Living v. Domett

Headnote

Endowment policy of insurance issued to a wife upon the life of herr husband — the assignment thereof by her was notprohibiledby the provisions of chap. 80 of 1840, prior to its amendment by chap. 656 of 1866.

Appeal from a judgment in favor of the plaintiff, entered upon a trial at a Special Term.

This action was brought to determine which of the parties hereto is entitled to a sum of money paid into court on a policy of insurance in an action of interpleader, brought by the Mutual Life Insurance Company of New York against said parties. On the 29th of July, 1861, the Mutual Life Insurance Company issued to the defendant a policy of insurance on the life of her husband, Henry W. Domett, whereby it agreed to pay to the defendant, her executors, administrators or assigns the sum of $10,000 on the 29th of July, 1878, or in case he should die before that time, sixty days after notice and proof of death. This policy was issued on the application of the defendant, made by her, husband as her agent, and the premiums thereon were paid by her husband in her name,’ but out of his own funds. On the 18th of May, 1872, the plaintiff loaned to the defendant the sum of $10,000, and received her promissory note therefor, and an assignment of said policy of insurance executed by her as security for the payment of said note. On the 29th of July, 1873, the plaintiff gave to the defendant, at her request, the said policy of insurance, to be exchanged for a paid-up policy. Such exchange was made, and the paid-up policy was . issued in its place and delivered to the plaintiff. No part pf the

note given by defendant has been paid. The husband of the defendant is still living, and they have had no children. The paid-up policy became due on the 29th of July, 1878, and the money due thereon, being the sum of $6,430, was claimed from the insurance company by both parties, and was afterwards paid into court by the company as above stated.

The court at General Term, after considering certain objections, said: “ The case therefore wholly depends upon a single question of law, and that is whether the original policy issued to the defendant upon the life of her husband for her benefit was an assignable one.

“ There is no doubt, as a general rule, that a policy of life insurance is assignable like any other chose in action. (Si. John v. America,n Mutual Life Ins. Co., 13 N. Y., 31 ; Palmer v. Merrill, 6 Cush., 282 ; Ashléy v. Ashley, 3.Sim., 149; Campbell v. Foster, 35 N. Y., 361 ; Field v. Mayor, 6 id., 179.) But in Eadie v. Slimmon ( 26 N. Y., 9 ) the Court of Appeals held that a policy of insurance taken out by the wife under the provisions of chapter 80 of the Laws of 1840, upon the life of her husband for the benefit of herself and her children, payable after the death of her husband, was not .assignable by the wife on the ground that the act looked to a provision for the states of widowhood and orphanage, which would be ' defeated if the wife were permitted to assign such a policy. The correctness of that decision has been greatly questioned in other States, and to some extent in this, but if erroneous the error has become inveterate by the subsequent cases in which it has been accepted and followed. (Barry v. Equitable Life Ins. Co., 59 N. Y., 587 ; Barry v. Bruñe, 71 id., 261; Wilson v. Lawrence, 76 id., 585.) These were all eases of policies upon the life of the assured, payable after his death, and the policies were all held to havte been taken under the provisions of the act of 1840. . In the case at bar the policy was what is known as an endowment policy which was payable at a fixed period within the probable life of the husband, or contingently, upon his death before the expiration of the fixed period. There were no children, and in the application for the policy the words “or children” were stricken out. The policy therefore looked primarily not to a'state of widowhood or orphanage but to a provision for a wife during the life of her husband, and it was only contingently that it had any relation to the state of