McDonald v. McDonald , 215 Ala. 179 ( 1926 )

On the former appeal (212 Ala. 137, 102 So. 38, 36 A.L.R. 761), the sufficiency of the claims filed by these appellees, and the propriety of their interpleading in this proceeding, were fully considered and sustained.

Counsel for appellant present a forceful argument for a review and recantation of some of the grounds of decision on that appeal — especially as to the sufficiency of the facts relied on to effect an equitable substitution of the appellees for the appellant, as the rightful beneficiaries under the policy. But our examination of the opinion of Mr. Justice Sayre, which clearly enunciates the principles involved, and carefully applies them to the equities of this case, fully justifies the conclusions announced by the court, which must therefore be accepted as the law of the case.

We are now to consider the merit of the counter equities set up by appellant in avoidance of the equity prima facie shown by the appellees.

"It is generally held that, where a right to change the beneficiary has been reserved to insured in the policy or is authorized by a statute which is part of the contract, the beneficiary named in the policy has a mere expectancy and no vested right or interest during the lifetime of insured, unless he has acquired a vested interest by virtue of a contract with insured, such as an agreement of insured, for a valuable consideration, not to change the beneficiary, or unless there are facts establishing an equitable interest in the proceeds." 37 Corp. Jur. 579, 580, § 345.

And, again:

"Where the policy reserves to insured the right to change the beneficiary, a change of beneficiary may be made at his instance, without the knowledge or consent of the original beneficiary, or notice to him, unless insured has divested himself of the right, as by assigning all his rights under the policy, agreeing to keep the policy in force for the beneficiary, or making a completed gift of the policy to the beneficiary by delivery to him, or unless a change of beneficiary has been enjoined and the injunction has not been dissolved." Id. 583, § 349.

Policies of insurance are choses in action and may be assigned, equitably at least, by a mere delivery of the policy with intention to pass the title. Chapman v. McIlwrath,77 Mo. 38, 46 Am. Rep. 1; Mosaic Templars v. Hearon, 153 Ark. 568,241 S.W. 35, 27 A.L.R. 1147; Potvin v. Prudential Ins. Co.,225 Mass. 247, 114 N.E. 292; Marcus v. St. Louis, etc., Co.,68 N.Y. 625; Pickslay v. Starr, 149 N.Y. 432, 41 N.E. 163, 32 L.R.A. 703, 52 Am. St. Rep. 740; 37 Corp. Jur. 425, § 129. This is in accord with the general principles applicable to all written contracts for the payment of money, as often declared by this court. Lee v. Wimberley, 102 Ala. 539, 15 So. 444, 448; Strickland v. Lesesne, 160 Ala. 213, 49 So. 233; Wells v. Cody,112 Ala. 278, 20 So. 381. Of course, neither delivery nor possession is alone sufficient to evidence an assignment. Cyrenius v. N.Y. Mut. L. Ins. Co., 73 Hun, 365, 26 N.Y. S. 248, affirmed in 145 N.Y. 576, 40 N.E. 225; Cuyler v. Wallace,183 N.Y. 291, 76 N.E. 1, 5 Ann. Cas. 407; Royal Union, etc., Ins. Co. v. Lloyd, 254 F. 407, 165 C.C.A. 627.

The authorities all hold that —

"A policy of life insurance may, like other choses in action, be assigned by way of gift, and requires no consideration, but depends upon the voluntary act of insured only." 37 Corp. Jur. 429, § 137; Opitz v. Karel, 118 Wis. 527, 95 N.W. 948, 62 L.R.A. 982, 99 Am. St. Rep. 1004, citing numerous cases; Harrison's Adm'r v. N.W. Mut. Life Ins. Co., 78 Vt. 473, 63 A. 321, 112 Am. St. Rep. 932.

The only requirement is that it be unconditionally delivered to the donee with intent on the part of the owner to divest himself of its ownership [Walker v. Crews, 73 Ala. 412; Wheeler v. Armstrong, 164 Ala. 442, 51 So. 268], and a gift thus perfected is irrevocable (Sewall v. Gidden, 1 Ala. 52). Nor is it any objection to the validity and completeness of such a gift that nothing was yet due to be paid upon the policy at the time of its assignment. "It is the evidence of an amount to be paid at a time fixed by the contract, though it may lapse by failure to comply with its terms. This contingency, however, cannot destroy its character as a transferable chose in action while it subsists as a valid obligation." Opitz v. Karel, supra.

So far as the form of the pleading is concerned, we think the fact of assignment is properly alleged in general terms, and the statement of a consideration is unnecessary. 5 Corp. Jur. 1009, § 225; Ragland v. Wood, 71 Ala. 145, 46 Am. Rep. 305.

Our conclusion is that answers numbered 5, 7, and 8, sufficiently show an assignment of the policy by the insured to appellant, and that such an assignment is sufficient to defeat the equity asserted by appellees, because it shows a vested interest in appellant which could not be defeated by the act of the insured in designating another beneficiary. McDonald v. McDonald, 212 Ala. 137, 102 So. 38, 36 A.L.R. 761. As to these answers, the demurrers were erroneously sustained.

We think, however, that answers numbered 6 and 9 are not sufficient. The facts alleged may be sufficient to support an inference of fact that insured assigned the policy to appellant by way of gift, but they do not show it as a matter of law, and they are not colored by any general allegation of assignment or gift.

Marriage is a valuable consideration, and will support a contract made in consideration of it. Andrews v. Jones, 10 Ala. 400,421; Nelson v. Brown, 164 Ala. 397, 406, 407, 51 So. 360, 137 Am. St. Rep. 61; 13 Corp. Jur. 322, § 159.

In 14 R. C. L. 1389, § 554 (Insurance) it is stated:

"Although the contrary has been held, the better view is that where the designation of the beneficiary in such a certificate is made in pursuance of an agreement founded upon a sufficient consideration, the person so designated acquires a vested interest, and unless by reason of countervailing equities cannot be displaced, although the rules of the order permit the member to change the beneficiary at will. Stronge v. Supreme Lodge, etc., 189 N.Y. 346, 82 N.E. 433, 12 L.R.A. (N.S.) 1209, and note, 121 Am. St. Rep. 902, 12 Ann. Cas. 944; Savage v. Modern Woodmen, etc., 84 Kan. 63, 113 P. 802, 33 L.R.A. (N.S.) 773, and note. This is true, for example, where in pursuance of an antenuptial contract a husband procures his wife to be named as beneficiary. Supreme Lodge, etc., v. Ferrell, 83 Kan. 491 [112 P. 155] 33 L.R.A. [N. S.] 777."

Except that the contractually designated beneficiary was there the insured's sister-in-law, instead of being as here his wife, the New York case of Stronge v. Supreme Lodge etc., supra, is substantially identical as to its equities and counter equities with the instant case. There the undertaking of the beneficiary, in consideration of her designation as such, was to take in and take care of the insured in her home, so long as he desired. The conclusion was that —

"Not only was the refusal of appellant to surrender the old certificate not wrongful, so as to excuse the nonperformance by Irvine [the insured] of certain acts otherwise essential to the issue of a new certificate, but Irvine was not entitled to have a new certificate issued as against appellant even if he had complied with respondent's [insurer's] regulations."

The case of Freitas v. Freitas, 31 Cal.App. 16, 159 P. 611, specifically holds that a woman's marriage to the insured, in consideration of being named as beneficiary in the policy, gave to her an equitable right to the proceeds of the policy which the insured could not defeat by any acts of his, and which a volunteer beneficiary, afterwards substituted, could not deny.

Unquestionably, both on principle and authority, appellant's answers numbered 2, 3, 4, 10, 11, and 12, show an equitable right in her sufficient to defeat the claim of appellees, and the demurrers thereto should have been overruled.

It is true the statute of frauds (Code 1923, § 8034, subd. 4) requires agreements made in consideration of marriage to be evidenced by a writing in accordance with its provisions. But the benefit of the statute must be asserted in law practice by a plea, and cannot be raised by demurrer. Evans v. So. Ry. Co.,133 Ala. 482, 32 So. 138. And even in equity practice, unless the pleading setting up the contract shows on its face that it was not in writing, the same rule prevails. Strouse v. Elting,110 Ala. 132, 20 So. 123. The answers not showing the marriage contract was not in writing, the objection was not available on demurrer.

But in any case, the answers show that the marriage contract was fully executed on both sides, and the statute of frauds is without influence upon resulting rights. Andrews v. Jones,10 Ala. 400, 421; Sawyer v. Ware, 36 Ala. 675; Gordon v. Tweedy,71 Ala. 202, 213; 27 Corp. Jur. 323, § 406.

For the errors noted, the judgment will be reversed and the cause remanded for another trial.

Reversed and remanded.

ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.