Hubbard v. Stapp

Lacey, P. J.

Various questions are raised in this case by appellant, who cites, in support of his claim that the interest of the wife and son of B. T. O. Hubbard could not be transferred to the bank in the manner claimed, the following cases: The Central Bank of Washington City, etc., v. Hume, U. S. Supreme Court, by Chief Justice Fuller, filed November 1, 1888 (128 U. S.). Also, Glanz v. Gloeckler, 104 Ill. 573; S. C., 10 Ill. App. 484. Other cases may be found bearing on the same point, as Johnson v. Van Epps, 110 Ill. 551; S. C., 14 Ill. App. 201.

The case above cited from the Hnited States Supreme Court, and also of Glanz v. Gloeckler, both hold that where an insurance policy is taken by the assured on his own life, payable at his death to a third party, such party attains a vested interest in the policy.

And in Gould v. Emmerson, 99 Mass. 154, it will be seen that it makes no difference whether the policy is made directly payable to the beneficiary or not.

In Bliss on Life Ins., 2d Ed., p. 517, it is laid down as a rule as follows: “We apprehend the general rule to be that a policy, and the money to become due under it, belongs, the moment it is issued, to the person or persons -named in it as the beneficiaries; and that there is no power in the person procuring the insurance, by any act of his, by deed or will, to transfer to any other person the interest of the person named. An irrevocable trust is created.”

It may be contended that the authority of the above was misleading in making such statement by the examination of cases from such States where the statutes regulated the matter, and that the rule is not applicable to States where there is no statute law on the subject. In view of the decisions in Otis v. Beckwith, 49 Ill. 121, and Glanz v. Gloeckler, 104 Ill. 573, we can not believe that such claim can be set up in this State, either where the policy is made payable directly to the beneficiary or to the assured’s administrator for his use. We can see but little distinction, and believe the author has stated the law correctly. We will notice the question further on.

The policies in question were made payable to himself at the end of fifteen years and twenty years, respectively; in case of his death before those dates, to his executors and administrators, for the use and benefit of his wife, Fannie P. Hubbard, and bis son, Willis S. Hubbard, if they should survive him.

This was equivalent to a policy for the benefit of his wife and son, running fifteen and twenty years, respectively, in case of death within that time, and this limitation or contingency, as we conceive, can make no difference in the right to insure for the benefit of his wife and son. The policy was never changed by the insurance company to an absolute policy payable to Hubbard’s administrators, but Hubbard agreed to transfer the policy absolutely for the benefit of the bank; and in that way the bank took it and got the agreement for the assignment. This could not be done except by the consent of the insurance company, if at all. The original contracts of insurance have never been changed. Johnson v. Van Epps, 14 Ill. App. 201. In Glanz v. Gloeckler, 104 Ill. 573, where the insurance in case of death was payable to the wife, it was held an interest vested in her that could not be changed exefept by her consent.

In Otis v. Beckwith, 49 Ill. 121, where the insured never parted with the possession of the policy of insurance, but on a separate paper assigned it for the benefit of his three sons to a trustee, and the same was aecipted bv such trustee, it was held to be an irrevocable trust in favor of his sons. And it does not matter whether the cestui que trust occupies the position of volunteer or not. Badgley v. Votrain, 68 Ill. 25.

It is insisted that the bill charges and decree finds that the insured, Hubbard, was the owner at the time of this assignment of the policies in question.. It is true he had an interest in the policies contingent on his living fifteen and twenty years, and this, taking all the allegations of the bill together, must be regarded as the real charge in the bill, i. e., a special ownership, and the decree can find no more than charged in the bill. Especially is this so when it is nowhere charged that the insurance policies, set out in full in the bill with all their conditions, were assigned to the bank by consent of the wife and son: Where there is any ambiguity, the allegations of the bill must be taken more strongly against the pleader. The appellee insists that the bill charges and the decree finds that the premiums were paid by Hubbard out of money he embezzled from the bank, and hence, in equity, the bank is entitled to the benefit of the policies. It will be observed, however, in answer to this suggestion, that the bill does not proceed on this theory, or claim that they are entitled to the assignment of the policies on that ground, but upon an express contract with Hubbard to assign the policies in consideration-of a large indebtedness due from Hubbard to the bank. Again, the bill does not charge that all the premiums were paid for out of moneys of the bank, but it says a la/rge portion was so paid, or that Hubbard paid them out of his own funds, and the decree can not be broader than the charge. It is evident that this point was not relied on in the couit below. And even if so, we can not concede that such fact, if a fact, would have the effect of giving appellee the right to the entire policies. The bank, however, if its money paid the premiums, would be entitled equitably to be reimbursed to such an amount and interest out of the proceeds of the policy. And if upon a retrial the evidence should show that such was the fact, it should be allowed such premiums and interest thereon out of the insurance money, together with the premiums, if any, since paid by it, with interest, as that would inure to appellee’s benefit, since Hubbard has died within fifteen years.

We are of the opinion that the decree is erroneous, in that it orders the entire interest of Mrs. Hubbard and her son to be transferred to the bank by the assignment. The decree should only have ordered the interest of Hubbard, according to the terms of the policies, to be so transferred, which was contingent on the duration of his life for fifteen and twenty years. Now that he died within a period of fifteen years, his interest expires. For this error in the decree the decree is reversed and the cause remanded, with leave to amend pleadings and to take new evidence, if thought advisable. If the evidence shows that the money of the bank paid the first premiums on said policies claimed by appellant, then the court should allow such amount, with interest, to the bank, with like amounts since paid for premiums, if any, with interest, and the balance of the insurance money, if paid in to appellant for the use specified in the policy.

If the insurance money has not been paid, the decree should declare a lien on the policies for the amounts, if any, above indicated, and the assignment, or agreement to assign, to convey such interest only.

Decree reversed and cause remanded with directions.