Slocum v. Northwestern National Life Insurance

Life insurance: Rescission Oy insurer: Beneficiary’s rights. 1. A beneficiary under a life insurance policy has no interest in the-premiums paid by the insured, and cannot sue to recover such premiums on an alleged wrongful rescission of the policy by the insurer. 2. While the right of a beneficiary under a life insurance policy is a vested one, it is in its nature a mere expectancy, subject to be defeated by the act of the insured, and will not entitle him to bring an action, during the insured’s lifetime, for damages-caused by the alleged wrongful termination of the policy by the insurer.

Appeal from an order of the circuit court for Dane county: E. Ray Stevens, Circuit Judge. The Northwestern Mutual Relief Association, duly incorporated in 1882 under the general laws of the state of Wisconsin, was reorganized and reincorporated on January 19, 1892, being authorized and empowered to- insure and indemnify its members on the assessment plan of life insurance-against accident, old age, and death, and against either of them. In 1899, under the law providing for the incorporation of life insurance companies or associations upon the stipulated premium plan, this association availed itself of' the powers granted by the law, and in the same year changed its corporate name to the Northwestern National Life Insurance Company. This association acted under the laws of Wisconsin, and was located at Madison, Wisconsin, and will hereafter be called the “Madison Company.” On August 29, 190Í, the Madison Company and the defendant, a Minnesota corporation of the same name, were consolidated, and the-defendant reinsured all of the members of the Madison Company, including one James Slocum, then a member in good standing of the Madison Company. By this consolidation all of the assets and property of the Madison Company were transferred to the defendant and the Madison Company ceased to do business. In 1882, pursuant to his application, there was issued to James Slocum by the Madison Company a certificate of membership and a life insurance benefit, not exceeding the sum of $2,000. In March, 1901, James Slo■cum surrendered this certificate of membership to the Madison Company and received therefor a policy of insurance. By the conditions of the policy the Madison Company agreed to pay, within ninety days after the acceptance of satisfactory proof of the death of James Slocum, the sum of $2,000 to the beneficiary of the insured designated last on the back of the policy. This policy was granted in consideration of the payment of certain bimonthly premiums. The beneficiaries last designated on the back of the policy are the plaintiffs Alva Slocum, and Delia Mach, respectively a son and daughter of James Slocum, the insured. . The complaint alleges what amount was to be paid as a premium by the insured and that, according to the terms and conditions of the policy, the insured paid or caused,them to be paid to the Madison Company and the defendant until February 10, 1903. It is alleged that on this date he was ready, walling, and able to pay the sum due according to the terms of the policy and other agreements and contracts relating to it, but that the defendant company, by a public declaration on or about the 13th of November, 1902, and by notification of James Slocum on January 10 and February 10, 1903, stated that it had abandoned, repudiated, and rescinded the policy and contract of insurance. Under date of February 11, 1908, the defendant company informed Delia Mach, one of the plaintiffs and one of the beneficiaries last named on the back of the policy, that it would not carry out the policy unless the insured paid a larger premium, and that it would carry the insurance for only one year, that is, during the current seventy-fifth year of James Slocum’s life. It is alleg'ed that Alva Slocum,, last designated on the back of the policy as co-beneficiary with Delia Machj and James Slocum, the insured, were informed of this notice and its contents. It is alleged that the articles of reorganization and reincorporation of the Madison Company provide that the rights of membership shall be subject to the articles of incorporation, that the rights of members are fixed and determined thereby, that the amount of the benefit is not to be reduced, and that the rates of assessment are to be graded according to the ages of the members at the time of their joining the corporation. In November, 1906, James Slocum notified the defendant that he had paid all premiums and charges due from him to the defendant; that he and the plaintiffs, the beneficiaries last designated on the back of the policy, were not willing to pay premiums and charges'under the terms and conditions upon which, under its by-laws, the defendant has insisted since November 13, 1902; that James Slocum was willing aud able to pay all premiums and charges due under the terms of the policy; that they considered that the defendant had abandoned, broken, and rescinded the contract and policy of insurance; and that the plaintiffs in this action, therefore, demanded that the defendant pay them the damages accruing because of such abandonment and rescission. The damages demanded were $1,793.30. Defendant made no reply to this notice. Plaintiffs are the beneficiaries last designated on the back of the policy. Defendant demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action, and on the further ground that there was a defect of parties in that James Slocum had an interest in the cause of action and was a necessary party to a complete determination of the questions involved. This is an appeal from the order of the court overruling the demurrer on tlie ground tbat the termination and rescission of tbe contract by tbe defendant bad terminated tbe policy, and tbat this operated to secure to' plaintiffs tbe right to recover damages for injuries resulting therefrom.