Thompson v. Prudential Insurance , 104 N.Y.S. 257 ( 1907 )

Robson, J.:

Plaintiff alleges that she, as administratrix of the estate of her deceased son, prosecutes this action to recover of defendant the amount for which the life of deceased was insured hy defendant. At the close of the trial the court directed a verdict for plaintiff!

The policy, issued November- 2, 1903, was for the sum of $188.60, and provided for the payment of weekly premiums of ten cents each. At that time the assured, as stated in the policy, represented that he would be sixteen at his next birthday. He had for some years prior to that time lived with Bobert L. Newton, who seems to have taken the lad, under an arrangement with his grandmother, . to bring up until he should become • twenty-one years of age, with the understanding 'that he should be clothed and educated and that he should in return complete the term agreed upon. The insurance was obtained at Newton’s suggestion,, and he in fact paid all the premiums thereon. The assured continued' to live with Newton after the policy was taken out down to about May, 1905, when, as Newton testifies, he-ran away. The reason of -his leaving Newton at that time and before the term agreed upon had been completed was one for which Newton was not in any way responsible. During the time, the assured lived with Newton he was furnished board, clothing and .necessary school books and Newton seems to have carried out in complete, detail his part of the contract; and, though the boy was never formally adopted, nor indentured, up to the time.he left no fault could be found with, his performance of the contract or understanding pursuant to which Newton agreed to take him. Neither the mother of assured nor any other member of his family was at any trouble or expense for his care, maintenance or support during the time he lived with Newton. On September 11, 1905, within four or five months after leaving Newton, he died at the home of his mother, the plaintiff in this action, after an illness, which does not seem to have been serious until a few days before its fatal termination. She has paid doctors’ and nurses’ bills of small amount, and made the contract with the undertaker for her son’s burial; but this latter bill, amounting- to $103, was in fact paid by Newton. No beneficiary was specifically named in the policy and we quote the material part of its provisions .relating to payment of the benefit accruing thereunder.

“The amount of benefit provided in the Schedule'on the first page hereof, and. any additions thereto, shall be paid by the Company at its Home office in the City of Newark,'New-. Jersey, unto the executors, administrators or assigns of the Insured, unless settlement shall be made as provided in article sécond under the head' of ‘Provisions’ below, immediately upon acceptance of satisfactory proof of the death of the Insured during the continuance of this Policy.

“ Provisions.

“ 2nd. Facility of payment. The Company may make any pay- . ment "provided for in this Policy to any'relative by blood or connection by marriage of the Insured, or to any other person appearing to said Company, to be equitably entitled to the same by reason of having incurred expense in any way on behalf of the Insured, for his or her burial or for any other purpose, and the production by the Company of a receipt signed by any or either of said persons or of other sufficient proof of such payment to any or either of them shall be conclusive evidence that such Benefits have been paid to the person of ■ persons entitled thereto, and that all claims under this Policy have been fully satisfied.”

In the case of Wokal v. Belsky (53 App. Div. 167) the court was' called upon to consider a provision in. a policy, of insurance similar to that we have just, quoted, and took occasion to express the. purpose of making such a provision a part- of the agreement thereby expressed, as follows: “Such a clause in a policy is inserted for the protection of the company to enable it in industrial policies' where, as here, the amount payable is small, to discharge its obligation by payment to any one of the classes designated without requiring administration. * * * .The only effect of the clause is to provide the company, with a defense in case it has paid thereunder.” •

Apparently assuming to exercise its reserved fight to determine to which individual within the designated classes of persons referred to in “ Provision 2nd,” above quoted, early in October, 1905, defendant "paid to Bobert L. Newton the amount of benefit called for'by this policy of insurance, and we are warranted in assuming that the company determined he was the person “ equitably entitled to the same by reason of having incurred expense in any way on behalf of the Insured.” At the time this payment was made no. administrator of the estate of deceased had been appointed, and there is no evidence that plaintiff or any other member of his family then or at any time prior thereto had eveii a suspicion of the existence of this ■ insurance, and there, is no evidence that any information had come to defendant that deceased had relatives who might, if opportunity served, claim an interest in the insurance moneys. The good faith of defendant in making the payment to Newton is not questioned, which fact alone is sufficient to distinguish the present case from the case of Shea v. U. S. Industrial Ins. Co. (23 App. Div. 53) upon which plaintiff largely relies. It seems to be, and under the authorities must necessarily be conceded by plaintiff that, if payment has been made by defendant prior to notice of her claim as administratrix to a person chosen from one of.the classes designated in provision 2, above quoted, in the due exercise of the discretionary power of selection reserved to it by that provision, that fact, would be a complete defense to this action. (Wokal v. Belsky, supra ; Thomas v. Prudential Ins. Co., 148 Penn. St. 594; 24 Atl. Rep. 82; Bradley v. Prudential Ins. Co., 187 Mass. 226; 72 N. E. Rep. 989.) She does, however, claim that New-' ton, to whom payment was made, has not been shown to be a person upon whom defendant’s choice might fall, because, as she urges, he was not within the range of selection reserved hy the terms of the policy; and; even if the facts now appearing would seem to entitle him to a position within' the circle of choice, those facts were not known to defendant when payment was made to him, and, therefore, defendant’s determination that he was a person equitably entitled to payment could not have been based upon actual knowledge and must have resulted from some other consideration.

It appears that Newton was not a relative by blood or a connection by marriage of deceased; and whatever right he had to ask of" defendant payment of this insurance to him is dependent upon defendant’s recognition of his claim 'that he was a person equitably entitled to it, because he had incurred expense for the deceased, either for his burial or in some other manner. We do not agree with plaintiff’s claim, which is strenuously urged upon our attention, that the only expenses, other than those for burial, which can he considered by defendant as clothing a person with a claim to be considered as equitably entitled to the insurance moneys are those .connected with the last sickness of the assured, for the language of the -quoted provision refers to expenses, for the burial and also to' expenses for . ■any other purpose. . This language is broad and comprehensive enough to include among the expenses which defendant could prop-' erly consider as having been incurred by Newton for-deceased, not only Ii-is payment of premiums on the policy, but also- a portion at least of the cost of educating and maintaining deceased.' This latter expense had been but meagrely reimbursed to'hini when deceased -at the age of eighteen left him, and not in the full measure contemplated by the -understanding under which Newton took deceased that he was to remain ’ until he was, twenty-one. It should be observed that we are now concerned only with facts which, under ' ’ the circumstances, might appear to disclose the--equitable rights of Newton, which might easily be greater than those which are of a < character strictly legal. '. It is- true he had no legal right to compel the lad’s return after he ran away; but it is also true that having fed, clothed and educated him from early youth till the age at which his s'er-yices. were doubtless expected .-to be, and would have - been, some repayment for previous expense, defendant might well have determined that Newton was equitably entitled to have this . expense for which he had received no adequate return considered as. .an expense incurred for deceased. The evidence also conclusively shows that Newton had obligated himself to pay the funeral expenses prior to receiving the insurapce moneys, and that he'in . fact paid them at, or immediately after, the time these moneys came to his possession; ‘ ' ;

Under; the't.erms of the policy,, plaintiff, as administratrix, .could recover on the policy only in the event defendant had not' aiready ■paid the ■ insurance, to • some • person in pursuance of provision 2 " above quoted. Before receiving any notice of plaintiff’s appoint- . nient or of any claim in her behalf to these- moneys, defendant had ' paid the amount of insurance 'to one who, as it claims, is' equitably ■ entitled thereto by reason of having incurred expense not only for the . . burial of, but also in other ways for, the deceased. We do not think it material to determine whether defendant’s payment to Newton as a person equitably entitled thereto was based upon actual knowledge of all the facts which together would, as defendant now urges, establish his equitable right. Defendant selected ¡Newton as the person to whom payment should be made, and we . hold that defendant’s action was proper regardless of whether all or only one or more of the different grounds upon which an equitable claim in liis behalf could have been predicated, furnished the controlling reason for defendant’s decision that he was equitably entitled to the money,

The judgment and order appealed from should be reversed and a new trial granted, with costs to appellant to abide the event.

All concurred.

Judgment and order reversed and new trial ordered, with costs to the appellant to abide event.