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

The plaintiffs, Elizabeth Anderson and Laura Anderson, are respectively the widow and the adopted daughter of Axel Robert Anderson, deceased, and as such are his sole heirs at law. The defendants are severally the executors of, and the residuary legatees and devisees under the last will and testament of said Axel Robert Anderson. The suit is for the avails of two insurance policies upon the life of Axel Robert Anderson in the aggregate sum of $15,431, which his executors have collected and which they now hold pending a determination of the issues here presented. The plaintiffs prevailed in the district court and the defendant residuary legatees and devisees have appealed. Plaintiffs alleged in their complaint that the two insurance policies here in suit "were made payable to the estate of said deceased," Axel Robert Anderson. They urge that under the provisions of § 8719, Compiled Laws of North Dakota 1913, as amended by chapter 225, Laws of North Dakota 1927, and chapter 149, Laws of North Dakota 1929, the proceeds of the policies not having been specifically disposed of by decedent's will, upon his death, passed directly to the plaintiffs as his heirs at law in accordance with the laws of succession. Upon two former appeals of this action (65 N.D. 721,261 N.W. 759, 67 N.D. 458, 274 N.W. 127) the law of the case has been substantially settled. The only question remaining for decision is that raised by the appellants' amended answer, namely, are these policies of insurance made payable in a manner that brings them within the terms of the statutes relied on?

Section 8719, Compiled Laws of North Dakota 1913, is applicable to insurance policies "made payable to the personal representatives of a deceased, his heirs or estate." Chapter 225, Laws of North Dakota 1927, is applicable to the same policies; chapter 149, Laws of North Dakota 1929, is applicable to policies "made payable to the deceased, the personal representatives of the deceased, his heirs or estate." In the case of Cohen v. Gordon Ferguson, 56 N.D. 545, 218 N.W. 209, this court said, "In our opinion the question whether the distribution of the avails of an insurance policy is controlled by § 8719 is determinable by the terms of the policy itself, namely, by the terms used to designate the beneficiaries therein. It goes without saying that the courts have no right to rewrite this statute and to either add to or detract from its terms."

The first policy is one issued by the Mutual Life Insurance Company of New York on April 27, 1894, in the sum of $5,000. It is payable to Emily E. Anderson, her executors, administrators or assigns. There is no reservation of a right to change the beneficiary. Emily E. Anderson was the first wife of the deceased, Axel Robert Anderson. She died approximately six years after the policy was issued. No right to change the beneficiary having been reserved, Emily E. Anderson had a vested interest in the policy and upon her death it became one of the assets of her estate. 37 C.J. 577; 14 R.C.L. 1376. On January 3, 1900, this policy was assigned to A. Robert Anderson by an instrument in writing executed by John Halversen, "As Special Administrator of Emily E. Anderson, Deceased." This assignment was filed with the insurer, the Mutual Life Insurance Company of New York. No change was ever made in the designation of the beneficiary in the policy. The policy became payable to the deceased, A. Robert Anderson, not by the terms of the policy itself, but by virtue of an assignment from the administrator of the estate of the designated beneficiary. An assignment of a policy of life insurance is a contract separate and distinct from the contract of insurance. Joyce, Insurance, 1918, § 2326b. In Cohen v. Gordon Ferguson, 56 N.D. 545, 218 N.W. 209, supra, we also said, "Section 8719 on the other hand does not purport to apply to all insurance contracts. It purports to apply only to contracts where the insured, by the use of the appropriate terms in designation of beneficiaries has indicated an intention that the policy shall be controlled by § 8719." The deceased did nothing whatever after receiving this policy to indicate an intention that the policy should be payable in any particular manner or to any particular persons. By assignment it was one of his assets and upon his death it became one of the assets of his estate. The policy is clearly not subject to the provisions of § 8719 and its avails therefore, not having been otherwise disposed of, are now a part of the residue of his estate for distribution to the residuary legatees.

The second policy was issued by the Pioneer Life Insurance Company on October 11, 1912, in the sum of $10,000. It was made payable to the Right Price Mercantile Company, a corporation, with the right of revocation reserved. The policy contains the following provisions: "When the right of revocation has been reserved, . . . the Insured, subject to any existing assignment of the policy, may designate a new beneficiary with or without reserving right of revocation by filing written notice thereof at the home office of the company, accompanied by the policy for a suitable indorsement thereon." The policy contains the following indorsement: "At the written request of the Insured hereunder and subject to any existing assignment of the policy, the amount due under the policy at the death of the Insured is hereby made payable to ___________________, if living, otherwise to the executors, administrators or assigns of the Insured. The right to change the beneficiary is reserved to the Insured."

This indorsement is a substitution for the original designation of beneficiary and is just as much an integral part of the contract as was the original designation. The policy is therefore, by its terms, made payable to the executors, administrators or assigns of the insured. It is clearly within the terms of, and subject to the provisions of § 8719, supra, and the acts amendatory thereof. The avails of this policy therefore upon the death of the insured, passed to his heirs at law, Elizabeth and Laura Anderson, in accordance with the laws of succession. Anderson v. Northern Dakota Trust Co. 65 N.D. 721,261 N.W. 759, 67 N.D. 458, 274 N.W. 127.

The judgment of the district court will be modified in accordance with this opinion and, when so modified, affirmed.

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