The Court below sustained a demurrer to a declaration filed in a suit instituted by the appellant against the appellee and, the plaintiff having refused to amend, judgment on the demurrer was entered in favor of the defendant. From that judgment this appeal was taken. The declaration alleges that on the 18th of December, 1888, the defendant, in consideration of the payment by Albert W. Clement of a premium of $249.45, and of a like sum to be paid annually thereafter during his life, agreed in writing, not under seal, to insure the life of said Clement for the term of twenty years, in the sum of five thousand dollars "to be paid to Margaret Clement, mother of the said insured, Albert W. Clement, or her legal representatives, thirty days after due notice and satisfactory evidence of the death of the insured." The death of the mother in the lifetime of the insured and his subsequent death, as well as some letters written by him to the agent of the company, which will be considered later, in connection with the claim of the appellant that the appellee is estopped to deny the liability, are also alleged. The appellant being the executor of the insured claims the amount of the insurance, and the appellee, while not denying its liability on the policy, contends that the money is payable to the legal representatives of Margaret Clement, and not to the executor of the insured.
"In ordinary life insurance, where no power of divestiture is reserved, the general doctrine prevails that the issue of the policy confers immediately a vested right upon, and raises an irrevocable trust in favor of the party named as beneficiary, a *Page 112 right which no act of the insured can impair without the beneficiary's consent." 3 Am. Eng. of Law (2nd ed.) 980. The great number of authorities cited in the notes to sustain that statement of the law will relieve us from the necessity of quoting from them, or discussing those in conflict with it. But Margaret Clement, the beneficiary named, having pre-deceased the insured, the appellant contends that upon her death all her interest ceased, and upon the death of the insured the insurance passed to his executor. It is said that we must be governed by the intention of the parties to the contract, the insurance company and the assured, as evidenced by the policy when read in the light of the surrounding circumstances, and that Albert W. Clement only intended to make provision for his mother in case she survived him, and he could have no object in providing for her executor or administrator. If by a proper construction of the terms of the policy it could be seen that the intention of the parties was to give Mrs. Clement the benefit of the insurance if she survived the insured, and, if she did not, that it was to go to his estate, there would of course be no question about the right of the appellant to recover. But there is nothing in the policy to justify us in reaching that conclusion. If such had been the intention, it could very easily have been expressed. That was not only not done, but by the terms of the policy the money was to be paid to Margaret Clement "or her legal representatives." Although we do not deem it necessary to have such words, in order to sustain the position taken by the appellee, they do, according to some authorities, strengthen that contention. They certainly negative to some extent the theory contended for by the appellant, that the intention was only to provide for the beneficiary named, and not for those representing her estate. It was said in Robinson v. Hurst, 78 Md. 70, that "the words `legal representatives' have a well recognized meaning in the law and ordinarily signify executors or administrators, and they will always be given this meaning, unless it can be seen that they were used in a different sense." There the policy was payable to the legal representatives of the assured *Page 113 and owing to the circumstances under which it was issued it was held that the assignment of the policy to a creditor with the consent of the company was valid. It was taken out solely for the purpose of reimbursing the creditor. In N.Y. Life Ins. Co. v.Flack, 3 Md. 341, the company agreed with the "assured, his executors, administrators and assigns" to pay the amount of the policy to the legal representatives of the assured, and it was held that the provision to pay to the legal representatives was designed to apply only to a case where the party died without having previously assigned the policy, and did not limit the power of assignment. But in each of those cases the policy was payable to the legal representatives of the assured and the right to assign them was sustained. In this case, if such had been the intention, the policy could have provided that the money should be paid to Margaret Clement, if living, and if not, to the legal representatives of the assured, and when we find that instead of so providing it was made payable to Margaret Clement "or her legal representatives" it is difficult to understand how it can be construed to mean his executor or administrator.
On page 987 of the volume of Encyclopedia of Law already referred to many cases are cited to show that the proceeds of policies payable to beneficiaries become assets of their estates when they die before the insured, and it is said that "Particularly if the policy is made payable to the `executors, administrators and assigns' of the beneficiary, as well as to the latter himself, it vests an absolute title which passes at death to the parties thus named." As said in Robinson v. Hurst,supra, the words used in this policy "ordinarily signify executors, or administrators," and, as there is nothing to indicate they were used in a different sense, that meaning should be given them.
The appellant has urged as an objection to this construction the fact that the mother of the insured had an insurable interest in his life, while her legal representatives did not have. It would serve no good purpose to enter into an extended discussion of the authorities, as to who have such an interest in the life of another as will authorize them to insure it. Even *Page 114 in those jurisdictions where the line is most closely drawn against insurance by those who have not what is recognized as an insurable interest in the lives of the insured, the doctrine is modified by exceptions which make it of little use in ordinary cases. In the first place they for the most part hold that when the insured contracts directly with the insurer, he can designate as his beneficiary one who has no insurable interest in his life, and then the insurable interest of the beneficiary having once attached need not, as a rule, be continuous. Numerous cases are cited on page 959 of 3 Ency. of Law, but our own decisions are sufficient. In Rittler v. Smith, 70 Md. 261, it was held that the assured may make a valid assignment of a policy on his own life to one who has no insurable interest therein, the policy being but a chose in action for the payment in money. "Such an assignment is valid in this State if it be a bona fide business transaction, and not a mere device to cover a gaming contract."Ibid 266. In Souder v. Home Friendly Society, 72 Md. 511, it was held that a person who has an insurable interest in the life of another may effect an insurance thereon, and can assign the policy, being a chose in action, to one who has no such interest, and recovery can be had on it by such assignee.
It was also stated at the argument that the policy contained a clause providing that at the end of twenty years, if the insured was then alive, the said sum of five thousand dollars should be paid to him, and that the application for the policy (made part of it), provided that on the surrender of the policy its surrender value should be paid to him. The declaration did not contain those allegations, but we are asked to remand the case for amendment, if we are of the opinion that they would make the declaration good and that it was not good without their insertion. But neither of those contingencies happened, and therefore they are immaterial. The rule that a beneficiary acquires a vested right at the inception of his contract between the insurer and the insured is applied to endowment as well as ordinary policies. Pingrey v. National Life InsuranceCompany, 144 Mass. 374; Lockwood v. Michigan Mutual LifeInsurance Company, 108 Mich. 334. *Page 115
But the principal question has been conclusively settled in this State in Thomas v. Cochran, 89 Md. 390. John Q.A. Herring was insured in a mutual benefit association, and under its rules he was authorized to designate any one as beneficiary, and could change the beneficiary at will, with the assent of the association, and "if possible" of the beneficiary named in the policy. He designated his wife as the beneficiary, and she died a year prior to his death. He left a will in which he gave the residue of his estate, including the insurance on his life, to his two children and the issue of two deceased children. After his death the insurance money was claimed by his executor, by the administrator of his wife's estate, by his two surviving children, and the children of his two deceased children, and a special case was stated to which the various claimants were parties. It was there said "It is conceded by all parties that if this were a case of ordinary life insurance the fund would be payable to Mrs. Herring's administrator, as the claim under the policy would in that event have by law devolved upon him." The question was then considered as to whether the contract between Mr. Herring and the Mutual Benefit Association differed from an ordinary contract of life insurance so as to require the application of a different rule. The distinction is recognized by some Courts but in this State it has not been, and in the case last cited it was held that "The designation by Mr. Herring of his wife, Ann M. Herring, as his beneficiary, when he joined the association, conferred upon her the beneficial interest in the proceeds of the policy when due. The estate thus acquired by her in the insurance and its proceeds, although it was liable to have been defeated by the appointment of a new beneficiary by her husband if he had made the new appointment, possessed the inherent qualities of the estate of a beneficiary under an ordinary policy of life insurance, and was a valuable asset, which at her death devolved upon her administrator." The words "or her legal representatives" were not in that certificate but without them it was held that the proceeds of the policy devolved on the administrator of the beneficiary *Page 116 who had died a year before the assured, although the insurance was in a mutual benefit association, and the insured had the right to change the beneficiary but had not done so. That case was decided upon the express ground that the interest of the wife was similar to that of a beneficiary in an ordinary life insurance policy, and therefore it necessarily follows, irrespective of other language to that effect used in the opinion, that the interest of a beneficiary, under a policy such as the one now under consideration, devolves upon the executor if there be one, or the administrator, if the beneficiary dies intestate. See also Expressman's Association v. Hurlock,91 Md. 595.
The only remaining question we are called upon to consider is whether the appellee is estopped to deny the right of the appellant to recover. The declaration contains two letters written by A.W. Clement to an agent of the company after his mother's death. On March 26th, 1898, he wrote to the agent acknowledging receipt of a letter from him and expressing surprise that the money went to his mother's heirs, as he supposed that on his death it would go to his heirs, and added "I wish to change the policy to read this now. It certainly would seem that I can do it without asking my brothers about it. I have no idea that they would object, but it seems to me just as well that if possible they know nothing of it. I await your check. Look this matter of heirs up before writing them." And again on April 6th he wrote "your check for $777.73 received today. I am very much obliged. I suppose that you found out about the payment of policy in case of death by the destruction of assignments. If it does not pay my legal heirs, please have it changed so that it does." The declaration alleges that after the receipt by the agent of those letters he received additional premiums on the policy from Mr. Clement. It is upon those facts that the appellant relies for the alleged estoppel. As a result of the rule announced above as to the vesting in the beneficiary of the right to the insurance money, it follows that the insured cannot assign or surrender the policy or change the beneficiary without the consent of *Page 117 those originally named unless he has reserved that power or the policy so provides, as will be seen by many of the cases cited in the Encyclopedia of Law above referred to. See also pages 984 and 985 of that volume. That being so it is manifest that the insurer cannot make the change for him, and the appellee cannot be estopped from denying liability for not doing what it was absolutely powerless to do. It matters not that the insured may be under no legal obligations to continue the payment of the premiums. If he refuses to do so the beneficiary, or someone on his behalf, may pay them and continue the policy in force.Pingrey v. National Life Insurance Company, 144 Mass. 374;Anderson's Estate, 85 Pa. 202; Glanz v. Gloeckler, 104 Ill. 573. It is useless therefore to consider the fact that it is not alleged that A.W. Clement believed the change had been made, or executed any papers for that purpose, or other matters reflecting upon the question. Even if the agent had had the power to change the beneficiary, it would be carrying the doctrine very far to say that the company was estopped by the allegations in this declaration, as it is not even alleged that Mr. Clement was not aware that the change had not been made when he paid the additional premiums, and it cannot be assumed that he supposed an insurance company would make such a change in a policy without the execution of a more formal paper than those letters. He did not die until March 3rd, 1901, nearly three years after he wrote the letters, and certainly had ample opportunity to ascertain that the policy had not been changed.
Being of the opinion that the appellant, the executor of Albert W. Clement, is not entitled to this insurance money, the judgment will be affirmed.
Judgment affirmed, the appellant to pay the costs.
(Decided April 1st, 1902.) *Page 118