It is not claimed that the attempted change of beneficiary was completed in the manner provided for in the policy, by surrender of the policy and indorsement of the change thereon by the company. On the contrary, the finding is that the policy remained continuously in the possession of the original beneficiary, Catherine, who paid all the premiums thereon and was never asked to give it up. She had no *Page 491 knowledge of any desire or attempt to change the beneficiary until she went to the company's office to prepare the proofs of death.
The plaintiff's claim is that the formalities prescribed in the policy for carrying out the reserved right of changing the beneficiary were solely for the benefit of the insurance company, and that it might and did waive their performance by treating Jane as the substituted beneficiary in making the loan of September 2d 1915.
This claim is based on the supposition that Catherine had no legal interest in the fruits of the policy, but merely an expectancy of which she could be deprived without notice. It is true that a beneficiary named in a death-benefit certificate issued by a fraternal benefit association, and providing for a change of beneficiary, takes nothing more than a mere expectancy. SupremeColony v. Towne, 87 Conn. 644, 648, 89 A. 462; Orderof Scottish Clans v. Reich, 90 Conn. 511, 514,97 A. 863. But that is not necessarily true of beneficiaries named in an ordinary life insurance policy, although the right to change the beneficiary in a prescribed manner is reserved. "In case of an ordinary policy (of insurance), the right of the person for whose benefit a policy is issued cannot be defeated by the separate or joint acts of the assured and the company, without the assent of the beneficiary." Masonic Mutual BenefitAsso. v. Tolles, 70 Conn. 537, 544, 40 A. 448. It seems logically to follow, that the insertion in such a policy of a provision for changing the beneficiary in a prescribed manner ought not to extinguish the interest of the beneficiary, but to qualify it. The later decisions so hold. Indiana Nat. Life Ins. Co. v. McGinnis,180 Ind. 9, 101 N.E. 289; Filley v. Illinois Life Ins.Co., 93 Kan. 193, 144 P. 257; Christman v. Christman,163 Wis. 433, 157 N.W. 1099.
Moreover, companies authorized to carry on a general *Page 492 life insurance business may contract directly with a beneficiary who has an insurable interest in the life of the assured; and there seems to be no reason why the interest of such a beneficiary may not be absolute or qualified according to the terms of the policy.
In this case the wife, having an insurable interest in the life of her husband, joined in the application for a policy which, on its face, provided for the presentation of the policy to the company, for indorsement, before any change of beneficiary should become effective. She took the policy into her own possession, apparently relying on that provision for her protection, and paid all the premiums. Under these circumstances she had an interest in the policy of which she could not be deprived except in the manner prescribed therein.
Assuming, without deciding, that she was bound to deliver up the policy to the assured on demand, the finding is that no such demand was made. Whether she had a lien upon the policy for premiums advanced — at least to the extent of its cash surrender value — need not be determined. She had a legal interest, as distinguished from a mere expectancy, of which she could not be deprived except in the manner prescribed in the policy, and therefore the provisions as to the mode of changing the beneficiary were not solely for the benefit of the insurance company. Even if they were so intended by the company, they hold out on their face an inducement for the payment of premiums by a beneficiary to whom the policy is delivered. In the long run the payment of premiums inures to the benefit of the company, and if a beneficiary pays premiums on the faith of an apparent protection afforded by the terms of the policy, he ought equitably to be protected as far as the terms of the contract will protect him.
It does not appear from the finding whether the company knew that the premiums were being paid by *Page 493 the beneficiary. It did know that she joined in the application, that she had an insurable interest in the life of the assured, and the policy contained provisions on the faith of which she might suppose herself to be protected in paying premiums. Under such circumstances it is not asking too much of insurance companies to see that the terms of the policy are complied with before assenting to a change of beneficiary.
This conclusion makes it unnecessary to pass on the somewhat doubtful question whether the company did in this case assent to an informal change of beneficiary.
There is no error.
In this opinion PRENTICE, C. J., RORABACK and SHUMWAY, Js., concurred.