Comegys v. National Union Assurance Society

California Court of Appeal Jan 16, 1935 No. Civ. 9617Published

Before: Spence

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Holding. The court held that the intervener failed to state a cause of action against the named beneficiary for the proceeds of a benefit certificate, as the insured may designate any relative within the permitted statutory classes as a beneficiary, and the proceeds are not subject to the claims of the insured's creditors absent fraud or a specific trust agreement.

Issues

Does a complaint in intervention state a cause of action for insurance proceeds based on a lack of insurable interest by the named beneficiary?
Does a statutory restriction on fraternal benefit society beneficiaries prevent an insured from naming a sister as beneficiary if children exist?
Are the proceeds of a life insurance policy subject to the claims of the insured's creditors in the absence of fraud or a trust agreement?

Disposition. affirmed

Quotations verified verbatim against the opinion

“these authorities clearly establish the rule that where one takes out a policy of insurance on his own life, he may ordinarily name any person as his beneficiary regardless of whether said beneficiary has an insurable interest”

“It is well settled that in the absence of fraud or a statutory provision to the contrary, any life insurance taken out by the assured in favor of another is payable to the named beneficiary as against the creditors”

“we conclude that the allegations of the second amended complaint in intervention were insufficient to establish any right on the part of the intervener to the proceeds of the benefit certificate”

SPENCE, J.

Plaintiff, a sister of Lloyd C. Comegys, deceased, brought this action against defendant National Union Assurance Society, a fraternal benefit society, to recover the sum of $5,000 as the proceeds of a certain benefit certificate issued by said society to said Lloyd C. Comegys, during his lifetime. Evelyn Elaine Comegys, a minor, and the daughter of said deceased, intervened. Pursuant to stipulation of all parties and an order of court based thereon, the defendant society paid the proceeds of the benefit certificate to a trustee to abide the result . of this litigation between plaintiff and the intervener. The action was thereupon dismissed as to the defendant society. Upon the hearing of the demurrer to the second amended complaint in intervention, the trial court sustainéd said demurrer without leave to amend. ■ Judgment was entered ordering the dismissal of said second amended complaint in

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intervention and further ordering that the intervener take nothing in said action. Said intervener appeals from said judgment.

The controversy here is solely between the rival claimants for the proceeds of said benefit certificate. Plaintiff, the sister of the assured, was the named beneficiary.. The intervener, the daughter of said assured, was a minor of the age of nineteen years. Her mother, who was appointed as guardian

ad litem

for the intervener, was the divorced wife of said assured. The final decree of divorce had been obtained in 1914, and said decree, as modified in 1920, ordered the assured to pay the sum of $30 per month for the support and maintenance of said intervener. The complaint of plaintiff, the named beneficiary, against the defendant society was in the usual form. The complaint in intervention was in three counts.

The intervener states as follows: “The question involved is—Does intervener’s complaint state a cause of action for said proceeds? In substance, the first count alleges that she is a minor and the only child of assured; that pursuant to a divorce decree, assured, her father, was ordered to maintain her. The second count alleges that assured promised to maintain her all her life and that she would be taken care of from said proceeds. The third count alleges that said beneficiary had no insurable or pecuniary interest in life of insured and that intervener was a dependent of assured. All counts allege that insured left no property or funds for said purposes except said proceeds.” The intervener contends that each of said counts states facts sufficient to support her complaint in intervention for the proceeds of said benefit certificate, but in our opinion the intervener’s contention cannot be sustained as to any one of said counts.

Comegys v. National Union Assurance Society

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SPENCE, J.

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