Lapas attēli

CALLAGHAN, J. On December 28, 1894, the defendant Mutual Life Insurance Company issued a 20-year endowment policy of insurance in the sum of $1,000 on the life of Frederick Fuchs, the plaintiff in this action. The beneficiary named in the policy was the defendant Rebecca E. Fuchs, her executors, administrators, and assigns. The policy was subject to the provisions, requirements, and benefits stated on the back of the policy. We are concerned only in two clauses indorsed on the back of the policy and they are as follows:

"Life Option-Annuity.-At the maturity of the endowment term of this policy, instead of accepting the cash settlement then provided for, the insured may continue this insurance for the full amount without medical examination and without further payment of premium, by exchanging it within thirty days after such maturity for a paid-up policy of life insurance payable at death, participating annually in dividends, and in addition thereto the insured shall be entitled to a paid-up annuity of $40 for life, payments thereon to commence one year after said maturity.

"Dividends.-This policy is issued on the 20-year distribution plan. It will be credited with its distributive share of surplus apportioned at the expiration of 20 years from the date of issue. Only 20-year distribution policies in force at the end of such term, and entitled thereto by year of issue, shall share in such distribution of the surplus; and no other distribution to such policies shall be made at any previous time. All surplus so apportioned may be applied at the end of such period to increase the amounts under the life option and paid-up annuity, pro rata, if previously requested in writing, or may then be drawn in cash."

The policy matured on December 28, 1914. A few days prior to the maturity the plaintiff advised the defendant Mutual Life Insurance Company of his desire to exercise the "life option." The company thereupon duly credited to this policy the sum of $330.33, the earned dividends. It is to recover the amount of the accrued dividends that this action was brought.

The action was originally begun against the Mutual Life Insurance Company, and pursuant to section 27 of the Municipal Court Code defendant Fuchs was brought in as a party defendant. The Mutual Life Insurance Company could not interplead, inasmuch as it had made a loan upon this policy, and therefore was not in a position to pay into court the amount demanded of it. It appears that, about eight years prior to the maturity of the policy, the Mutual Life Insurance Company advanced to the plaintiff upon this policy the sum of $100. The insured and beneficiary signed the agreement for this loan, and upon the trial both the plaintiff and the defendant Fuchs conceded that the insurance company is entitled to deduct the amount of the loan and accrued interest from the amount of the dividend of $330.33.

Let us first consider whether in any event the dividend was payable upon the maturity of the policy or postponed until the death of the insured. The life option clause contained a provision that, in addition to the participation in the annual dividends, the insured shall be entitled to be paid an annuity of $40 for life. It was stipulated upon the trial:


"The amount of annuity payments now past due, if based on $1,000, is $40. * If based on the amount of the policy of $1,000, the dividend addition on $330.33 will be $53.21."

While the phraseology thus employed is somewhat confusing, it was undoubtedly the intention of the parties to stipulate that, in case the insured elected to make the dividend payable upon his death, he would in that event receive an annuity of $53.21; otherwise, he would receive only the annuity of $40. An analysis of these figures discloses that $40 bears the same relation to $53.21 as $1,000 bears to $1,330.33.

[1] It seems plain, therefore, that the insured did not elect, as he might have done, under the "dividends" clause. Had he made his election under that clause to add the surplus to the face of the policy and postpone the payment of the total until his death, his annuity would have been $53.21, instead of $40, which he conceded it to be. The payment of the surplus not having been postponed by the insured, it necessarily follows that it is now subject to be withdrawn in cash. The question then arises, By whom?

[2] Under the "dividends" clause the policy is credited with a distributive share of the surplus at the expiration of the 20-year period. When this is done, the surplus becomes so intermingled with the amount represented on the face of the policy as to be incapable of division, and the value of the total is $1,330.33. The surplus, equally with the $1,000, is a part of such total value. The principal sum and the dividends do not differ from the other in character or quality. Each was the result of the policy of insurance, and each represented a portion of the value thereof. This being so, the primary object of the contract must be considered in order to determine to whom the total sum is payable. It was undoubtedly the object of the insured to benefit the wife, and any uncertainty in the provisions of the contract must be resolved so as to sustain such purpose. The parties concede that the conditions in the policy reserved no right in the insured to appropriate to himself the $1,000; certainly no express power is given to him to appropriate the surplus fund of $330.33. In the absence of such express power, the court will not strain itself to imply such authority in derogation of the primary purpose of the contract. There is nothing in this contract which justifies an implied right in the insured to receive this surplus. The only right reserved to him in relation to the surplus is found in the "life option" clause. He may, pursuant to the provisions of that clause, change the original policy for paid-up life insurance, which may participate in the dividend, and which secures to him a life annuity. His rights are expressed; no room is left for implication. The dividend clause confers upon him only the right to postpone the payment of the surplus by applying it for the purpose therein expressed. It certainly confers no right to appropriate it.

[3] The plaintiff had power and did postpone the payment of $1,000. He had the power to postpone the payment of the balance until his death. Not having done so, and having no express power to appropriate to his own use, the logical inference is, I take it, that he intended, and so elected, that this portion of the total fund should be immediately payable to the beneficiary. To state the proposition conversely, if the insured had failed to exercise the option at all, the

total fund would have been payable to the wife at the expiration of the 20-year period. He, however, only partially exercised the option, so as to postpone the payment of $1,000. This left the remaining portion of the fund unaffected by the option and in the same position that it was before; i. e., payable to the wife immediately, in the absence of power to appropriate it for himself, and, as shown, he had no such power. It follows that the wife is entitled to the surplus, less the amount of the loan.

[4] A suggestion has been made that the plaintiff is entitled to recover as the trustee of an expressed trust. There is no doubt that he is such, under the provisions of section 449 of the Code of Civil Procedure, and therefore entitled to bring this action (Kerr v. Union Mutual Life Insurance Company, 69 Hun, 393, 23 N. Y. Supp. 619), and to recover as against the insurance company, had the defendant Fuchs not been vouched in as a party defendant by the insurance company. She having appeared and answered, demanding affirmative relief as against the plaintiff and the defendant insurance company, the reason for allowing a recovery by a trustee disappears, and it would be a waste of time to allow a recovery by the plaintiff as against the defendant Fuchs, and leave her an accounting against the plaintiff.

[5, 6] It appears that the defendant Fuchs was made a party here by order of the court upon the application of the defendant Mutual Life Insurance Company. The court had power to make such an order, expressly given by section 27 of the Municipal Court Code. The question then arises as to whether or not the Municipal Court has power to grant a judgment in favor of one defendant and against another defendant. It seems that it was the intention of the Legislature that all controversies between all the parties to the action should be settled, if possible, in that action, and, with that in view, the intention was to extend the power to render judgment in favor of one defendant against the other.

The facts are conceded. Nothing can be gained by a new trial. I therefore advise that the judgment in favor of the plaintiff and against the defendant Rebecca E. Fuchs be reversed, and that judgment be directed in her favor for $218.59 (being the surplus of $330.33, less the amount of the loan of $111.74), against the defendant Mutual Life Insurance Company, without costs of this appeal or in the Municipal Court; that the judgment in favor of the plaintiff and against defendant Mutual Life Insurance Company be reduced to $42.01 (being the annuity of $40 and $2.01, the accrued dividend thereon), and, as so modified, affirmed, without costs of the appeal, but with appropriate costs in the Municipal Court.

CLARK, J. (concurring). Whatever equitable questions might have arisen in the Municipal Court, requiring an accounting outside of the jurisdiction of that court, were eliminated by the stipulation there made, which, by adjusting all figures, dispensed with the need of an accounting.

BENEDICT, J. (dissenting in part). I concur in the proposition that the surplus credited to the policy in question does not belong to

the insured, the husband, but does belong to the wife, who is the beneficiary of the policy. Indeed, it seems impossible to construe the policy in any other way without wresting its words from their plain meaning. The policy must be read in its entirety, and when so read its clear intent is shown to be that the beneficiary, and not the insured, is entitled to the surplus in question as a "benefit" in addition to the endowment. The insured had no power over the endowment or surplus, other than that expressly given to him by the terms of the policy. He could not assign or transfer it without the consent of the beneficiary. Ferdon et al. v. Canfield, 104 N. Y. 143, 10 N. E. 146. Nor could he surrender the policy and take the value thereof without her consent. Barry v. Mut. L. Ins. Co., 49 How. Prac. 504; People v. Globe Mut. L. Ins. Co., 15 Abb. N. C. 75, affirmed 96 N. Y. 675.

But, assuming all this, can it be said that the judgment appealed from should be reversed? I think not. I think that the insured had a right to maintain the action without joining his wife, the beneficiary, and to recover the surplus when it became ascertained and was payable. He had this right because he was the trustee of an express trust for the benefit of his wife. His receipt for the money would discharge the insurance company. This principle is well established by the adjudged cases. People v. Globe Mut. Life Ins. Co., supra; Kerr v. Union Mutual Life Insurance Co., 69 Hun, 393, 23 N. Y. Supp. 619; Hunt v. Provident Savings Life Assur. Co., 77 App. Div. 338, 342, 79 N. Y. Supp. 74, per Hatch, J. If this be so, the plaintiff was entitled to recover the fund, title in law to which was vested in him. The wife has only an equitable interest. She must assert such interest in a court possessing equitable jurisdiction. The Municipal Court is not such a court. The fact that it made an order bringing her into the action as a defendant cannot operate to enlarge its jurisdiction. She was not, in any sense, a necessary party to the action. Roberts v. N. Y. El. Ry. Co., 155 N. Y. 31, 38, 49 N. E. 262; Carey v. Brown, 92 U. S. 171, 23 L. Ed. 469.

The position of the parties requires that the suit be brought by the husband, and I think the judgment in favor of the plaintiff should be affirmed, but solely upon the ground last above stated. This result will leave unaffected the equitable rights of both parties in the fund, to be determined upon a proper accounting in a court competent to grant equitable relief.


(Supreme Court, Appellate Term, First Department. April 4, 1917.) CARRIERS 413(1)-SLEEPING CAR COMPANIES-PASSENGERS-BAGGAGE-LIA


A sleeping car company is under a duty to exercise the same degree of reasonable care and watchfulness over the personal effects of a passenger and is equally liable for the loss thereof while he is asleep during the daytime as when he is asleep at night.

[Ed. Note. For other cases, see Carriers, Cent. Dig. §§ 1583, 1585, 1588.] Appeal from Municipal Court, Borough of Manhattan, Ninth District.

Action by Bernard Robbins against the Pullman Company. Judgment for defendant, and plaintiff appeals. Reversed, and new trial granted.

Argued March term, 1917, before BIJUR, HENDRICK, and WEEKS, JJ.

Meier Steinbrink, of Brooklyn (Hunter L. Delatour, of Brooklyn, of counsel), for appellant.

Alexander & Green, of New York City (Clifton P. Williamson, of New York City, of counsel), for respondent.

BIJUR, J. No contested questions of fact are involved in this case. Plaintiff was a passenger on one of defendant's sleeping cars on a train from Chicago to Montreal. The train left Chicago in the evening. The plaintiff slept in his berth during the following night, and on the succeeding day (the train being due to arrive at Montreal at 6:15 p. m.) plaintiff, who happened to be the only passenger in the car, shortly after lunch, fell asleep sitting up in the section, which had then been made up for day use. When he awoke, his hand satchel or grip was missing. When he boarded the car he testifies that he handed the bag to the porter, but I do not attach any importance to that circumstance, since the plaintiff testifies that he used his grip during the trip in the way usual to a traveler. Defendant offered no evidence.

Under these circumstances, I do not see how this case can be distinguished from the long line of cases ending with Goldstein v. Pullman Co., 161 App. Div. 756, 147 N. Y. Supp. 133. It is true that in that case, and in many others, the loss occurred during the night when the passenger had actually retired into the berth made up as a sleeping compartment. While it may be that during the nighttime, when most, if not all, the passengers are asleep, a greater degree of vigilance on the part of the porter or other employés of the company can properly be demanded and is manifestly more feasible, still it is a matter of common knowledge that in the use of the sort of accommodation offered by the defendant there are constant occasions during the daytime when the passenger is necessarily absent from his berth and engaged in availing of the many conveniences for travel which are the usual concomitants of a journey of any extent. Under those circumstances, and at such times, it would be altogether unreasonable to expect the passen

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