
    Joseph W. Merchant et al., Plaintiffs, v. Nettie M. White, Defendant.
    (Supreme Court, Broome Trial Term,
    March, 1902.)
    Specific performance of a parol agreement to adopt — Life insurance — Vested interest of wife — Insured as agent of the beneficiaries.
    In 1865 Morris R. Merchant, who had never had issue and who died in 1900, insured his life making the insurance payable first to his wife Mary A., who died in 1887, and in case of her death before his own, to his heirs-at-law. In 1873 the father of Nettie May Smith, her mother being dead, by an instrument under seal and for a consideration of one dollar granted to Morris R. Merchant “ the custody, tuition and services ” of Nettie, then aged about five years, during minority and also surrendered during the term his rights as father. . Mary A. Merchant in no way consented to this transaction. At the ' age of seventeen Nettie ran away from her home at the house of Morris R. Merchant, married without his consent a -person named ' White and thereafter lived apart from Merchant almost continuously. In an action brought after his death to determine whether his brothers as sole heirs-at-law or Nettie claiming as an heir-at-law by adoption were entitled to the fund, she offered to show parol promises made by Merchant to her mother and father to make her his heir and asked specific performance of them.
    Held, that the evidence as to the alleged adoption was too meagre, Indefinite and too much in conflict with the written agreement of 1873 to justify the granting of specific performance, and particularly where the rights of innocent third parties might suffer.
    That Mary A. Merchant had a vested interest in the policy upon its delivery — an interest which upon her death passed to the heirs-at-law — and that she had never assented to the adoption nor done anything to prejudice her rights as beneficiary while they existed.
    
      Semble, that in procuring and keeping up the insurance Morris R. Merchant had regarded himself and was the agent of the beneficiaries, and that without their consent he could not .have changed the beneficiary, if he had desired to do so.
    That the conduct of Nettie M. White indicated that she had never considered herself entitled to the fund.
    Action to determine who is entitled to the fund arising out of an insurance policy, issued by the Northwestern Mutual Life Insurance Co. upon the life of Morris R. Merchant for $5,000, made payable, first, to Mary A. Merchant, his wife, and, in case of her decease, before the death of said Merchant, to his heirs-at-law.
    T. B. & L. M. Merchant, for plaintiffs.
    H. D. Messenger, for defendant.
   Eobbes, J.

This is an action to determine who is entitled to the fund arising out of an insurance policy, No. 10,029, dated April 8, 1865, issued by the Northwestern Mutual Life Insurance Company, upon the life of Morris R. Merchant, for five thousand dollars ($5,000) ; made payable, first, to Mary A. Merchant, his wife-; and, in, case of her decease, before the death of Morris R Merchant, the amount of said insurance is payable to his heirs-at-law.

The plaintiffs, Joseph W. Merchant and Hiram B. Merchant, are brothers of the insured. Jenette J. Merchant is the assignee, and has been substituted to the rights of Benjamin E. Merchant, who was also a brother of the insured.

Mary A. Merchant, the beneficiary, died on the 11th day of November, 1887. Morris R. Merchant, the insured, died, intestate, on the 5th day of January, 1900.

The policy of insurance was never, in any manner, changed, and no other individual beneficiary was ever substituted in the place, or stead, of Mary A. Merchant. The policy became a paid-up policy and was in force, payable to the heirs-at-law of Morris E. Merchant, at the time of his death.

The defendant, Nettie M. White, claims to be the legally adopted child of Morris R. Merchant, and she claims the right to the funds arising out of said insurance, as his heir-at-law, as the beneficiary under said policy.

After the death of Morris E. Merchant, proofs of loss were duly filed, and such steps and proceedings were taken that the said insurance company became charged with the payment of the funds arising under their contract of insurance with said Merchant.

An action was therefore commenced, first by the plaintiffs against the insurance company, upon said contract. An order was subsequently made, on the application of said defendant insurance company, to substitute Nettie M. White as the defendant in said action, for the purpose of settling the rights and equities between these parties. Merchant v. Northwestern Life Ins. Co., 57 App. Div. 375.

The fund arising upon said policy was paid into court, under an order duly entered, and said fund, with the interest thereon, is now in the hands of the treasurer of Broome county, awaiting the determination of this action.

The defendant is the child of Melvin Ó. Smith and Margaret Smith. Margaret Smith died when the defendant was about five year old, leaving the defendant and two other children and her husband, Melvin O. Smith, her surviving. After the death of the defendant’s mother, Melvin O. Smith moved to Wayne county, N. Y, and, upon some terms or conditions, the defendant went to live in the family of Morris E. Merchant. On the 30th day of January, 1873, the father of the defendant, under the name of M. O. Smith, executed, acknowledged and delivered to Morris R. Merchant an instrument in writing, which reads as follows, viz.:

“ Know All Men By These Presents: That in consideration of one dollar to me paid, I, Melvin 0. Smith, do hereby grant and convey to Morris E. Merchant of DeRuyter, in the county of Madison and State of New York, the custody, tuition and services of my infant daughter, Nettie May Smith, during the full term of her minority, and until she shall arrive at the age of twenty-one years; hereby giving and granting to said Merchant all the rights and powers vested in me as father during said term; and I hereby authorize said Merchant, at his option, to change the last name of said Nettie so that she may be hereafter known as Nettie May Merchant.”
“Witness my hand and seal this thirtieth day of January, in the year of Our Lord, One thousand, Eight Hundred and Seventy-three.
“ Signed and sealed in the presence of B. V. Ellis, and acknowledged on the same day before B. V. Ellis, a Justice of the Peace,
Wayne Co. N. Y.
“ M. O. Smith, [l. s.] ”

It will be seen that Mary A. Merchant- did not join in any agreement for, nor did she give her consent to, the adoption of the defendant, as required by Laws of 1873, chapter 830, passed June 26, 1873; as amended by Laws of 1887, chapter 703, passed June 25, 1887. Smith v. Allen, 161 N. Y. 478; Von Beck v. Thomsen, 44 App. Div. 373; S. C., affirmed, 167 N. Y. 601.

Morris R. Merchant did not execute such an agreement with Smith; it was only a release of the custody and the services of the defendant to Merchant.

On the trial of this action, it was sought- to be shown that Morris R. Merchant entered into a parol agreement with Margaret Smith to adopt said child as his heir, and to treat her in all respects as his own child. The parol agreement is seriously in conflict with the written instrument, put in evidence by the defendant. The parol evidence of the declarations of Morris R. Merchant on the trial is nearly evenly balanced between his alleged agreement with M. O. Smith, to make the child his heir, under the written instrument, defendant’s Exhibit 1, and his alleged parol agreement with defendant’s mother; the agreement was only contingent, never consummated. On the part of the defendant, it is now sought to enforce said alleged parol agreement, as the contract for the adoption of said defendant; and defendant asks for a specific performance of that contract. Can the written instrument be modified by parol evidence? Hill v. Blake, 97 N. Y. 216; Littlejohn v. Shaw, 159 id. 188; Browne v. Paterson, 165 id. 460. In actions for the enforcement of parol contracts, in equity, it is undoubtedly the rule of law that, before the enforcement of such'a contract will be decreed by a court of equity, it must appear affirmatively, and by the clearest evidence, that it was founded upon an adequate consideration; that it is certain and definite in all its parts, and that it is in no wise unjust to innocent third parties, nor contrary to public policy. Lennon v. Bradley & Currier Co., 27 Misc. Rep. 452; Gall v. Gall, 64 Hun, 600; S. C., affirmed, 138 N. Y. 675; Healy v. Healy, 55 App. Div. 315; Canada v. Totten, 157 N. Y. 281; Winne v. Winne, 166 id. 263.

The parol evidence given on the trial is so meager, contradictory, and indecisive of what the contract, in fact, was, and so violently disputes the written instrument, upon which the father of the defendant turned over, to said Merchant, the custody of the defendant, that it is extremely doubtful whether a court of equity ought to enforce the alleged parol contract, since to do so, would he to tear down and destroy the written instrument, conceded to have been made by the defendant’s father. Hill v. Nye, 17 Hun, 457; Hill v. Blake, supra; Carroll v. Collins, 6 App. Div. 106; Smith v. Allen, 161 N. Y. 478, affirming S. C., 32 App. Div. 374. The case of Smith v. Allen, supra, is much stronger, in its equities, than the case at bar.

The adoption of children was unknown to the common law of England, and exists in this country only by virtue of the statute. Matter of Thorne, 155 N. Y. 140.

It is very doubtful whether the provisions of the statute ought to be extended, where the rights of other innocent parties must, or may, suffer by a more liberal interpretation.

I think there is another serious objection to the enforcement of the alleged parol adoption. There is no pretense that Mary A. Merchant had any part, or lot, or ever acquiesced in the adoption of the defendant, so as to, in any. manner, conflict with her rights as the beneficiary under the contract of insurance. Mary A. Merchant had one child by a former husband. He was her heir-at-law.

The insurance was undoubtedly originally secured for the benefit of Mrs. Merchant; Morris R. Merchant having no children of his own.

It is quite impossible to assume from her relations with Morris E. Merchant that the defendant supposed herself to be entitled to the fund to become due upon this policy. It is unquestionably true that she was clothed, cared for, and educated by said Morris E. Merchant; and, while she must have known of the instrument in writing, defendant’s Exhibit 1 (which she produced in court and put in evidence upon the trial), at the age of seventeen years she deliberately ran away from home, married without the consent of her alleged foster father, and has almost continuously lived apart from him since.

While if the evidence in this case satisfied me that the contract of adoption, alleged in the answer, was actually made, and the circumstances justified the turning over of this insurance to the defendant, as her own, I might be inclined to do so; yet the defendant herself has so treated the alleged contract as to show that she was convinced of the justice of devoting its use to the care and maintenance of the insured, during his life, without seeming to be over anxious for his welfare, or .willingly taking upon herself the burden of his maintenance and support when he became old and helpless, and so sorely in need of a daughter’s love, sympathy and care.

ETor am I satisfied that, from the terms and conditions of the policy itself, the insured ever regarded himself anything more than merely an agent for his wife and his heirs, in perfecting and continuing said insurance.

I am inclined to think that Mary A. Merchant acquired a vested interest in the policy at the moment of its delivery to the insured; that he so regarded it and treated it himself; and that, by the terms of the policy, a vested interest passed, on the death of his wife, to his heirs-at-law and next of kin. Whitehead v. New York L. Ins. Co., 102 N. Y. 143; Walsh v. Mutual L. Ins. Co., 133 id. 408.

The evidence does not disclose any attempt, on the part of the insured, to change the form of the payment of the policy, nor to devote it to his own support and maintenance.

Again, after the death of his wife, had he so desired it, and understood that the defendant was his adopted child, he could readily have secured her substitution as the beneficiary under the insurance contract, and thus have placed beyond cavil dr dispute, the question of the fund arising under said contract. This he did not attempt, nor is there any suggestion, or excuse, given for his living in poverty and destitution, during his last years; if this insurance was a valid obligation to defendant, he could have had no other view than that the policy was vested in his heirs, whether or not they had any knowledge before his death of its existence. It is questionable whether he had any right, or authority, without the assent of the beneficiary, to change or surrender the policy. Whitehead v. New York L. Ins. Co., 102 N. Y. 143; Ferdon v. Canfield, 104 id. 143; Walsh v. Mutual L. Ins. Co., 133 id. 408; Cyrenius v. Mutual L. Ins. Co., 145 id. 576.

I am impressed with the belief that it would be a serious mistake to hold that, in the case at bar, the evidence warrants the declaration, by the court, of a specific performance of the alleged parol agreement to adopt the defendant as the heir of the insured.

Judgment is, therefore, ordered in favor of the plaintiffs, to the full extent of the fund deposited in court; but I think, under the circumstances of this case,- it should be without costs to either party.

Judgment for plaintiffs, without costs.  