Bennett v. Rosborough

Hines, J.

I dissent from the opinion of the majority in this case. I can not agree to the proposition that where a husband' takes out a policy of life insurance, in which he names his wife as beneficiary, and dies without having changed the beneficiary or assigned the policy, “the wife will be entitled to the money payable under the policy after the death of the insured, in a contest with a creditor of the husband, although at the time the insurance was-obtained and the premiums paid the insured was *275insolvent and the premiums were paid with money stolen from the creditor.” The majority put their decision upon the Civil Code (1910), § 2498, Smith v. Head, 75 Ga. 755, and Hubbard v. Turner, 93 Ga. 752 (20 S. E. 640, 30 L. R. A. 593). These authorities do not sustain the above doctrine. The code section is as follows: “ The assured may direct the money to be paid to his personal representative, or to his widow, or to his children, or to his assignee; and upon such direction given, and assented to by the insurer, no other person can defeat the same.” The •meaning of this section does not justify the position taken by the court in this case. .Its meaning is clear. When the insured-takes out a policy of life-insurance and directs the money arising therefrom at his death to be paid to his personal representative, his wife, his children, or to his assignee, and when such direction is given and assented to by the insurer, no other person can defeat the same by giving any other direction as to how such money shall be paid. It does not mean that any person who may have an equitable interest in the proceeds of .such policy can not enforce the same against the beneficiary named therein. Persons who for any reason may have such equitable title or interest in such policy, or in its proceeds, upon the death of the insured can enforce the same. This doctrine has been recognized by a long line of decisions of this court.

In Nally v. Nally, 74 Ga. 669 (58 Am. R. 458), an unmarried man took out a policy of insurance on his life, naming his sister as beneficiary. The brother delivered the policy to the sister, and subsequently married, and as an inducement he agreed that if the woman would marry him she should be made beneficiary in said policy. When the next semi-annual premium fell due the insured paid it on condition that the beneficiary should be changed from his sister to his wife. The officers of the insurance company agreed to attend to the mattér, but overlooked it; and after the insured’s death, it was held that the wife was entitled to the proceeds of the policy, although the wife had never been substituted as beneficiary in place of the sister. The ruling in Nally v. Nally was followed in Brown v. Dennis, 136 Ga. 300 (71 S. E. 421), in Page v. Bell, 144 Ga. 650 (87 S. E. 887), and in Dell v. Varnedoe, 148 Ga. 91 (95 S. E. 977). In the latter ease a brother took out a benefit certificate in a mutual benefit *276association, in which his sister was designated as beneficiary. He afterwards married, and agreed with his wife that if she would pay out of her personal funds the premiums on this certificate as they fell due he would cause her to be named as beneficiary in the policy with the right to collect the proceeds thereof upon his death; and where the insured in accordance with the agreement designated, by his endorsement entered upon the policy, his wife as the beneficiary therein, and caused his signature-to be attested by the secretary of the local camp of said association and exhibited the same to his wife, but did not forward the policy to the association as required by its by-laws, so as to perfect the change of beneficiary, the wife in a contest with the sister over the insurance fund was, “ upon the application of equitable principles, entitled to the fund.”

We might multiply these decisions; but the above establish the doctrine that when the insured directs that the proceeds of a policy of insurance on his life be paid to the beneficiary therein named, persons having equitable claims on the proceeds can enforce the same against the beneficiary named in the policy. The decisions of this court cited in the opinion of the majority do not sustain the principle announced by this court. The case of Smith v. Head, 75 Ga. 755, involved a controversy between the wife of the insured, who was named in the policy as beneficiary, and a creditor of the husband, to whom the wife had assigned the policy to secure a debt due by the husband to the assignee. Tt was held that the assignment was void. The rights of creditors of the husband to the proceeds were not involved. In Hubbard v. Turner, it was distinctly recognized that creditors might have the right to subject the proceeds of an insurance policy to the payment of their claims, after the husband had paid the premiums when he was insolvent and while indebted to said creditors.

The principle announced by this court can not be the true law. If it were, one owning $100,000 worth of property and owing $75,000 of debts could convert his property into cash, invest the same in paid-up insurance, naming his wife as beneficiary, and the creditors of the husband could not subject the policy or its proceeds to the payment of their claims. If the doctrine announced by the majority is the true law, if a bank cashier were to steal $100,000 from a bank, invest it in paid-up *277insurance, and take out a policy in which his wife were named as beneficiary, the bank could not enforce its claim against the policy or the proceeds thereof and collect the same on the death of the insured. • This doctrine, it seems to me, is wholly untenable. The overwhelming current Of decisions in other jurisdictions declare it to be contrary to the true doctrine.

For the above reasons, I am unable to agree to the conclusion reached by the majority. I am authorized to say that Gilbert, J., concurs in this dissent.