Ferdon v. Canfield — 5 N.Y. St. Rep. 583

Majority

p. 583

Harriett S. Ferdon, et al., Executors, Appl’ts, v. Henry T. Canfield, Resp’t.^[1]

(Court of Appeals,

Filed January 18, 1887.)

Headnote

INSURANCE (Life) — Policy payable to third parties — Cannot be assigned BY INSURED.

A policy of life insurance which, is payable to persons other than the person whose life is insured, and who are expressly termed in the policy the “ assured,” and the premiums are payable by them, cannot be assigned by the person whose life is insured. .He has no interest therein, and an assignment by him cannot affect the interests of the persons to whom the amount is payable.

Appeal from a judgment of the supreme court, general term, first department, reversing a judgment of the New York county special term, in favor of the plaintiff, in an action to recover on a policy of life insurance.

Samuel W. Canfield obtained from the Equitable Life Insurance Company a policy of life insurance' on the Tontine plan, which was made payable to his wife and six children, who paid the premiums. He assigned it to John W. Ferdon as collateral for $3,000, borrowed by him. At the expiration of the tontine

p. 584

period an action was brought by Ferdon against the insurance company for the money remaining in their hands. An action was also brought by Henry T. Canfield, as assignee of the children against the company for the same money. These two claimants upon the insurance society, admitting the fact of its haying the money, etc., were ordered to interplead to determine which was entitled thereto. After they had so interpleaded, John W. Ferdon died, and his executors were substituted as plaintiffs in his place.

The action was tried , at special term resulting in a judgment in favor of plaintiff, which was reversed, however, by the general term on appeal. Whereupon the plaintiffs gave the required stipulation, and appealed to the Court of Appeals.

A. & A. X. Fallon, for appl’ts; Oscar Frisby, for resp’ts.

Although the life of Samuel W. Canfield was the life insured by the policy, he was not the party assured thereby. His life was the subject of the insurance; but the contract does not, on its face, purport to have been made eithér. with him or for his benefit, nor does he appear to have had any interest therein which he could assign. The policy recites that, in consideration of the representations made in the application therefor, and of the sum of $1,009.25, payable in advance by Catherine E. Canfield and six others, children of the said Samuel W. Canfield, who are expressly declared to be the assured, and of the semi-annual payment of a lite premium, the society assures the life of the said Samuel W. Canfield in the amount of $25,000, and promises to pay the amount of said assurance to the said seven named children, in equal shares, in 60 days after due notice and satisfactory proof of the death of said person whose life is insured. Under this contract it is impossible to see how any assignment by the person whose life is insured can affect the rights of the parties to-whom the amount of insurance is, by the terms of the policy, made payable, and who are therein declared to be the parties by whom the premiums are payable, and to be the parties assured.

The plaintiffs claim under an assignment of this policy, made by Samuel W. Canfield to their testator, as collateral security for money loaned by him to Canfield; and the defendant claims under an assignment of the same policy from the children, who are therein described as the assured. No facts appear, either in the findings or the evidence, disclosing any equities on the part of the plaintiffs outside of the title claimed by them under the assignment by Samuel W. Canfield to their testator, and we are unable to perceive any foundation for their claim. The contract of the Equitable Assurance Society was not with Samuel W. Canfield, but, by its express terms, was with the assured, viz., his children.

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The claim is made, in the points of the counsel for the appellant, that by the terms and conditions of the policy, (which was on the Tontine plan,) in case Samuel W. Canfield should be living at the time of the maturity of the policy, the amount due was payable to him personally. We are unable to find anything’ to that effect. The provision as to payment before death was that, upon the completion of the Tontine x>eriod, the legalholder or holders of the policy should be entitled, at their option, to withdraw in cash the policy’s share of the fund. The only provision under which it could be claimed that Samuel W. Canfield might in any event be entitled to draw anything is a subordinate one, to the effect that the legal holder or holders of the policy, on the completion of the tontine period, might, at their election, instead of withdrawing their share of the tontine fund, continue the assurance for the original amount, and apply their entire tontine dividend to the purchase of an annuity to reduce the future premiums, and that, if in any year the amount derived from such annuity, together with the annual dividend on the policy, should exceed the amount of premium due, the excess should be paid in cash to the said Samuel W. Canfield or assigns. It can easily be surmised how the name of Samuel W. Canfield, instead of the assured, happened to be inserted in this clause, but it is quite uninrportant to consider that matter, inasmuch as the contingency provided for never occurred.

The counsel for the appellant also claim that the alleged assignments from the assured to the defendant in this action were incomplete, and, in some respects, invalid. But these objections, if well founded, do not help the case of the plaintiffs. If the defendant has not a valid assignment of the interests of the assured, the fund belongs to them; but this does not improve the plaintiffs’ title.

The order of the general term should be affirmed, and judgment absolute rendered against the plaintiffs on their stipulation, with costs.

All concur.