Summary
In Briggs v. Prudential Ins. Co. of North Amer. (8 Misc.2d 891) the insured borrowed without his wife's consent against his insurance policy, under which his wife was an irrevocable beneficiary.
Summary of this case from Fankuchen v. FankuchenOpinion
December 16, 1957
Newton, Morgan Morgan for defendant.
Rossi, Di Gaetano, Dorsey O'Connell for plaintiff.
This is an action on a life insurance policy. The face amount is $1,000. The insured took out the policy and caused the plaintiff, his wife, to be named beneficiary therein. He did not reserve the right to change the beneficiary. During his lifetime and while the policy was in effect, the insured borrowed money from the company, without the consent of the plaintiff beneficiary. The amounts which he borrowed, secured by an assignment of the policy, were never repaid. One or more premiums, due by the terms of the policy, also remained unpaid. The period of extended insurance, which went into effect pursuant to the terms of the policy, upon nonpayment of the premium, expired. Thereafter the insured died. Plaintiff, as beneficiary under the policy, claims the face amount thereof. Defendant declines to pay on the ground that it has no obligation thereunder.
The question presented, therefore, is whether or not the insured could borrow from the company on the sole security of the policy, without the consent of the beneficiary.
It is clear that this question must be answered in the affirmative. The original policy submitted on the argument provides among other things "the Insured may borrow from the Company, without the consent of the Beneficiary, if any, named herein * * * on the sole security of this Policy" (italics mine).
Plaintiff cites as authority for her contention that the consent of plaintiff was necessary, the case of Anderson v. Northwestern Ins. Co. ( 261 N.Y. 450). In that case the court did hold that the consent of the assured was necessary by reason of the fact that there was not in that policy a provision giving to the assured a right to assign the policy without the consent of the beneficiary. Such a provision is present in our case in the above-quoted language of the policy, itself.
Ferdon v. Canfield ( 104 N.Y. 143) had to do with a policy taken out by the beneficiary. Accordingly the contract was one between the insurance company and the beneficiary. Boffa v. Bove (121 N.Y.S.2d 709) and Caplin v. Penn Mut. Life Ins. Co. ( 182 App. Div. 269), also cited by plaintiff, are distinguishable too.
In Ruckenstein v. Metropolitan Life Ins. Co. ( 263 N.Y. 204) the wife of the assured was named as irrevocable beneficiary in a policy, the face amount of which was $20,000. The husband, without the wife's knowledge or consent, borrowed on the $20,000 policy and subsequently renegotiated it for a $5,000 policy. Upon his death the wife tried unsuccessfully to recover on the $20,000 policy and it was held that the insured had the right to renegotiate the policy without her consent and that in consequence she was limited in her recovery to the proceeds from the $5,000 policy. Accordingly this case is not authority, as plaintiff incorrectly contends, for the proposition that the irrevocable beneficiary of a life insurance policy has rights therein of which she cannot be divested without her consent. The case holds exactly the contrary. The rights of the beneficiary under a policy are subject to the language and terms of the provisions of the policy, itself, and accordingly, they may be destroyed by a change of beneficiary (where such right is reserved under the contract provisions of the policy) or rendered less valuable or destroyed by loans (where the right to grant loans to the insured is contained in the policy provisions, as it is here). ( Wagner v. Thieriot, 203 App. Div. 757, affd. 236 N.Y. 588; Bradshaw v. Mutual Life Ins. Co. of New York, 187 N.Y. 347.)
Accordingly under the facts which are not disputed, we necessarily come to the conclusion that there is no issue which requires trial. Defendant's motion is granted. It is not necessary to pass upon the plaintiff's application to examine the defendant before trial.