Anderson v. Northern Dakota Trust Co. , 69 N.D. 571 ( 1939 )

Upon a reargument of this case, granted upon appellant's petition, exception was taken to our conclusion that the Pioneer Life Insurance Policy in the sum of $10,000 was made payable in a manner that brought it within the terms of, and made it subject to the provisions of § 8719, Compiled Laws of 1913. Appellants urged that § 8719, supra, applies only to policies of insurance which were "made payable to the deceased, the personal representatives of the deceased, his heirs or estate" at the time the policies were originally issued.

Appellants contend that § 8719 must be construed in harmony with § 6636, Compiled Laws of North Dakota 1913, that since § 6636 requires that every policy of life insurance issued in this state shall contain the entire contract, the terms of a policy of insurance may not be altered or modified after it is issued; that therefore the designation of a new beneficiary by an indorsement upon a policy by an insurer, at the request of an insured who has reserved the right of revocation does not become a part of the insurance contract, and the avails of a policy after such an indorsement are not payable "by its terms" but according to the auxiliary agreement; that a policy made payable to the insured's personal representatives by the terms of an indorsement of a change of beneficiary is not one made payable by the terms of the policy and therefore the distribution of the avails of such a policy is not controlled by § 8719, supra.

The argument is not sound. It rests upon a misconstruction of the effect of § 6636, supra. This section requires that every policy of insurance issued in the state shall contain the entire contract between the parties. Such a statutory requirement or such a provision in the contract itself does not limit the right of the parties to alter or modify the policy by a mutual agreement. Bogue v. New York L. Ins. Co. 103 Neb. 568, 173 N.W. 591; Perrigo v. Connecticut Commercial Travelers Mut. Acci. Asso.101 Conn. 648, 127 A. 10; Cooley, Briefs on Insurance, 1484.

Life insurance policies usually provide the method by which a change of beneficiary may be made. The policy here in question contains such a provision. The language of that provision is identical with that contained in the North Dakota Standard Life Insurance Policy, N.D. Comp. Laws 1913, § 6635. Thus while the policy must contain the entire contract there is included as a part of this contract a method by which a change may be made in the designation of beneficiary.

The prescribed method was followed, the beneficiary was changed, and the change of beneficiary was indorsed upon the policy. The original designation of beneficiary and the provisions of the policy relating to a change of beneficiary were both a part of the insurance contract. Equitable Life Assur. Soc. v. McElroy (C.C.A. 8th) 83 F. 631, 641; McKinney v. Fidelity Mut. L. Ins. Co. 270 Mo. 305, 193 S.W. 564; Reid v. Durboraw (C.C.A. 4th) 272 F. 99; Cooley, Briefs on Insurance, 6424; 37 C.J. 585. When the change of beneficiary had been accomplished in accordance with the contract, the indorsement of the change became a part of the contract and the new beneficiary became entitled to the insurance proceeds "by the terms" of the policy. Any other construction of the contract would be contrary to the reasoning underlying the many decisions of this court in which § 8719, supra, has been construed. In Anderson v. Northern Dakota Trust Co. 67 N.D. 458, 468, 274 N.W. 127, summarizing the import of these decisions, we said, that the avails of a life insurance policy made payable to the personal representatives of the deceased, his heirs or estate "passed to the heirs at law of the insured by contract and not by descent and that the effect of the statute was to render such insurance policy payable to the person or persons who at the time of the death of the insured were his heirs at law under the laws of succession the same as though their names had been written into the insurance policy as beneficiaries."

No one would have questioned the right of the plaintiffs to receive the avails of this insurance policy had plaintiffs been specifically named as beneficiaries in the indorsement of change of beneficiary. As surviving heirs at law of the insured they are entitled to the proceeds of the policy, which, although originally made payable to a mercantile establishment, was later, through a change of beneficiary, made payable to the personal representatives of the insured. Under § 8719, supra, and the decisions of this court, such a change would have precisely the same effect as if plaintiffs had been designated as beneficiaries by name. We therefore adhere to our original decision.

NUESSLE, Ch. J., and MORRIS, CHRISTIANSON, and BURR, JJ., concur.