49 N.Y.S. 29 | N.Y. App. Div. | 1898
A majority of the court are of opinion that this action is maintainable for the reasons stated by Mr. Justice Putnam upon the former appeal (86 Hun, 534). That conclusion having been reached,
If this action is maintainable, then I advise that the $740 be awarded to the defendant Ann Healey. The policy, at the option of the holder, was convertible under the terms of the 8th clause into an endowment policy for his benefit. Alonzo IT. Doty in May, T874, took out the policy and paid the premiums for the ten years thereafter as required by its terms. He thus became the holder and owner of the policy. (Garner v. Germania Life Ins. Co., 17 Abb. [N. C.] 7.) In common phrase he who takes out the policy and pays the premiums is the policyholder. (People v. Security Life Ins. Co., 78 N. Y. 114; People v. Empire Mutual Life,
Alonzo PI. Doty thus had the right to become sole beneficiary of the policy; it was a property right and lie could dispose of it without consulting either his wife or his children, since whatever interests they had were subject to the contingency that lie by exercising the option could make liis .own right superior - and absolute, and
Here the claim of Ann Healey does not rest upon the wife’s assignment, but upon the husband’s assignment to her of his endowment interest therein, "which cuts off every other interest. The policy is either an endowment policy or a life policy, at the option of the holder. If the policy had said that at the expiration of fifteen years $740 should be paid to Alonzo H. Doty or to the holder in full for the insurance, the interest of the wife and children would then have ceased. (Miller v. Campbell, 140 N. Y. 457.) It can make no difference that, instead of fixing the exact period when the endowment shall .mature, the policy gives the holder the option to fix it at any time after fifteen years. That is certain which can be made so, and, as in this case, has been made so. What was said in Brummer v. Cohn (86 N. Y. 11), about the non-assignability by the wife of an endowment policy, had reference to a policy payable to herself in the event of her surviving her.husband, or surviving the term, of the insurance, and none whatever to a husband’s assignment of his own separate and superior interest in an endowment policy, the endowment being payable to him if he survived the term of the insurance. By the transfer to Ann Healey she became the owner and holder of the policy. (Marcus v. St. Louis Mutual Life Ins. Co., 68 N. Y. 625 ; St. John v. Am. Mut. Life Ins. Co., 13 id. 31.)
Every person holding collateral security has the right to use it in whatever lawful way he can make it most effectual as security, and the only lawful way open to Ann Healey to make it most effectual was to exercise the option to convert the policy into cash. That right of convertibility was the only feature which gave the policy any value to her, and of course it passed to her with the transfer by the husband of the policy, expressed and inhering in it.
Whether the delivery of the policy to Ann Healey was an assignment or a pledge is immaterial. The amount of her lien upon it is greater than $740, its endowment value at the time she exercised her option. The plaintiff admits in this action that if she is entitled to
Judgment modified by directing judgment for defendant Ann Healey for the fund brought into court, with costs against the plaintiff in the several courts, and enjoining the prosecution of her separate action against the plaintiff, and with judgment in favor of the plaintiff against the other defendants, declaring that they have no interest in the policy, with costs in favor of the plaintiff against the defendants Peterson & Packer, and in favor of the infant defendants against the plaintiff for the costs as awarded below with the disbursements upon this appeal.
Judgment modified and directed as stated in opinion.