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Page:Harvard Law Review Volume 2.djvu/257

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RECENT CASES.

239

License, by Pakol — Equttablb Estoppel.— -A parol license to lay an aqueduct to a spring on the licensor's land is irrerocable alter the aqueduct is constructed and during its continuance; and a court of equity will protect such license by injunction. Clark v. Glidden^ ic Atl. Rep. 358 (Vt.).

That a license to do an act on licensor^ land, though acted upon, is revocable, wttFootv, N, If. Ed. N. Co. et ai., 23 G>nn. 214; Morse v. Copeland^ 2 Gray, 302.

Life Insurance — Rights of BsNEnaARiES. — A man describing himseH as trustee for his children, insured bis life for their benefit. He failed to pay the 1 6th annual premium, but shortly after it became due surrendered the policy to the company, which thereupon issued a new policy for the same amount and for the same annual premium, but payable to his second wife. The consideration of the new policy was the surrender value of the old. /Teld, that the old policy never lapsed, but was continued by the new, so that the children were entitled to the insurance. Garmr v. Germama Lift Ins. Co.^ 18 N. E. Rep. 130 (N. Y.).

The court seemed influenced by the fact that the father declared himself a trustee, although it is not unUkely that the same conclusion would have been reached if the contrary had been true. Whether or not there could be a trust, depends upon the view which one takes as to the nature of the contract. If the beneficiaries have the sole legal right under the promise, — and such seems to be law, — then the father has absolutely nothing as the res to which a trust can attach. On the other hand, if the father has the sole legal right, there seems no technical difficulty in the way of his declaring himself a trustee, although the cesiuis are already the legal benefi6iaries. On either view there seem difficulties in the way of reaching the conclusion of the court.

(i.) Suppose the beneficiaries have the sole legal right Then there is no trust. It follows that the father cannot make a valid release or surrender. Therefore the only defence left for the company is a breach of condition, unless the breach has been waived. Now, an ordinary life policy is a unilateral promise in considera- tion of a certain sum paid down to pay a certain sum to designated persons on the death of the insured, subject to the condition precedent that the insured pay annual premiums on fixed dates. New York Life Ins. Co. v. Statham^ 93 U. S. 24. But see contra^ Worthingtan v. Ins, Co.^ 41 Conn. 372; Fkanix Ins. Co. V. Sheridan^ 8 H. L. C. 745; and Strong, J., in New York Life Ins. Co. v. Statham, It is clear that either payment on the day named, or payment altogether, may be waived by the company. Here there was a breach by the non-payment on the 1 6th annual premium on the day named. The company could, therefore, on the next day treat the policy as utterly null and valueless; but instead of so doing they issued, a few days thereafter, a new policy in consideration of the sur- render of the old. Their attitude, therefore, precluded them from insisting that the old policy became void by breach of condition. Thus there was a waiver; yet it is hardly fair to say that there was more than a waiver of paynient on a fixed day, not of payment altogether. Now it appears to be law — and it was so stated in this case — that the beneficiaries, as well jis the insured, may perform the condition by paying the premiums. Accordingly the children, when they learned of the breach, must pay all premiums in arrear, and all future premiums when due, in order that there shall be no further breach of condition than that which the company has waived. The result, then, of the first view mentioned above is that the old policy continues unaffected by the surrender, and that the children may recover the full amount of insurance, if they have made the pay- ments just indicated. The existence of a second policy, which ma^ or may not be good, strictly has nothing to do with the case, although it is not, from a practical point of view, altogether a satisfactory oondusioii that there should be two policies; yet perhaps it is no more unsatisfactory than the conclusion reached by the court, which certainly violates the intention of the parties.

(2.) Suppose the father has the legal right, on which he has declared a trust Then he commits a breach of trust in converting the old policy into a new one. He ought, therefore, to hold his interest in the latter, subject to a constructive trust for the defrauded cestuis; and the new beneficiary, being a donee, ought to hold any proceeds of the policy also under a constructive trust. The extent of that trust will be measured by the surrender value of the old policy. Even if the father has declared no trust, he is under a duty to exercise the right vested in him in behalf of the beneficiaries so far as may be necessary to protect them; and clearly he commits a breach of that duty in the nature of a tort when he