Summary
In Faulkner v. Faulkner, 192 Miss. 358, 5 So.2d 421 (1942), a case cited by both sides in this dispute, the Mississippi Supreme Court announced that "the intent of the insured should be given full weight."
Summary of this case from Murdock v. Equitable Life Assur. Soc. of U.S.Opinion
No. 34778.
January 12, 1942.
1. INSURANCE.
Where insurer denied that it had received life policy for change in beneficiary but paid proceeds into registry of court and impleaded the rival claimants, by such course the insurer "waived" requirements of policy regarding method of change of beneficiary.
2. INSURANCE.
The formalities provided in life policy for change in beneficiary are solely for benefit of insurer.
3. INSURANCE.
Where life policy reserved to insured the right to change beneficiary, the original beneficiary had no "vested rights" but only an inchoate imperfect and ambulatory right prior to insured's death.
4. EQUITY. Insurance.
Where insured reserved right to change beneficiary of life policy, the intent of insured to change beneficiary should be given full weight and where such intent is expressed in the manner required by the insurer and the insured has met all requirements prerequisite to change of beneficiary, equity will regard that as done which ought to have been done.
5. INSURANCE.
Where it appeared that insured took two life policies to foreman of employer through which policies had been obtained for change of beneficiary, that policies were forwarded to employer's insurance department which sent blank forms upon which application for change should be made, that forms were properly filled out by insured and mailed to employer, that both policies were returned in an envelope to insured who turned them over to intended new beneficiary, and that it was not discovered until after insured's death that beneficiary had not been changed in one policy but insurer paid proceeds into court and impleaded the old beneficiary and the intended new beneficiary, the intended new beneficiary was entitled to the proceeds.
APPEAL from the chancery court of Leflore county, HON. R.E. JACKSON, Chancellor.
W.H. Montjoy and Alfred M. Stoner, both of Greenwood, for appellant.
We wish to state that we recognize the prevailing rule in this state as announced in the case of Bank of Belzoni v. Hodges et al., 132 Miss. 238, 96 So. 97, to the effect that certain policy provisions prescribing the method to be used in changing the beneficiary are for the protection of the insurance company only, where the company appears and pays into court the proceeds of the policy. This announcement of the law will in all probability be strenuously argued by the counsel for the appellee. Hence, we wish to make clear now, once and for all, that we have no particular quarrel to make with the rule, for we do not think that an application of same is necessary to a decision in this case. We do think, however, that it is the unambiguous rule of this state that any insured must do "all within his power" to effect a change of beneficiary, and that failing therein no change of beneficiary is consummated. For that reason, therefore, we do not think that the rule as announced in the case of Bank of Belzoni v. Hodges et al., supra, was intended or has the effect to obliterate and erase from every policy the provisions as to how the change of beneficiary shall be made. We believe that the policy provisions on the subject at the least constitute a guide as to whether or not the insured has done all within his power to make the desired change. To hold that when the proceeds of the policy are paid into court by the insurance company that thereby the policy provisions respecting a change of beneficiary are completely erased from the policy will have the result of denying all efficacy whatsoever to the policy provisions and would be the same as saying that Mississippi has no rule whatsoever regarding the method of changing a beneficiary.
But this state does have a rule on the subject and we believe that the same can be tersely stated as follows: In order to effect a legal change of beneficiary, the insured must do all within his power or all that he can do to make the change.
Hall v. Allen, 75 Miss. 175, 22 So. 4, 65 Am. St. Rep. 601. See, also, Coyne v. Bowe, 23 App. Div. 261, 48 N.Y.S. 937, affirmed in 161 N.Y. 633, 57 N.E. 1107, 24 A.L. R. 758; 24 A.L.R. 750; 78 A.L.R. 974; 37 C.J. 584, Sec. 350; Reid v. Durboraw, 272 F. 99.
Any person is presumed to know the contents of contract which he receives without objection even though he fails to read same.
We submit that the decedent, Ike Faulkner, did not do all within his power or all that he could do to effect the change of beneficiary, and, in addition, he was presumed under the law to have known that he did not make a change. To hold otherwise is to rely upon conjecture and supposition.
Osborn Lott, of Greenwood, for appellee.
Where the right is reserved by the insured to change the beneficiary, whether the policy be an old-line, fraternal, or mutual benefit, the beneficiary named therein, or any subsequent beneficiary, has no vested right or claim to the proceeds of such policy, but has only a mere expectancy, dependent solely and alone upon being the real and actual beneficiary of the policy at the time of the death of the insured, and as stated by the Supreme Court of Mississippi, such right or claim is "inchoate, imperfect and ambulatory until the death of the insured."
Hall v. Allen, 75 Miss. 175, 22 So. 4; Lyles et al. v. Eubanks, 114 Miss. 587, 75 So. 447; Carson v. Vicksburg Bank, 75 Miss. 167, 22 So. 1, 37 A.L.R. 559, 65 A.S.R. 596; Sykes v. Armstrong, 111 Miss. 44, 71 So. 262; White v. White, 111 Miss. 219, 71 So. 322; Freeman v. Barnett, 146 Miss. 849, 112 So. 161; Bank of Belzoni v. Hodges et al., 132 Miss. 238, 96 So. 97; Stewart v. Stewart (Ind.), 169 N.E. 593; Hirschl v. Clark (Iowa), 47 N.W. 78, 9 A.L.R. 841; 29 Am. Jur. 981, par. 1314; Cooley's Briefs, pp. 1298, 1290, 1340, 6448, 6406, 6426-7, 4726; Supreme Council of the Royal Arcanum v. Behrend, 247 U.S. 394, 62 L.Ed. 1182, 38 Sup. Ct. Rep. 522, 1 A.L.R. 966; Lamar Life Ins. Co. v. Moody, 122 Miss. 99, 84 So. 135; Ouzts v. Carroll, 190 Miss. 217, 199 So. 76.
The stipulation in an insurance policy regulating and providing the mode, manner and procedure as to the change of beneficiary is for the protection of the insurance company only, and may be waived by it, and is waived when the insurance company pays the proceeds of the policy into court, interpleading rival claimants.
No rival claimant has a right to insist that the provisions of the policy with respect to a change of beneficiary were not strictly complied with.
The courts look to and will determine and enforce the intention, purpose and desire of the insured by what the insured did before his death in an honest effort to change the beneficiary.
The insured owns the policy until the time of his death and may dispose of the proceeds thereof at any time.
The court, acting upon and enforcing the axiom that "equity will do that which should have been done," will reform and change the life insurance policy so as to effectuate the change of beneficiary in accordance and compliance with the expressed desire and intention of the insured.
When the insured has done or performed the acts required of him by the provisions of the policy respecting the change of beneficiary, whether strictly, substantially, or in equity substantially, the insurance company must make the change. It is mandatory; and the fact that the insurance company did not receive the request for the change of beneficiary before the death of insured is of no importance.
Hall et al. v. Allen, 75 Miss. 175, 22 So. 4; White v. White, 111 Miss. 219, 71 So. 322; Bank of Belzoni v. Hodges, 132 Miss. 238, 96 So. 97; Stewart v. Stewart (Ind.), 169 N.E. 593; Bronson v. N.W., etc., Ins. Co., 129 N.E. 636; Hirschl v. Clark (Ind.), 47 N.W. 78, 9 A.L.R. 841; Supreme Council of the Royal Arcanum v. Behrend, 247 U.S. 394, 62 L.Ed. 1182, 38 Sup. Ct. Rep. 522, 1 A.L.R. 966; 2 Couch's Cy. on Insurance Law, 915, 931, also especially pp. 813, 912; Atkinson v. Metropolitan Life Ins. Co., 114 Ohio St. 109, 150 N.E. 748; Arnold v. Newcomb, 104 Ohio St. 578, 136 N.E. 206; Sun Life Assurance Co. of Canada v. Williams et al., 284 Ill. App. 222, 1 N.E.2d 247; Wickes v. Metropolitan Life Ins. Co. (La.), 170 So. 48; 7 Cooley's Briefs on Insurance, 6461; Sbisa v. Lazar et al., 78 F.2d 77, C.C.A. 5; Holt v. Russell, 30 F.2d 597, C.C.A. 5; Royal Arcanum v. Riley, 143 Ga. 75, 84 S.E. 428; Inter-Southern Life Ins. Co. v. Cochran, 259 Ky. 677, 83 S.W.2d 11; Adams v. Adams, 78 S.W.2d 664; Phillips v. Phillips (Ala.), 198 So. 132; McDonald v. McDonald, 212 Ala. 137, 102 So. 38; Mutual Life Ins. Co. v. Lowther, 120 P. 883; White v. White, 194 N.Y.S. 114; Arrington v. Grand Lodge, 21 F.2d 914, C.C.A. 5.
Argued orally by W.H. Montjoy, for appellant, and by S.I. Osborn, for appellee.
Ike Faulkner was an employee of the Mississippi Power Light Company through which he had procured by virtue of such employment a policy of life insurance with the Metropolitan Life Insurance Company. Among the provisions of such policy are the following: "The right to change the beneficiary is reserved," also "Should you desire to change the beneficiary under the Certificate, your request for such change must be submitted through your employer." Premiums on such policy were paid by such employer which deducted the amounts therefor from the employee's wages.
In this policy the beneficiary named was Pauline S. Faulkner, whose acquaintance was made by the insured in 1931, since which date and until 1936 they lived together as husband and wife. In 1936 there was a separation and the insured thereafter lived with Emma J. Faulkner until his death in 1940. Mutually disparaging recriminations are indulged by respective counsel each involving without ambiguity allegations of a callous want of conformity unto those social niceties ordinarily deemed prerequisite to formal marriage. The respective and rival consorts in seeking to tar the other with the same accusatory stick have blackened their own hands beyond the power of equity to espouse the cause of either. By going directly to the controlling issue, we avoid encounter with these recriminations, abandoned to serve their complete function in creating a ready outlet for relief from the accumulated pressure of impounded outrage.
The issue here is whether an attempt by Ike Faulkner to have the beneficiary in the policy changed to Emma was effective when adjudged by equitable principles. About two years before his death the insured took two life policies, one of which is here involved, to Mr. Roland, a foreman for the light company and the insured's "boss," with the request that the beneficiary in both policies be changed in favor of appellee. According to Mr. Roland, these policies were forwarded to the insurance department of the light company with this request. Thereafter the light company sent blank forms upon which application for such change should be made. These forms were properly filled out by insured and mailed back to the light company. In due course both policies were returned in an envelope by Mr. Roland to insured who turned them over to appellee, Emma Faulkner. The latter placed them at once in a metal box under her bed where they remained until after insured's death in 1940. Thereupon it was discovered that the policy in suit was not changed although the other had been made to conform to the request.
Suit was filed by Emma Faulkner against Pauline Sims Faulkner and the insurance company. The insurance company denied that it had received the actual policy for change in beneficiary but paid the proceeds into the registry of the court and impleaded the rival claimants. By such course the insurance company waived the requirements of the policy as to the method of change of beneficiary, which formalities are solely for benefit of the insurer. Hall v. Allen, 75 Miss. 175, 22 So. 4, 65 Am. St. Rep. 601; 2 Couch, Cyc. of Insurance Law, Sec. 328. Under the policy, the original beneficiary had no vested rights but only an inchoate imperfect and ambulatory right prior to insured's death. Carson v. Vicksburg Bank, 75 Miss. 167, 22 So. 1, 37 L.R.A. 559, 65 Am. St. Rep. 596; Lyles v. Eubanks, 114 Miss. 587, 75 So. 447; Sykes v. Armstrong, 111 Miss. 44, 71 So. 262; White v. White, 111 Miss. 219, 71 So. 322; Bank of Belzoni v. Hodges, 132 Miss. 238, 96 So. 97; Freeman v. Barnett, 146 Miss. 849, 112 So. 161, 52 A.L.R. 375.
In such case, the intent of the insured should be given full weight and where such intent is expressed in the manner required by the insurer and the insured has met all requirements prerequisite to a change in beneficiary, equity will regard that as done which ought to have been done. Wickes v. Metropolitan Life Ins. Co., La. App., 170 So. 48; Hall v. Allen, supra; White v. White, supra; Bank of Belzoni v. Hodges, supra; Atkinson v. Metropolitan Life Ins. Co., 114 Ohio St. 109, 150 N.E. 748; Sun Life Assur. Co. v. Williams, 284 Ill. App. 222, 1 N.E.2d 247; Inter-Southern Life Ins. Co. v. Cochran, 259 Ky. 677, 83 S.W.2d 11; 7 Cooley's Briefs on Insurance (2 Ed.), p. 6448, Id. Supp., Vol. 7, p. 6461; Couch, op. cit., supra, Vol. 2, pp. 912, 915. Here there was ample testimony upon which the trial court could find that the intent of insured was that Emma Faulkner should be made the beneficiary. There were no other steps which insured could have taken so that he is held to have done all that he reasonably could to effect such change. It is not relevant that the policy was not examined after its return and delivery to Emma Faulkner. Such omission is consistent with a reasonable presumption of compliance. His duty was to satisfy the company and not his curiosity. A failure to verify the results may not be held retroactively to constitute a failure to comply with the requirements. The learned chancellor held that the insured intended to effect a change of beneficiary in favor of appellee and that the policy ought to be so reformed as to comply therewith.
Affirmed.