth * * * which shall pass * * * by deed, grant or gift, except in cases of a bona fide purchase for full consideration in money or money's worth, made or intended to take effect in possession or enjoyment after the death of the grantor, * * * shall be subject to a tax.’

Confessedly the beneficiary of each of the insurance policies in the cases at bar receives nothing by way of ‘deed’ or ‘grant.’ Hence the only word of the statute which can be argued to be operative is ‘gift.’

A policy of life insurance is a contract. It is commonly a tripartite agreement, to which the parties are the insured, the insurer, and the beneficiary. A policy of life insurance is a contract for a consideration paid, usually in money, in one sum or at different times during the continuance of the risk, which involves the payment of money or other thing of value by the insurer to the family, kindred, representative, or other designated beneficiary of the holder of the policy, conditioned upon the continuance or cessation of human life, or which involves a guaranty, assurance, or pledge of an endowment or an annuity. Com. v. Wetherbee, 105 Mass. 149, 160. See St. 1907, c. 576, § 66; Curtis v. N. Y. Life Ins. Co., 217 Mass. 47, 104 N. E. 553, Ann. Cas. 1915C, 945.

The rules applicable to the interpretation and enforcement of policies of life insurance are those which govern contracts. Davis v. N. Y. Life Ins. Co., 212 Mass. 310, 98 N. E. 1043,41 L. R. A. (N. S.) 250.

While, speaking with technical accuracy, a beneficiary is not a party to a policy of life insurance, and could not at common law maintain an action in his own behalf, yet he has an equitable interest in the policy and can maintain an action for his own benefit in the name of the personal representatives of the insured, and by statute is enabled to bring an action in his own name. Campbell v. New England Mut. Life Ins. Co., 98 Mass. 381, 400; St. 1907, c. 576, § 73.

The rights of the beneficiary are thus protected by the law and by the statute. The rights of the beneficiary attach at once upon becoming as designated by the terms of the contract. Pingrey v. Nat. Life Ins. Co., 144 Mass. 374, 11 N. E. 562. Where the beneficiary is the wife of the insured, her rights instantly vest upon a meritorious consideration. Bailey v. Wood, 202 Mass. 562, 89 N. E. 149. It has been said that, apart from any statute provision, the designation of a beneficiary in a policy of life insurance is in the nature of an executory trust for his benefit of which he cannot be deprived without his consent. Boyden v. Mass. Life Ins. Co., 153 Mass. 544 and 546,27 N. E. 669. Said Chief Justice Fuller in Central Bank v. Hume, 128 U. S. 195, at 206, 9 Sup. Ct. 41, 44 (32 L. Ed. 370):

‘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 person or persons named in it as the beneficiary or beneficiaries. * * * Gould v. Emerson, 99 Mass. 154 ;Knickerbocker Life Ins. Co. v. Weitz, 99 Mass. 157.’

The rights of the beneficiary are vested when the designation is made in accordance with the terms of the contract of insurance. They take complete effect as of that time. They do not wait for their efficacy upon the happening of a future event. They are in no wise modified or increased at the time of the death of the insured.

The contract of life insurance differs from most other contracts in that it is not intended ordinarily for the benefit of the insured, but of some dependent. Its original and fundamental conception is a provision by small, periodical contributions to secure a benefit for the family. While this conception has been enlarged in some respects, and especially in its commercial...