317 Pa. 370 | Pa. | 1934
Opinion by
Where the right to change the beneficiary has been reserved in a life insurance policy, the beneficiary named has but a mere expectancy with no vested right or interest during the lifetime of the insured: Biley v. Wirth, 313 Pa. 362, 367; Irving Bank v. Alexander, 280 Pa. 466, 470; Weil v. Marquis, 256 Pa. 608, 614; 37 C. J. 579, section 345. It has been held that a beneficiary who has but a mere expectancy cannot assign or transfer such ex
Where, however, tbe designation of tbe beneficiary in tbe policy is absolute and unconditional because tbe right to change tbe beneficiary is not expressly reserved to tbe insured, tbe beneficiary has a vested interest in tbe policy and cannot be deprived of its proceeds by anything tbe insured may do without tbe beneficiary’s consent. This right is subject, however, to tbe terms and conditions of the policy: Joyce on Insurance, 2d ed., volume 2, section 730a, 731; Smith v. Metropolitan Life Ins. Co., 222 Pa. 226; Schuberth v. Prudential Ins. Co., 86 Pa. Superior Ct. 80. In Smith v. Metropolitan Life Ins. Co., supra, tbe insured designated bis wife as beneficiary. She died before tbe insured. He then substituted bis daughter. In determining tbe effect of this act, tbe court held that tbe wife as beneficiary was to receive the proceeds of tbe policy as a gift, contingent on her surviving tbe insured; but as she died first, tbe gift was not complete, his intention was incapable of fulfillment, and tbe court could not supply any other intent than that which the
In Anderson’s Est., 85 Pa. 202, the policy was payable to A, her executors, administrators or assigns. A predeceased the insured. In a contest over the fund it was held that A’s estate, through naming “executors, administrators or assigns,” was entitled to the proceeds of the policy. In Entwistle v. Travelers Ins. Co., 202 Pa. 141, the policy was made payable to a wife, but in case of her death before that of the insured, then to her children. The insured and his wife assigned the policy, but we held that this joint act could not cut off the interest of the children named in the beneficiary clause; their interest as well as that of the wife was vested; both interests were subject to divestment and could be defeated, but one could not destroy the other before the death of the insured.
In Brown’s App., 125 Pa. 303, the beneficiaries were the same as in Entwistle v. Travelers Ins. Co., supra. The wife assigned her interest and died before the insured ; we held her assignee was not entitled to recover as against children named as beneficiaries in such an event. These cases indicate the vested character of the interest of the beneficiaries in the policies where the right to revoke is not reserved, and that to make a valid assignment of .the benefits thereunder all the beneficiaries named must act.
While it has been stated that the real owner of the policy is the irrevocable beneficiary, there are limitations and contingencies imposed on that ownership. These are found in the law and in the terms of the policy. There is no legal obligation on the insured to keep the policy alive; that is a voluntary act; and the beneficiary must, under the law, survive the insured. Furthermore, the terms of the policy may limit or destroy the vested character of the interest.
Having in mind the rules governing policies of this character, we consider the terms of the policy itself. Undoubtedly the interest of the deceased’s wife as beneficiary was vested. Under its terms she could assign that interest to any one without the joinder of her husband. The policy so stated, and she could dispose of it by will or it would pass under the intestate laws. The proceeds of the policy were to be paid to her or her assigns. The policy contained no limitation, reservation or exception
Turning to them, we find that the insured could, without the consent of the beneficiary, surrender the policy to the company and receive its cash surrender value; could borrow on the policy from the company, and assign the policy to it as security. He could exercise any one of five options as to the surplus that might be apportioned to the policy when it was fully paid. These things were within the insured’s sole and exclusive province, and the vested character of the beneficiary’s interest was limited by and subject to the exercise by the insured of any of the rights so granted by the contract. No power was given the beneficiary to surrender or cancel this policy without the assent of the insured, nor could she receive from the company any money on account of these provisions while insured was living. Any attempt to do so acted upon by the company would be without effect on the insured’s right. The beneficiary could, under the beneficiary clause, assign her vested interest in the proceeds payable after insured’s death, but this right has no relation to the provisions of the policy giving the insured the right to take out the money he paid on the policy, and cancel it. In this case, the act of the insured while he was insane was of no validity. His surrender was of no effect and had he become possessed of his faculties, he could have required the company to return the policy to him, and have forced them to make good any payments made under such illegal acts; but the insured did not regain his mental faculties. He died while insane, and the beneficiary who had the right to assign (and release) under the terms of the policy, did so with her interest, which, at insured’s death, became a full incontestable right in the assignee. Her release or assignment oper
Judgment affirmed.
This statement is subject to tbe Act of May 17,1919, P. L. 207, and tbe Act of June 28, 1923, P. L. 884. See Irving Bank v. Alexander, 280 Pa. 466.