Deal v. Hainley

• Decision Date: 09 February 1909
• Citation: 116 S.W. 1,135 Mo. App. 507
• Parties: DEAL v. HAINLEY.
• Court: Missouri Court of Appeals

116 S.W. 1

135 Mo. App. 507

DEAL v. HAINLEY.

St. Louis Court of Appeals. Missouri.

February 9, 1909.

1. WITNESSES (§ 159) — COMPETENCY — TRANSACTIONS WITH DECEDENTS.

Under Rev. St. 1899, § 4652 (Ann. St. 1906, p. 2520), relating to the disqualification of witnesses as to transactions with decedents, a beneficiary in an insurance policy was incompetent as a witness to testify as to the arrangement between himself and insured by which insured made the policy payable to him.

2. INSURANCE (§ 116) — INSURABLE INTEREST.

A person has no insurable interest in the life of his half-uncle, other than such as he might have as an ordinary creditor.

3. INSURANCE (§ 114) — BENEFICIARIES — WHO MAY BE.

A person may insure his life for the benefit of one who has no insurable interest therein, if he does so in good faith to promote the beneficiary's welfare, and not in a collusive manner, which would be equivalent to the beneficiary procuring the insurance.

4. INSURANCE (§ 119) — INSURABLE INTEREST — SPECULATIVE TRANSACTIONS.

Where a person insures his life on the inducement of the beneficiary in the policy, who has no insurable interest in insured's life, and who is the active and moving party in the transaction, the policy is speculative, and entitles the beneficiary to keep no more of the proceeds of the policy than may be necessary to satisfy demands which he may have against insured's estate.

5. INSURANCE (§ 591) — RIGHTS OF BENEFICIARY.

Where a person insured his life for the benefit of a creditor, who has no insurable interest therein other than such as he may have for the payment of his claims, which insurance is procured by the insured himself, but with an understanding with the beneficiary that the latter's interest in it shall be only as security for what insured owes the beneficiary, the beneficiary can retain only enough of the proceeds to make him whole.

6. INSURANCE (§ 668) — QUESTIONS FOR JURY.

Whether the beneficiary in an insurance policy, who had no insurable interest in insured's life, used insured to obtain the insurance, which he himself could not have done, or insured procured it on his own volition, and for the exclusive benefit of the beneficiary, or for his benefit by way of indemnity, held, under the evidence, for the jury.

7. INSURANCE (§ 122) — POLICY — ASSIGNMENT.

The assignment of an insurance policy to one having no interest in the life of the insured is invalid, unless made to a creditor, and then it is valid only to the amount of his advances.

Appeal from Circuit Court, Mississippi County; Henry C. Riley, Judge.

Action by E. P. Deal, as public administrator of the estate of Andrew J. Coleman, deceased, against Charles W. Hainley, for money collected and wrongfully withheld on policy of life insurance. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

Plaintiff is public administrator of Mississippi county and in charge of the estate of Andrew J. Coleman, deceased. He instituted this action to recover from defendant the proceeds, less certain credits, of an insurance policy written for the sum of $2,500 on the life of the deceased for the benefit of defendant. The main averments are that Coleman was in debt to defendant in the sum of $400, and the policy was issued to the latter as security for said debt, defendant paying a premium of $106.55; that the only interest defendant had in the life of the deceased or in the policy was as creditor and for the premium paid; that defendant had collected the whole sum due on the policy, but was entitled to retain only $506.55, to reimburse him for what deceased owed him and the premium paid; but that he had withheld the remainder of $1,993.45, for which plaintiff prayed judgment. The answer admitted the capacity in which plaintiff sued, issuance of the policy on the life of the deceased to defendant, and collection of the proceeds by the latter; admitted Coleman was indebted to defendant in the sum of $506.55, but denied this represented his total indebtedness to defendant, and denied plaintiff was entitled as administrator to any part of the proceeds of the policy. For further answer, it was alleged the policy was issued on the application of Coleman and made payable to defendant; that defendant was Coleman's nephew and intimate friend, and for a long time prior to the date of the policy, and afterwards until the death of Coleman, had at divers times lent the latter money, signed his notes as surety in the banks and to private individuals, and given him pecuniary aid when he needed it; that Coleman, out of gratitude and to reimburse defendant for the aforesaid favors, procured said policy on his life in the interest of defendant, who was named as beneficiary; and that in doing so Coleman acted in good faith and without intention to evade the law or defraud any one, fully believing he was within his legal rights; that defendant acted in good faith throughout the transaction, and in making proof of Coleman's death and collecting the amount of the policy. A general denial was filed in reply to the answer. Hainley was a half-nephew of Coleman, and the two were good friends. Witnesses said defendant, being a man of some means and of generous nature, was disposed to aid his relatives financially on occasions. He signed Coleman's notes as surety several times, but it is conceded there was no evidence he ever paid any of these debts except one to a man named Chapman. The amount of this debt is in dispute, plaintiff claiming it was about $175 and defendant that it was $300. The administrator stated the reason the petition alleged Coleman owed defendant $400 was because the administrator knew there was something owing and did not know the exact amount. Coleman himself applied for the policy in a writing signed by him, which contained, among other statements, the following:

"9. The full name of the person to whom the insurance is payable is Charles W. Hainley.

"10. Residing in Charleston, Missouri.

"11. The relationship of said beneficiary to me is nephew.

"12. The insurable interest of the said beneficiary in the life proposed for insurance other than that of family relationship, is protection as creditor.

"13. I hereby apply for insurance on my life on the life plan L, years' payments, 20 years distribution."

Defendant testified he was nephew and friend of Coleman; that the latter was frequently in need of small sums of money, and defendant assisted him to borrow from the banks and individuals. Regarding the taking of the policy, defendant testified the agent of the insurance company wanted to insure defendant's life, and the latter said he had all the insurance he wanted. The agent then asked if he did not have some kinfolks he could carry insurance on, and defendant said he had. This question and the answer to it next follow:

"Q. And you took out this policy and paid the premium on it? A. On Mr. Coleman's accord, he was willing for it; I didn't ask him anything about it; I didn't go to see him."

Defendant swore further the agent went to Coleman, and defendant did not give Coleman notice to take out the policy, but signed his note for the premium and told Coleman he (defendant) "would stay with him" as long as possible in order to keep the policy up. Coleman took out another policy payable to his wife, and Hainley became his surety for the payment of the premiums, but Coleman paid them. Plaintiff's counsel objected to the competency of defendant as a witness, and saved an exception to the adverse ruling on the exception. The policy whose proceeds are in dispute was written by the Mutual Life Insurance Company of New York, and contained a promise to pay "Charles W. Hainley, nephew of Andrew J. Coleman, the insured, of near Charleston, in the county of Mississippi, state of Missouri, if living, if not the said insured's executors, administrators or assigns, $2,500, upon acceptance of satisfactory proof at its head office of the death of Andrew J. Coleman," etc. It was dated November 24, 1904. The annual premium was $106.55, which was paid by defendant for the first...