
    John W. Kerr, App'lt, v. The Union Mutual Life Insurance Co., Resp't.
    
      (Supreme Court, General Term, Third Department,
    
    
      Filed May 9, 1893.)
    
    1. Insurance (life)—Parties.
    A husband who procures a policy on his life in favor of his wife is a trustee of an express trust in relation thereto, and may maintain an action on the policy in his own name without joining his wife with him.
    2. Same—Action for paid up policy—Pleading.
    The complaint in this action set out two policies of insurance on plaintiff’s life in favor of his wife, which stated that after two or more annual premiums had been paid the policy “.becomes a non-forfeiture policy for an amount equal to one-tenth of that hereby insured for each and every premium which shall have been paid; ” that five annual premiums had been paid; that defendant had agreed to state and render an account of the ratio the policies had contributed to the surplus accumulations and to issue paid up policies, but had failed to do so, and demanded judgment for an accounting and the delivery of paid up policies. Held, that the complaint did not state facts constituting a cause of action; that the policies became paid up non-forfeiting policies by their own terms, and the court would not require a new or other policy; that an action for the pro rata earnings would not lie during plaintiff’s lifetime, and that the agreement stated was void for want of consideration.
    Appeal from final judgment entered upon interlocutory judgment sustaining demurrer to complaint.
    
      Linson & Van Buren (A. Van Buren, of counsel), for app’lt; Sawyer & Getty (Robert P. Getty, of counsel), for resp't.
   Mayham, P. J.

The complaint alleged the issuing to the plaintiff by the defendant of a life policy on the plaintiff’s life for $3,000, in consideration of the payment by the plaintiff of an annual premium of $213 each year for ten successive years for the benefit of Elizabeth Kerr, plaintiff’s wife.

The complaint then set out in haec verba the condition of the policy as follows: “ And it is hereby understood and agreed that after two or more of said annual premiums have been fully paid this policy becomes a paid-up non-forfeiture policy, for an amount equal to the sum of one-tenth of that hereby insured for each and every premium which shall have been so paid, requiring no further payments of premiums, subject to no assessment, but entitled to its apportionment of the surplus accumulations in the ratio of its contributions thereto.”

The complaint alleged that the plaintiff paid five annual premiums on the policy.

The complaint further alleged that the plaintiff requested an accounting with the defendant of the ratio of said policy’s contribution to the surplus accumulations of said defendant, and that defendant repeatedly promised and agreed to state and render said account and issue to the plaintiff a paid-up policy for the amount of said ratio, but has failed and neglected to do so.

The complaint also alleged that the defendant had a large surplus accumulation, during all the times of the transaction set out in the complaint.

The complaint also set out a second cause of action on another policy of insurance on his life for $5,000, on substantially the same terms, and rate of premium being for $225 annual premiums, which the plaintiff had paid annually for about five years, for the use and benefit of the said Eliza D. Kerr, or, in case of her death, her surviving children.

The complaint then demanded judgment that an account be taken between the plaintiff and defendant, in order that the surplus accumulations on each of the policies might be ascertained, .and that the defendant be directed to pay such sum to the plaintiff, or issue and deliver to him a paid-up policy or policies for the same.

To this complaint the defendant interposed the following demurrer :

“ The defendant demurs to the complaint of the plaintiff herein, and states the following as the ground thereof:
First. That there is a defect of parties plaintiff, in that Eliza D. Kerr, the wife of the plaintiff, is a necessary party plaintiff.
Second. That causes of action have been improperly united, in that the first cause of action stated in complaint does not affect the children of the plaintiff, while the second cause of action does.
Third. That the complaint does not state facts sufficient to constitute a cause of action.
“ The defendant further demurs to the first cause of action separately, and states, as the grounds thereof, that there is a defect of parties plaintiff, in that Eliza D. Kerr, the wife of plaintiff, is a necessary party plaintiff, and also that the said first cause of action, as stated therein, does not state facts sufficient to constitute a cause of action.
“ The defendant also demurs to the second cause of action separately, on the following grounds: First. That there is a defect of parties plaintiff in that Eliza D. Kerr, wife of plaintiff, is a necessary party plaintiff, and also that the surviving children of the plaintiff are necessary parties plaintiff. Second. That the said cause of action, as alleged, does not state facts sufficient to constitute a cause of action.’"’

This demurrer was sustained by the trial judge, and the defendant had leave to enter interlocutory judgment, with costs, with leave to the plaintiff, on payment of coste within twenty days, to amend his complaint, and in default of which defendant to have judgment dismissing the plaintiff’s complaint, with costs.

The appellant failed to pay the costs and amend the complaint, and after twenty days from the service of the same the defendant entered judgment dismissing the complaint, and from that judgment and the order for interlocutory judgment the appellant appeals.

The first question raised by this demurrer is, is there a defect of parties plaintiff appearing upon the face of the complaint? The complaint, upon its face, shows that the policy is for the use and benefit of bis wife. Standing upon that allegation alone, the wife, on the execution and delivery of the policy, became a party in interest in the same, and to any action which might affect her interest therein she would be a proper and necessary party unless the plaintiff who made the contract of insurance was a trustee of an express trust. Code of Civil Procedure, § 449.

The policy on its issuance became the property of the beneficiaries named in it.

Mrs. Kerr, therefore, became the beneficial owner of the first policy on its delivery to the plaintiff, and as the complaint docs not show that she had children, the same for the purposes of the questions raised on this complaint is true of the second policy, and the plaintiff became her agent only for the purpose of perfecting the same. Chapter 80 of Laws of 1840 ; Whitehead v. N. Y. Life Ins. Co., 102 N. Y., 143; 1 St. Rep., 344.

Did that make her a necessary party in an action by the plaintiff upon that policy? We think not. The section of the Code above referred to requires every action to be prosecuted in the name of the real party in interest, except that executors, administrators, trustees of an express trust, and persons expressly authorized by statute may sue without joining with them the persons for whose benefit the action is prosecuted.

The same section defines a trustee of an express trust to be “ a person with whom, or in whose name a contract is made for the benefit of another.” Within this language the plaintiff, who made this contract for the benefit of his wife, may sue without joining her with him.

The remaining question is, does the complaint state facts sufficient to constitute a cause of action ? If this question is to be answered alone upon the terms of the policy set out in the complaint, I am clearly of the opinion that the answer would be in the negative.

Assuming the clause of the policy set out in the complaint is to control, then no cause of action would exist in favor of the plaintiff, for the reason that the policy by its terms became, on the payment of two or more payments, a paid up non-forfeiting policy, and the court would not require a new or other policy of the same kind in, legal effect. Nor would the court on that clause alone compel the defendant to account and pay over to the plaintiff in money the pro rata surplus earnings, for the reason that they would not by that provision of the policy be due until the death of the plaintiff. Lyon v. Union Life Ins. Co., 44 St. Rep., 581.

But the complaint does not stop with that recital from the policy. It sets up an agreement on the part of the defendant to state an account of these policies and issue to the plaintiff a paid up policy for the amount of the ratio as fixed in the terms of the policy.

It is difficult to see upon what grounds such an agreement if made can be enforced, if it be held, as I think it must, that by the terms of the policy it became a paid up policy on the payment of the premiums, without liability of forfeiture for non-payment of future premiums, and without any agreement in the policy itself for accounting or payment during the life time of the assured.

I think the agreement as stated in the complaint is void for want of consideration, and that for that reason it does not st.-u'facts constituting a cause of action, and that the demurrer was properly allowed by the trial court.

Judgment affirmed, with costs.

Putnam and Herrick, JJ., concur.  