APPEAL from the Circuit Court of Peoria County; the Hon.
ALBERT PUCCI, Judge, presiding.
MR. JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 22, 1979.
This is an appeal from a summary judgment entered by the circuit court of Peoria County.
On November 29, 1973, Marilee A. Brunnenmeyer (hereinafter known as Marilee) and Jack A. Brunnenmeyer (hereinafter known as Brunnenmeyer) were divorced. The divorce decree ordered that the parties perform "each and every provisions of the written agreement approved by this Court." The agreement recited that it was "in consideration of the mutual promises and other good and valuable consideration hereto expressed." It further provided that:
"The Husband shall keep in full force and effect life insurance policies on the Husband's life in the minimum net amount of ONE HUNDRED THOUSAND ($100,000.00) DOLLARS, and will maintain the parties' minor children as beneficiaries until such time as the youngest child attains the age of eighteen (18) years, at which time it is agreed by and between the parties hereto said Husband is free to do with said policies as he wishes. The policy herein referred to is Policy No. 4,049,570 3,881,978 3,755,821, and 3,751,874 with the Massachusetts Life Insurance Co."
The agreement also provided that Brunnenmeyer would pay for the college educations of the minor children.
The minor children of the parties were Eric, born July 2, 1960, and Heidi, born October 4, 1962. Both children were under the age of eighteen at the time of Brunnenmeyer's death.
Brunnenmeyer had purchased the policies during the years 1962 and 1964. All initially designated Marilee as primary beneficiary with the minor children as secondary beneficiaries. On March 28, 1975, the beneficiaries on the policies were changed to the minor children as primary beneficiaries with Brunnenmeyer's second wife, Chloe Brunnenmeyer (hereinafter known as Chloe), as secondary beneficiary. On February 28, 1977, a further change of beneficiary was executed designating Chloe and the First National Bank of Peoria, trustee (of a trust for the benefit of the minor children), as beneficiaries.
During 1976 Brunnenmeyer developed terminal cancer. He took loans on the policies so that the proceeds at his death on March 29, 1977, were $76,065.79, considerably less than the fact amount of $100,000 required by the decree.
On June 2, 1977, Chloe and the First National Bank of Peoria filed suit against Massachusetts Mutual Life Insurance Co. to obtain the proceeds of the policies. Massachusetts Mutual filed a counterclaim to interplead and joined as third-party defendants Eric, Heidi, and Marilee Brunnenmeyer. Eric and Heidi, through their mother, had made a formal claim to the money on May 3, 1977.
All the parties filed motions for summary judgment. The court granted the motion of Massachusetts Mutual and took the other motions under advisement. The motion of Chloe and the First National Bank was later granted and a judgment order was entered without the knowledge of Marilee. The entire proceeds of the insurance policies were paid to the clerk of the circuit court who, on the same day and without the knowledge of Marilee, paid the entire proceeds to Chloe and the First National Bank. A motion to reconsider filed by Marilee was denied. A petition for stay of enforcement pending appeal filed by Marilee was also denied.
Marilee raises two issues on appeal: (1) the trial court erred in awarding the proceeds of life insurance policies to named beneficiaries changed in violation of the terms of a property settlement agreement which was incorporated into a divorce decree; (2) the third-party defendants-appellants were entitled to apply for a stay of enforcement pending appeal.
1 It is the general rule in the State of Illinois that an insured may change the beneficiary of his life insurance policy if that right is reserved to him. (Aetna Life Insurance Co. v. Patton (S.D. Ill. 1959), 176 F. Supp. 368.) It is also the general rule that the beneficiary of a life insurance policy has no vested right to the proceeds of the policy before the death of the insured; he has a mere expectation subject to revocation. (Davis v. Metropolitan Life Insurance Co. (1936), 285 Ill. App. 398, 2 N.E.2d 141; Cook v. Pullman Co. (1944), 321 Ill. App. 302, 53 N.E.2d 55.) A beneficiary may, however, acquire a vested interest in the proceeds of the life insurance policy if he gives valuable consideration in return for the promise of the insured that the insured will name him beneficiary. (Gillham v. Estes (1910), 158 Ill. App. 211; Nell v. Nell (1924), 234 Ill. App. 164; Columbian Circle v. Mudra (1921), 298 Ill. 599; Sun Life Assurance Co. of Canada v. Hoy (E.D. Ill. 1959), 174 F. Supp. 859.) The beneficiary named as a result of such an agreement has an equitable right which will be enforced as against any other named beneficiary except one who has a superior equitable right. Sun Life v. Hoy.
2 In the instant case, the insured Brunnenmeyer, as part of a property settlement agreement which had been incorporated into a divorce decree, agreed to name his minor children as beneficiaries of his life insurance policy. Later, in violation of that agreement, he changed the beneficiary so that the proceeds from the policy were divided between his second wife, Chloe, and a trust for the benefit of his minor children. We ...