Bradshaw v. . Mutual Life Ins. Co. ( 1912 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] I think that the judgment below was right. The plaintiffs had no interest in the contract sued upon and I am unable to understand how any new contract was created between their testator and the defendant. The policy of insurance, upon which the plaintiffs seek to recover, was a contract with the wife of the testator and though procured by him for her benefit, he was acting as her agent and represented her. It was immaterial that he paid the premiums and retained possession of the policy; those facts did not affect the contract as one with her alone. He acquired neither interest in, nor power of disposition over, the policy. His relation to it was that of the life insured; while hers was that of the legal holder, in whom, solely, was vested the interest. This cannot well be disputed upon the cases, (seeWhitehead v. N.Y. Life Ins. Co., 102 N.Y. 143; Holmes v.Gilman, 138 id. 369; Shipman v. Protected Home Circle, 174 id. 398; Millard v. Brayton, 177 Mass. 533), and the principle was recognized, when this case was, previously, before us. (187 N.Y. 347.) Under the statute, (Laws 1873, ch. 821, sec. 2), the testator's wife was given a power to dispose of the policy by will, upon the exercise of which there was no limitation; there being no issue of the marriage. As she left a will, which comprehended in its residuary clause a disposition of the insurance moneys to others, they, as her legatees, only, are entitled to recover them from the defendant.

I cannot agree in the view that there resulted from the transactions between the plaintiffs' testator and the defendant, after the death of his wife, some new agreement by the latter to insure his life for the benefit of his estate; or that an estoppel arose thereout, which disabled the defendant from denying the plaintiffs' right to recover upon the policy in question. If we might assume, which I gravely doubt, that an agent could commit the defendant to a new and different liability, the letter, which is relied upon, could not alter the existing contract, and it did not effect a new one. If the assured supposed that the policy could be made payable to his estate, his ignorance of the law would not excuse him. Equally, the mistake of an agent of the defendant, in construing the contract and the rights of the assured under it, would not estop the defendant from thereafter taking that position, which the correct legal interpretation required. The parties had the contract before them and were chargeable with the knowledge of its legal effect and operation. Whether the assured, after his wife's death, could change the policy and have it made payable to his estate was a matter, which the law took care of, and what the defendant's agents said, or wrote, about it was a matter of opinion, which could not estop the defendant from asserting differently, upon being advised as to the law. (Sturm v.Boker, 150 U.S. 312; Brick v. Campbell, 122 N.Y. 337.) I cannot see that the assured was misled to his prejudice, in the sense that he was prevented from changing the terms of the existing policy, or from doing anything which he otherwise would have done. He lost nothing by relying on the word of the agent: for he had nothing to lose. There was no change he could have effected in the contract, by agreement, or by action, and there is nothing upon which to base any inference that he desired to procure new insurance; nor is there any reason apparent why he should. The question of the case is not what the assured supposed, or what he was led to believe by the defendant's agent, but what was the agreement which the defendant was obligated to perform. That is to be determined from the allegations of the complaint and they set out the insurance policy and the transactions between the assured and the defendant, upon the former's application to have the terms of the policy changed and to have the amount thereof made payable to him. The policy was a contract with the wife and the transactions alleged and proved were ineffectual to alter it, or to divert the insurance moneys from the wife's residuary legatees.

There was no cause of action alleged in the complaint based on a right to recover back the premiums paid by the plaintiffs' testator and none such was added. The plaintiffs were suing to enforce payment to themselves of the moneys, which were payable by the defendant under the terms of the policy of insurance. But having no interest in the policy, as representatives of the assured, I am unable to perceive how they can, upon the cause of action alleged, be deemed entitled to recover the premiums in question. What took place at the trial neither extended the plaintiffs' right of recovery, nor added such a cause of action. There was nothing before the court but the issue tendered by the plaintiffs as to their right to recover the insurance moneys under this policy and I cannot find that any other question was raised. Having failed to establish their cause of action, as alleged, the plaintiffs were in no position to recover upon any different one. (Southwick v. First Nat. Bank of Memphis,84 N.Y. 420.)

I think that the judgment should be modified, in accordance with the consent of defendant, by crediting on said judgment the premiums paid by plaintiffs' testator and interest thereon to date of judgment and, also, the plaintiffs' costs to the date of service of offer of judgment, such amounts in case of dispute to be fixed by the Supreme Court; and, as so modified, that said judgment should be affirmed, with costs.