Alexander v. Griffith Brokerage Co.

• Decision Date: 11 June 1934
• Citation: 73 S.W.2d 418,228 Mo.App. 773
• Parties: HERMA ALEXANDER, EXECUTRIX, ETC., RESPONDENT, v. GRIFFITH BROKERAGE COMPANY, APPELLANT
• Court: Kansas Court of Appeals

73 S.W.2d 418

228 Mo.App. 773

HERMA ALEXANDER, EXECUTRIX, ETC., RESPONDENT, v. GRIFFITH BROKERAGE COMPANY, APPELLANT

Court of Appeals of Missouri, Kansas City

June 11, 1934

Appeal from Circuit Court of Jackson County.--Hon. John R. James Judge.

Reversed and remanded. (with directions).

Winger Reeder, Barker & Hazard for respondent.

L. L Watts and Watson, Ess, Groner, Barnett & Whittaker for appellant.

OPINION

TRIMBLE, J.

The action herein is one brought by the widow and executrix of the last will and testament of Spencer A. Alexander, deceased, against the defendant to obtain an accounting of money collected by it on a policy of insurance issued on the life of said deceased by the Guardian Life Insurance Company of America taken out by defendant while deceased was in its employ as manager of its branch office in Kansas City, Missouri.

Defendant is a Kansas corporation authorized to do business in Missouri, having offices at Wichita, Oklahoma City and Kansas City, Missouri, and doing a general brokerage business in the field of grocery merchandising; that is, it represents various food manufacturers in different parts of the country as their broker in selling groceries for their account, to different wholesale dealers, being paid commissions on all sales made.

Each branch office is in charge of a manager who operates it as an independent unit of the business. In November, 1929, during the lifetime of said Spencer A. Alexander, he was employed by defendant as its manager of the Kansas City branch, and on November 27, 1929, application, signed by both Alexander and the defendant Griffin Brokerage Company, was made to the above named insurance company for a policy of $ 5000 on the life of said Alexander, age thirty-seven years, with an "interim term premium" of $ 17.25 falling due on April 15th and the annual premium (of $ 140.20) falling due annually thereafter. Defendant was to be the beneficiary (without the right of revocation) therein; and, in an amendment to the application, Alexander agreed to "accept the policy issued;" and in a statement supplementary to said application, signed by both Alexander and the Brokerage Company, defendant Griffith Brokerage Company stated that "The applicant is connected with said beneficiary in the capacity of manager, and by reason of such connection said beneficiary has a pecuniary insurable interest in the continuance of the applicant's life," and it was also agreed therein "that if a policy be issued on such application to said applicant (in said policy referred to as the insured), said beneficiary (in said policy referred to as the owner), shall be entitled to receive any dividends declared on such policy and any cash surrender value or loan value or value in paid-up insurance which may be granted thereunder, and generally to exercise every option and enjoy every privilege and benefit under the terms of such policy without the consent of the insured," etc.

The contract or policy stated that "The Guardian Life Insurance Company of America agrees to pay the sum of Five Thousand Dollars on receipt at the Home Office of the Company of due proof of the death of Spencer A. Alexander (herein called the Insured) to the Griffith Brokerage Company, a corporation organized under the laws of the State of Kansas, its successors or assigns, herein called the Owner." The policy further stated that:

"This contract is made in consideration of premiums as follows:

"First premium of $ 17.25 payable on delivery hereof, being charge for initial term insurance to April 15, 1930, the date when the first regular policy year hereunder will begin; and further premiums of $ 140.20 payable on said date and every twelve calendar months thereafter during the continuance of this policy until the death of the Insured."

One other policy for $ 5000 was issued at the same time, having the same purpose, terms and conditions, except that its "regular policy year" for the payment of premiums, ran from February 15, 1930, instead of from April 15, 1930, as provided in the first policy mentioned, the proceeds of which are now involved in this suit.

The premiums on both these policies, as well as all other expenses incident thereto, were paid by the Griffith Brokerage Company. Alexander did not pay, nor was he obligated personally to pay, any part of the premiums or expenses connected with the obtaining or carrying of these policies.

In February, 1932, Alexander was discharged from his position as manager, by defendant Griffith Brokerage Company and when the premium on said other policy fell due on February 15, 1932, it was not paid, but defendant surrendered that policy to the insurance company for its cash surrender value, presumably because Alexander was no longer employed by defendant. The premiums on the policy, the proceeds of which are in suit, had already been paid and, by reason thereof, that policy was in force to April 15, 1932, and nothing was necessary to be done about it.

On April 12, 1932, or three days before the premium on it fell due, Alexander died by his own hand. The remaining policy still being in force, defendant as beneficiary made due proof of death and the insurance company paid the sum of $ 5000 and that sum was credited to the profit and loss account of the Kansas City Branch of which Alexander had been the manager.

The defendant Griffith Brokerage Company kept a "loan account" separate from the employees' salary and expense account; and from this, defendant from time to time made loans to its various employees, including its manager, to be repaid either from their pay or from them individually. Sometimes the account would show a balance in favor of the employee and again it would show, on account of loans made, a balance in favor of the company; interest on their balances would be charged against whomever the balance was against.

On November 26, 1929, defendant collected similar business insurance on a policy held by it on the life of Ronayne, Alexander's predecessor as Kansas City manager, Ronayne having died. The Wichita office received half of said insurance (pursuant to a special agreement) and the other half was credited to the profit and loss account of the Kansas City Branch and divided among the Kansas City employees. On November 29, 1929, Alexander obtained an advance loan of $ 1000 from the company, and on December 31, 1929, his loan account was credited with his proportionate share of the Ronayne insurance and at that time he received from the company as a further credit on his account the sum of $ 978.08 as his percentage of the earnings of the Kansas City Branch for the year 1929. From and after December 3, 1929, Alexander's account was credited with various sums and he was charged with various additional loans, so that at the time he was discharged in February, 1932, though his salary and expense account was square, his loan account showed an indebtedness of $ 1842.69 on which the company was charging him six per cent interest and continued to so charge him up to the time of his death, April 12, 1932. On May 16, 1932, defendant filed in the Probate Court of Jackson County, Missouri, its claim against his estate for said indebtedness; and on June 27, 1932, said probate court allowed the claim, with interest, amounting in all to $ 1874.82. The estate appealed to the circuit court where the probate court judgment was affirmed, and became final, as no further appeal was taken. It will be observed that at the time one of the policies was issued, Alexander's loan account showed an indebtedness to the company of $ 1000 although by reason of profits and by reason of his share of the Ronayne insurance not at that time entered on the books, the company was in fact indebted to Alexander when the insurance was issued though afterward and at the time he died, Alexander was indebted to the company.

The case was submitted on plaintiff's third amended petition, which, after alleging Alexander's death on April 12, 1932, stated that plaintiff was his executrix, and set forth the organization, status and authority of defendant to do business in this State, and went on to state that said Spencer A. Alexander was on or about the--day of November, 1929, employed by defendant in the capacity of a salesman in the Kansas City branch office and continued in the employ of said defendant in such capacity until February 13, 1932, when he was discharged;

That at or about the time said Alexander was employed, he became indebted to defendant in the sum of $ 1000, and thereafter--

"At various times during the term of said employment, the dates of which are unknown to plaintiff, said Spencer A. Alexander became indebted to defendant in further sums, and paid certain amounts and became entitled to certain credits, in form of commissions, bonuses, etc., on account of his said indebtedness to defendant, the amounts of all of which said further indebtedness, and said payments and credits, are unknown to plaintiff;"

That--

"At or about the time said Spencer A. Alexander was employed by defendant and became indebted to defendant in the initial sum of $ 1,000 as aforesaid, the defendant, with the consent of said Spencer A. Alexander, applied for and obtained from The Guardian Life Insurance Company of America, a policy of insurance upon the life of Spencer A. Alexander in the amount of five thousand dollars ($ 5,000) payable to defendant as the beneficiary named therein, whereby the defendant pretended to insure itself against the loss of a purported interest in the continuance of the life of said Spencer A Alexander in the capacity of manager of defendant's branch office at Kansas City."

That--

"Spencer A. Alexander was not in fact the manager of defendant's business,...