Ward v. New York Life Ins. Co.

• Decision Date: 14 January 1919
• Parties: WARD v. NEW YORK LIFE INS. CO. et al.
• Court: New York Court of Appeals Court of Appeals

225 N.Y. 314

122 N.E. 207

WARD

v.NEW YORK LIFE INS. CO. et al.

Court of Appeals of New York.

Jan. 14, 1919.

Appeal from Supreme Court, Appellate Division, Third Department.

Action by Annie Page Ward against the New York Life Insurance Company, Walter K. Ward, and Raymond Ward. From a unanimous judgment of the Appellate Division (175 App. Div. 961,161 N. Y. Supp. 1149), affirming a judgment of the Special Term dismissing the complaint on findings and on the merits, the plaintiff appeals. Affirmed.

E. R. Shepard, of Saratoga Springs, for appellant.

Andrew J. Nellis, of Albany, for respondents.

HISCOCK, C. J.

The New York Life Insurance Company issued a policy on the life of one Ward in the sum of $5,000, payable on death of the insured to his executors, administrators, or assigns. The policy also contained a provision that the insured might at any time change the beneficiary under said policy by written notice and indorsement of the change on the policy by the company. When Ward died, opposing claimants to the proceeds of the policy appeared. On one side were his sons who a short time before his death had been duly designated and by the company recognized as beneficiaries under the policy. On the other side appeared the wife who claimed the proceeds of the policy under an equitable parol assignment for value antedating the designation of the beneficiaries. The company paid the proceeds into court to be contested for by the opposing claimants, and judgment has thus far proceeded in favor of the beneficiaries as against the alleged assignee.

While there is no claim that the designation of the defendant beneficiaries was for a valuable consideration, there is, on the other hand, no question that their designation was made in proper form. The claim of the appellant to an assignment of the policy rests entirely on parol testimony. Two witnesses gave evidence to the effect that the insured had in substance stated that he had made an assignment of his insurance to his wife. The main testimony, however, to sustain the alleged assignment, was given by the wife herself, who first testified that on one occasion some time before her husband's death, when he desired to borrow some money from her, he stated in substance that he would give her a note for what he already owed and would execute as security for new loans assignments of life insurance policies, which it may be inferred included the present one, and that thereupon she loaned him some money. In subsequent testimony, however, she varied her account of this interview and testified to statements then made by her husband which were in conformity with those said to have been made by him at various subsequent times and which were to the effect that he had assigned his life insurance policies to her, that she did not need be afraid to loan him money because she would be repaid or was secured by assignments of his insurance, etc. These statements, which are the ones relied upon on this appeal, were therefore to the effect that the insured had assigned to the appellant his life insurance or his life insurance policies, and she says that on the strength of these statements she from time to time loaned him various sums of money reaching in the aggregate a considerable amount. There is no other intelligible evidence tending to support the theory of an assignment. There is some evidence drawn out by counsel for respondents, on his cross-examination, about a paper or notice said to be from the insurance company and on which there was written:

‘This is payable to my wife, Annie P. Ward or Annie Page Ward, I could not tell you which.’

But this evidence is so indefinite that it is not cited in any way by appellant's counsel on this argument and we think does not contribute any support to appellant's claim. The policy was never delivered to appellant, it being given as an excuse by the insured that it was pledged with the company; no paper was ever executed and no notice ever given by the alleged assignee to the insurance company or received by her from the latter; and no step was ever taken which was effective to actually accomplish an assignment. Outside of the alleged statement by the insured that the policy was deposited with the insurance company, there is no evidence of that fact, and the insured never surrendered control over the policy, but continued to exercise such control for several years between the date of the first alleged conversation and his death, if in no other way, by making new designations of beneficiaries. Other policies which appellant says were assigned to her by her husband were in his safe deposit box, and these were not delivered to her.

[1] The first question which arises pertains to the admission of evidence. As appears, the appellant, in spite of timely objections, was permitted to testify concerning personal transactions between her and her husband for the purpose of establishing the alleged assignment. Subsequently all of this evidence was stricken out as incompetent under section 829, and it becomes necessary to decide which ruling of the trial judge was correct-that admitting the evidence, or that striking it out.

We think the evidence was competent as against the respondents as beneficiaries under the policy. It was thus competent unless it can be said that they derived their ‘title or interest from, through or under a deceased person * * * by assignment or otherwise,’ and we do not think that a person claiming money directly from an insurance company by virtue of a designation under a policy can be said to be claiming ‘from, through or under’ the insured in said policy even though the latter has made the designation. Of course, it must be admitted that in a substantial sense it is due to the act of the insured that the beneficiary becomes entitled to the proceeds of the policy. Without such act the latter would have no claim. What was said by Judge Cullen in Matter of Dows, 167 N. Y. 227, 231,60 N. E. 439, 441 (52 L. R. A. 433, 88 Am. St. Rep. 508), when speaking of title under a power of appointment, is quite as applicable in the case of a designation of a beneficiary under an insurance policy. He said:

‘But whatever be the technical source of title of a grantee under a power of appointment, it cannot be denied that in reality and substance it is the execution of the power that gives to the grantee the property passing under it.’

Nevertheless with very limited exceptions it has been held that the title of a grantee under a power of appointment comes from the donor of the power rather than from the one who exercises it (Chanler v. Kelsey, 205 U. S. 466, 474, 27 Sup. Ct. 550, 51 L. Ed. 882), and principles similar to those applied in the case of powers, we think, lead to the conclusion that beneficiaries like the respondents secure their money from the insurance company and not from the insured who designated them. The great body of authority makes it plain, by inference at least, that when section 829 speaks of deriving title or interest from, through, or under a deceased person, it contemplates property or an interest which belonged to the deceased in his lifetime and the title to which has passed by assignment or otherwise through him to the party who is protected by the section. These authorities do not contemplate a case where a party claims property from a third person which never belonged to the deceased and which in fact did not come into existence until his death.

No cases have been found in this state directly passing upon this question. The case of Sabin v. Grand Lodge A. O. U. W., 6 N. Y. St. Rep. 151, which has been cited as so doing, does not in fact do it. It was simply held in that case that on a consideration of the comparative rights of the contending parties evidence of personal...