Waters v. Kopp

Mr. Associate Justice Gould,

of the Supreme Court of the District of Columbia, who sat with the Court in the hearing and determination of the case in the place of Mr. Justice Van Orsdel, delivered the opinion of the Court:

To sustain the decree the appellees urge:

1st. That John Shea had no interest in the policy which he could assign to Mrs. Waters.

2d. That the assignment was invalid because of the relations of the parties as cotenants of the policy.

3d. That the assignment was invalid because of the fraud *580 practised, and the undue influence exercised, by Mrs. Waters and her husband upon John Shea.

1st. The policy was payable “to his wife, Maria Shea, if living, otherwise to his legal representatives.” The question is as to the meaning of the term-“legal representatives.” In insur- ■ anee policies the natural and usual-construction given these - words is that of “executor, administrator, • and assigns,” or' “executor and administrator,” thus making the policy payable to the estate of the insured in the absence or death of a named beneficiary. (Mutual L. Ins. Co. v. Armstrong, 117 U. S. 597 , 29 L. ed. 999, 6 Sup. Ct. Rep. 877; Robinson v. Hurst [Mutual Reserve Fund Life Asso. v. Hurst] 78 Md. 59 , 20 L.R.A. 761 , 44 Am. St. Rep. 266 , 26 Atl. 956 ; Johnson v. Van Epps, 110 Ill. 551 ). While in some cases these words have been construed rather forcibly; and to carry out the intention of the insured, to mean his children, or his wife and children, as in Griswold v. Sawyer, 125 N. Y. 411 , 26 N. E. 464 (two judges dissenting), yet there is no-reason for such effort in this case. Shea’s' six children were living when the policy was written, and it would have been both easy and natural to have made it payable to “his wife, if living, otherwise to his children,” rather than to have incorrectly used the term “legal representatives” to designate the latter, had he at that time intended his children to take as such in the'event of the death of his wife before the policy matured. The construction which parties put upon their contracts by their conduct is urged by appellees as of the highest value in settling its interpretation. This is true. As Lord Chancellor Sugden said in Atty. Gen. ex rel. Quin v. Drummond, 1 Drury & War. 363: “Tell me what you have done under a deed, and I will tell you what that deed means.” Applying this principle of construction, appellees call attention to the term of the Written contract already referred to between Shea and his six children, which recites that the proceeds of the policy, in case of the' death of said Shea, inured to the benefit of the children. ' That this recital is not inconsistent with the assignability of the-policy is made dear by the fact that in the same contract the *581 children, required Shea to bind himself “in consideration of their abiding by the same [that is, keeping up the premiums], to make no effort in anyway whatever, or to attempt in anyway, to change the character of said policy so as to affect the rights of said parties contributing to the payment of premiums as aforesaid.” The children failed to “abide by the same,” which, by their own agreement, left him free to assign.

This view renders it unnecessary to consider whether appellees can raise the question of the assignability of the policy, the insurance company having consented to the assignment and paid the money into court.

2d. It is contended by appellees that as the children of Shea were cotenants of this policy as beneficiaries therein, that Maria Waters, one of the cotenants, could not take an assignment thereof, pay the premiums thereon, and recover the proceeds upon its maturity. This is based upon the recognized principle of law that a purchaser of an outstanding title or encumbrance upon the joint estate, for the benefit of one tenant in common, inures to the benefit of all, because there is an obligation between them, arising from their joint claim and community of interest, that one of them shall not affect the claim to the prejudice of the others. This rule has no application to the case under decision, for two reasons:

First, the -rule is one which the law implies. In this case, the parties did not choose to rely upon it, but entered into an express agreement which superseded any the law might imply, and provided for a forfeiture of the interest of each who failed to comply with the terms of the contract. Each was perfectly competent to enter into this contract. It was not illegal, or fraudulent, or even unfair, and their rights must be determined by it.

Second, there really was no “estate” in which they were tenants in common. The most that can be said of their rights under the policy is that they had an expectancy conditioned by their own agreement upon their paying the quarterly premiums. Failing to pay, their estate vanished, also by their own agreement. And neither in law nor in equity was any one of *582 them inhibited from taking np the burden of payments after it had been thrown down, and receiving an assignment of the policy. This would be true in the absence of an express agreement. As it is, each expressly agreed in writing and under seal, that his “estate” existed, even in futuro, under penalty of a forfeiture of his right in sharing in the proceeds thereof should he fail to make such contribution, i. e., his or her share of the premiums. That they failed, excepting Mrs. Waters, is undisputed. Under the circumstances it is immaterial whether they refused, or merely failed.

3d. The testimony disclosed no fraud or undue influence on the part of anyone in procuring the assignment of the policy. The evidence of any mental incapacity of Shea at the date he made it is slight and completely overcome by the testimony offered on this point by the appellants. It is suggested in appellees’ brief that, in the event the decree is reversed, the case should be referred to the auditor to ascertain the money expended in premiums in keeping up the policy by the respective parties, with directions to distribute the proceeds in the proportions evidenced by the amounts respectively expended; and Brashears v. Metropolitan L. Ins. Co. 1 App. D. C. 420, is cited. But to so order would require this court to write a new contract for parties who had already entered into one of a very different tenor. They agreed to forfeit all their interest in the proceeds of the policy if they failed to pay the premiums. The court would necessarily be compelled to find that contract void before it could substitute one of its own construction. There is nothing in the record upon which to base such a finding.

For the reasons given the decree will be reversed, with costs, and the cause remanded for the entry of a decree establishing the assignment of the policy in question by John Shea to Maria Waters, the appellant, and directing the collectors of the estate to pay the proceeds thereof to the said Maria Waters.

Reversed.

*583 A motion by the appellee Mrs. Waters, for a severance and the allowance of an appeal to the Supreme Court of tbe United States, was denied April 6, 1910. An application made to a justice of that court for the allowance of an appeal was granted April 27, 1910.