Silvey v. Hodgdon (1877) · DecisionDepot

Silvey v. Hodgdon

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Jul 1, 1877 No. No. 4731Published

Before: McKinstry, Wallace

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Holding. A parol trust regarding the proceeds of a life insurance policy is enforceable, provided the trust is clearly and distinctly proven, and such a trust does not contradict or vary the terms of the written insurance contract.

Issues

Whether a parol trust concerning the proceeds of a life insurance policy is valid and enforceable.
Whether an oral agreement regarding the disposition of insurance proceeds contradicts or is merged into the written insurance policy.
Whether a court of equity has jurisdiction to adjudicate a trust over insurance proceeds despite the legal title being held by another party.

Disposition. affirmed

Quotations verified verbatim against the opinion

“We have no doubt that such a trust should be clearly and distinctly proven”

Synopsis

Enforcement of Trust by Court of Equity.—If a person who desires to procure an insurance on his life for the benefit of his children makes a parol contract with another, by which the former is to pay the premiums and the policy is to be made payable to the latter, who is to hold it in trust for the children, and collect and hold the proceeds in trust for them, a Court of Equity will enforce the trust; and if the trustee is an improper person to receive the money and execute the trust, will remove him and appoint another.

Idem.—Such trust should be clearly and distinctly proved; but may be proved by parol evidence.

Opinion

argued that the trust could not be proved by parol, as it was an express trust, and cited Perry on Trusts cd. 1874, sec. 76 ;■ and Dickerson v. Dickerson., 2 Mur. 279; 1 Carolina -Law- Repository, 262; Steer v. Steer, 1 J. G. R. 1; Dean v. Dean, 6 Conn. 285 ; Hutchinson v. Tindall, 2 Green Ch.' 357; Starr v. Starr, 1 Iíamm. (1 Ohio) 321; Lloyd v. Ihglis Hxcr.'l Hesau, 333; Moran v. Hayes, 1 J. C. R. 343; Philbroke v. Delano, 29 Maine, ■ 410. ■ He also argued that Mrs.' Ho'dgdo'n was designated in the policy by the term “ assured ” ; and this term “ assured ” meant, not the person whose life was assured, but the person for whose benefit the [365]insurance was made, and cited Bliss , on Ins. p. 6, sec. 5, p. 500, sec. 320 (ed. 1872) ; Hagle v. Guardian Life Ins. Co. 6 .Robertson, 567; Same Case, 4 Abb. N. S. 346; and Wason- v. Colburne, 99 Mass.. 342.). ,

H. T. Sullivan, W. E. Turner,.and C. T. Botts,ior ,the Respondents, argued that .the policy of • insurance was :not the foundation but the subject of the. suit, and that it was the money which was the subject of the trust, and that the- question was whether the legal holder of personal property could be shown by parol to hold it.in trust for. others, and that the contract upon which the plaintiffs claimed was the verbal contract between Anthony Silvey and the defendant Susan, and cited Adams’ Eq. pp. 27*, 28*, 33*, (5th Am. ed.) where, .are- cited various text-books and decisions.; Hoge v. Hoge, 1 Watts, 213; Walgram v. Tebbs, 20 Jurist, (N. S.) vol. 2, p. 85; Jenkins v. Eldridge, 3 Story, 181; Bottsford v. Burr, 2 John. Ch. p. 174; Eoote v.. Foote, 58 Barb. 258; Byan v. Dox, 34 N.. Y. 307 ; Eirst Greenl. Ev. secs. 279 and 284; Lockwood v. Canfield, 20 Cal. 126.) , -

By the Court, McKinstry, J: Had defendant Susan M. Hodgdon received the proceeds of the policy of insurance, she could have contracted in respect to them.

Nor can it be doubted, that after the ■ policy was issued, and before the death occurred, she could have assigned the. policy, voluntarily or for a consideration, to the use of the infants. And any act clearly indicating her intention to transfer her interest in the policy would be sufficient to operate (at least) an equitable assignment, although she had retained possession of the policy, and the insurance company had received no notice of the transfer, until after it was actually made. (Bliss on Eife Ins. sec. 330 et seql)

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Dissent — Wallace

Wallace, C. J., dissenting: The policy of insurance issued by the Pacific Mutual Life Insurance Company of California upon the life of Anthony Silvey, ran in terms to the defendant Susan Medora Hodgdon, who was a daughter of the said Anthony, and in whose life she therefore had an interest, which was the lawful subject of insurance. The premium paid upon the issuance of the policy is therein recited to have been paid by the said Susan, who is therein designated as “ the assured under this policy,” and by its terms the insurance thereby effected is declared to be “ for the sole use of said Susan If. Hodgdon,” and payment is to be made to her “ for her sole use, if living, or if not living, to her heirs or legatees, in conformity with the statute,” etc. It is therefore apparent upon the face of the policy that the defendant Susan M. Hodgdon, and no other person, is the “ assured ” therein, and her legal relation to the policy, and the insurance thereby effected, is substantially the same as though she had purchased an endowment policy upon her own life, and had survived the period of time in such policy limited.

This being the true construction of the policy, and the legal import of its terms, neither the oral declarations of Anthony Silvey, nor of the defendant Susan, made after she received the policy, to the effect that it was intended for the benefit of third persons, are admissible to vary that construction. It is not competent, by mere proof of such declarations, to create a trust in favor of such third persons in the proceeds of the policy. To do so by such means would be in effect to materially change the several clauses of the instrument, and to interpolate therein the name of some person other than the one mentioned therein as the “ assured.”

The facts of the case do not, in my judgment, distinguish it in principle from that in Wason v. Coburn, 99 Mass. 312, referred to in the principal opinion. In that case the insurance money had been actually collected by the executor of the assured, who, upon the face of the policy, and irrespective of the parol evidence offered, appeared to be the beneficiary. It docs not seem in that case to have been doubted either by Court or coun[371]sel that the proceeds of the policy must of necessity go to the person who, upon the true construction of the instrument, appeared to be the beneficiary. Accordingly, there was an attempt upon the part of the plaintiff to show that the assured had himself orally declared that the insurance was intended, not for himself, but for the plaintiff’s intestate, and this evidence was offered for the purpose of affecting the construction of this policy, but the Supreme Judicial Court held that such evidence was inadmissible for that purpose, and accordingly gave judgment for the defendant.

I, therefore, dissent from the judgment of my associates.

Niles, J., also dissenting:

I dissent upon the grounds stated in the dissenting opinion of the Chief Justice.

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Synopsis

Opinion

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Dissent — Wallace

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