
    Mary Baker, as Administratrix, etc., of Adam Baker, Deceased, Appellant, v. Charles Baker, Respondent, Impleaded with Metropolitan Life Insurance Company, Defendant.
    First Department,
    January 26, 1906.
    Insurance — burden oh beneficiary in lapsed • policies to show a .vested, interest therein — vested right of former beneficiary hot presumed ■ after .change of beneficiary.
    A beneficiary who claims a vested interest in former life insurance policies which have lapsed for non-payment and have been lost or destroyed, and in .place of which other policies valid on. their face have been .issued with another beneficiary, is- under the burden of showing that he had. such vested interest. There is no presumption that said former policies did not contain a clause giving the insured a right to change the beneficiary. . •
    
      Such burden of proof is nqt met by merely-showing that the claimant was sub-, stituted as a beneficiary on the death of a former beneficiary by the filing of a certificate of such change by the insured, which certificate was not rejected by the insurer, and it is shown that the failure to reject the same was not an admission by the insurer of the rights of the new beneficiary, but merely left the matter open for future determination.
    The fact that, on the issuing of the new policies in place of the old, which had lapsed, still another beneficiary was named, weighs against the claim of a vested light by the former beneficiary, who was first substituted.
    Patterson, J., dissented.
    Appeal by the plaintiff, Mary Baker, as administratrix, etc., of Adam Baker, deceased, from a judgment of the Supreme Court in favor of the defendant Charles Baker, entered in the office of the clerk of the county of New York on the 10th day of May, 1905, upon the decision of the court rendered after a trial at the New York Special Term dismissing the plaintiff’s complaint upon the merits, and directing the defendant insurance company to pay to the respondent the money in suit.
    
      John McG. Goodale, for the appellant.
    
      Leonard J. Langbein, for the respondent.
   O’Brien, P. J.:

This action is brought to recover the amount due under three policies of insurance issued by the defendant, the Metropolitan Life Insurance Company, upon the life of Adam Baker, now deceased. The proceeds of these policies are claimed by two persons— the plaintiff, who is the administratrix and wife of the insured, and the defendant Charles Baker, his son by a- former wife. The insurance company stands ready to pay the money to whichever claimant is found by the court to ,be entitled thereto, so that the real issue presented is between the plaintiff and the defendant Charles Baker.

The three policies which are the basis of plaintiff’s claim were issued in 1894 and made payable to the administrator or executor of the insured. As no question is raised concerning the appointment and qualification of the plaintiff as his administrator, she has prima facie established her right to the proceeds of the policies, but the defendant Charles Baker alleges that prior to their issuance by the company he had acquired a vestéd' interest in three former policies issued by the same company upon the life of Adam Baker, - the surrender of which was '.the consideration for the issuance of the 1894 policies; that having such vested interest he could not be deprived of it -without: his consent by • the act of- the insured in changing the beneficiary, arid, thérefore,. that the present policies are ' void..

' - This is an affirmative defense. To sustain it the burden-rested on Charles Baker. He was bound to establish by a preponderance of evidence that the 1894 policies, although valid" upon their face, are ineffectual, and their issuance was unauthorized,- because in derogation of his vested right in the previous policies, for which the present ones were substituted. In other words, the burden rested upon him of establishing all the facts necessary to avoid the present policies. .The trial court held that he had established this defense, but with this conclusion we are unable to agree. ■

' From the record before us it appears that" in 1884 and 1885 the .insurance- company issued three policies upon the life of Adam Baker. These policies have beep destroyed or lost, and the evidence is very unsatisfactory concerning the provisions which they contained. It was shown, however, that in his applications the insured named as beneficiary Rose Baker, his then wife, but the witness Frothingham, assistant manager of the law and claim division of the'insurahce company, testified, without contradiction, that the policies themselves did ■not mention the name of the beneficiary. Rose Baker subsequently died, and thereafter the insured sent to.the company a..certificate entitled “ Change of. Beneficiary,” in which he certified that lie was the person insured, and had personally paid all premiums thereto- • fore payable on the policies, and lie requested and authorized the company, in the event of his death, to pay over the proceéds thereof to Charles Baker, his son, instead of the person' designated in the applications for -the policies. It appeared from the undisputed testimony that it was the custom of the company- upon receiving such ■ certificates to return them if it rejected the proposed change of • beneficiary, otherwise to attach, them to the policy and take no ■further action thereon until after the death of the insured, when, if a claim was made by the person, named in the- certificate^ the company would then, act as it deemed proper under the circumstances. It further appears, however, that although a certificate might not be returned, its retention did not necessarily mean that the company approved the change of beneficiary, or that it would, upon the death of the insured, pay the amount of the policy to the person named in the certificate, as such person would not always be deemed to be the beneficiary under the policy.

While matters were in this situation the three original policies lapsed by reason of the non-payment of premiums, and thereafter in 1894 the new policies now in question were issued, payable to the insured’s executors and administrators.

Upon these facts the trial court held that Charles Baker had a vested interest' in the original policies of insurance, which interest attached to. the three paid-up policies issued in 1894, and that he was, therefore, entitled to -receive the proceeds thereof.

With this conclusion, as already indicated, we are unable to agree, although we are not unmindful of the principle stated in Griswold v. Sawyer (125 N. Y. 411), quoted with approval by the Court of Appeals in the recent case of Leonard v. Harney (173 id. 352), that “ it is elementary law that where a policy is for the benefit of persons named therein to whom the sum insured is payable, it cannot be assigned without the consent of the persons named and all of them. The insured may destroy the policy by omitting to pay the premiums and thus failing to keep it in life, but he cannot impair the interests of the persons named as beneficiaries by a surrender or assignment thereof.”

In the present case the original policies are not produced. They have been lost or destroyed, and no evidence was given as to their contents which tends to show the rights of either the insured or the beneficiary therein. While in the absence of such proof a presumption arises that a life insurance policy payable to a \beneficiary named therein created an interest in favor of such beneficiary, still such a presumption in the present case cannot override the fact that the company has issued new policies, valid upon their face, which would be void if such prior vested right existed. It cannot be presumed that the company.acted illegally and without warrant in issuing the new policies, the more natural presumption being that the company and the insured did what, under the provisions of the lost policies, they had the right to do.

■The only evidence produced as to the contents, of the original-policies is that there- was a provision' in them to the effect that the. production. by the company of the policies and a- receipt for thé payment _of the amount due thereunder would be conclusive evidence. that the same had been “paid to-and received by the person or persons lawfully entitled to the same.” But this did not in any way define the lights, of the insured or the-.beneficiary under the contract itself ; .it simply was á eovenant.affbrding protection to the company when it had paid the amount due thereunder: The only other material provision of the policies established by the evidence was' one to the effect that they would be void after non-payment of premiums for á specified time:

Apart from the presumption arising from the fact that Charles Baber was named as beneficiary in th.e certificate, there’is ho evidence to show that he had any interest under t\ie original policies. They'may have contained a provision, entitling the insured to change the beneficiary whenever and to whomsoever, he wished, which would be consistent with the fact that the company thereafter issued the policies of 1894, payable to the executors and administrators of the insured.. If they did contain such a provision then Charles Baber would have no right to share in the proceeds and the court cannot. assume in ■ the ' absence of evidence that such a-provision did not exist!

The particular fact which seems to have b.een relied upon by the Special Term in reaching the conclusion that Charles Baker had a Vested interest in the former policies which attached to the new ones when- issued; was the fact, as stated; that he was named -as beneficiary in the certificate referred to, but if this is conclusive as showing that after naming Charles as beneficiary the- insured had . exhausted his power to change the beneficiary, then why, by a like process'of reasoning, should it not be held that the power of selecting a beneficiary was exhausted when the wife was named ? ■ It may be assumed, however, although no testimony was given on that subject, that upon the death of the wife, her interest in the policy ceased and á new beneficiary could properly have, been designated . by,the insured; but this does-not help the respondent, Charles Bak.er, for the certificate made by the insured after the death of his first wife does not tend to prove that thereafter he had not the right to again change the beneficiary. Furthermore, the uncontradicted evidence shows that áuch a certificate did not in and of itself effect a change of beneficiary so as to give the person' named an interest in the policy. On the 'contrary, the company reserved to itself the right to determine, upon the death of the insured, whether such person was, or was not, properly designated as beneficiary ; and the inference from the testimony of Frotliingham is that there might be cases where the beneficiarynamed by' the insured in the certificate would not be a proper one under the terms of the policy. In the absence of proof, therefore, to sustain it, the court cannot indulge in a presumption that would in effect set aside and annul subsequent policies issued by the company and valid upon their face.

For these reasons we think that Charles Baker failed to establish his interest in the proceeds of the policies now before the court and, therefore, that the judgment must be reversed and a new trial ordered, with costs to the appellant to abide the event.

McLaughlin, Laughlin and Houghton, JJ., concurred; Patterson, J., dissented.

Judgment reversed, new trial' ordered, costs to appellant to abide event.  