Insurance, Life, Substitution of beneficiary. Assignment. A life insurance policy, made payable on the death of B.L., the assured, to M., H. and J., contained a provision permitting the substitution of a new beneficiary with the consent of the company, and provided that no such change should be valid unless signed by the president, secretary or treasurer of the company. The following instrument executed by the assured was assented to by the company in letters signed by its secretary: "I hereby transfer, assign and turn over unto A.G., creditor and relative, all my right, title and interest in Policy No. 2032 issued by the A.M. Life Insurance Company on the life of B.L. and all benefit and advantage to be derived therefrom subject to all the conditions of the contract." The assignee was a creditor to a large amount and the nearest relative of B.L., the assured. Held, that the assignment with the assent of the company constituted a change of beneficiary and the substitution of a new one.
KNOWLTON, J.
The policy on the life of the assured was made payable to a beneficiary who was not otherwise a party to the contract, and who paid no part of the premium. By the terms of the policy the beneficiary might be changed by the assured with the consent of the company. The beneficiary had no vested interest in the policy during the lifetime of the assured. May, Ins. (3d ed.) § 399 M. Holland v. Taylor, 111 Ind. 121. Martin v. Stubbings, 126 Ill. 387. Union Mutual Association v. Montgomery, 70 Mich. 587.
The language of the contract in regard to the change of the beneficiary is as follows: "The beneficiary named herein may be substituted at any time at the written request of the assured but any such change to be valid must have the consent of the association." A general provision as to changes of the contract was in these words: "Any change or modification of this contract will not be valid unless signed by the President Secretary or Treasurer of this association."
The only question in the case is whether there was a change and substitution of beneficiary by the assured with the consent of the association. The answer to this question depends on whether we construe the quoted provision broadly and liberally, or narrowly and strictly. The assured made an assignment of the policy for a valuable consideration to one who was her creditor for a large amount and her nearest relative. This assignment was made on a printed blank furnished for the purpose by the association. The correspondence between the representative of the assured and the secretary of the company shows very plainly that the change was consented to by the association. Was this a change of beneficiary and a substitution of a new one? The assignment purports to assign and convey all the right, title and interest of the assured in the policy, "and all benefit and advantage to be derived therefrom subject to all the conditions of the contract." The principal "benefit and advantage to be derived therefrom" was the right to receive payment of the stipulated sum after the death of the assured. This constituted the assignee the beneficiary under the policy, and put her in the place of the original beneficiary. In view of the fact that the assured had absolute control of the policy and of all rights under it, provided she acted with the consent of the association, we think it better to hold, in accordance with the manifest intent of the parties, that this assignment made with the company's consent constituted a change of beneficiary as much as if there had been a formal substitution of the second beneficiary for the first, with a reference to the part of the policy in which the name of the beneficiary appeared. It follows that the plaintiff should pay over the amount in controversy to the defendant Annie Gannon.
Decree accordingly.