Dunnavant v. Mountain States Life Ins. Co.

• Decision Date: 06 February 1934
• Docket Number: No. 22746.,22746.
• Parties: DUNNAVANT v. MOUNTAIN STATES LIFE INS. CO.
• Court: Missouri Court of Appeals

67 S.W.2d 785

DUNNAVANT v. MOUNTAIN STATES LIFE INS. CO.

No. 22746.

St. Louis Court of Appeals. Missouri.

February 6, 1934.

As Modified on Denial of Rehearing February 21, 1934.

Appeal from St. Louis Circuit Court; M. Hartman, Judge.

"Not to be published in State Reports."

Action by Mary W. Dunnavant against the Mountain States Life Insurance Company. From a judgment of nonsuit, plaintiff appeals.

Affirmed.

John P. Griffin and Benjamin Wolf, both of St. Louis, for appellant.

Jones, Hocker, Sullivan, Gladney & Reeder, James C. Jones, Jr., and Warren F. Drescher, Jr., all of St. Louis, for respondent.

BENNICK, Commissioner.

This is an action in two counts upon two policies of life insurance. Plaintiff, the widow of the insured, has sued as the beneficiary designated in the policies at the time of their issuance; and the defense was put upon the ground of a change of beneficiary and subsequent cancellation of the policies. At the conclusion of all the evidence plaintiff was forced to take an involuntary nonsuit; and upon the refusal of the court to set the same aside, she has duly perfected her appeal to this court.

There is no dispute about the basic or ultimate facts of the case, most of which are either actually or in legal effect admitted upon the face of the pleadings. Rather the controversy between the parties goes to the question of the legality of what was done, or else the motives which prompted the parties in the doing of it.

On June 19, 1922, the two policies in suit, each for the face value of $1,000, were issued to plaintiff's husband, Robert P. Dunnavant, by the Liberty National Life Insurance Company, with its home office at Cape Girardeau, Mo. Each application was signed by the insured, and recited that the policy was for the benefit of Mary W. Dunnavant, his wife; and upon the issuance of the policies she was designated in both as the beneficiary.

Thereafter the Liberty National Life Insurance Company merged with the Mountain States Life Insurance Company of Denver, Colo., the defendant herein; and on August 18, 1924, defendant executed riders to be attached to the policies, assuming all liability thereunder.

In each policy the right to change the beneficiary was reserved to the insured under the following provision: "The insured may change the beneficiary from the beneficiary named herein to anyone having a legal insurable interest in his life, by written request accompanied by this policy for endorsement thereon and the written request of the former beneficiary if required by law. Such change shall take effect when endorsed on the policy by the company, and shall be subject to all rights conferred by the previous assignment, if any."

Premiums were thereafter paid on the policies; plaintiff's own testimony being that she herself paid all premiums out of money which she earned by her labors, and that her husband himself had paid none of the premiums. Her evidence was further that the policies, when issued, were delivered to her at her home at 1406 Buchanan street in the city of St. Louis, where she was living with her husband; that she thereafter retained the policies, and had them in her possession at the time of the death of the insured; that she paid each quarterly premium upon receipt of notice from the company; and that the last premium paid by her was on September 15, 1924. When the time came for the next notice to arrive and none was received, plaintiff went to defendant's St. Louis office and tendered payment of the usual quarterly premium, but defendant refused to accept the same, advising plaintiff that the policies had meanwhile been canceled. This was the first information plaintiff had of any claim or contention that the policies were no longer in full force and effect.

As a matter of fact, all was evidently not entirely well in the Dunnavant household, though plaintiff did testify that there had been no family differences either between her and her husband or between her and her stepchildren. Incidentally plaintiff was the insured's second wife, and there were children by both marriages.

The evidence for plaintiff discloses that the insured had not been employed for four years prior to the taking out of the policies, though about the time of their issuance he secured work with a stove company, and continued in its employ for some three or four months until a tubercular condition developed which forced him to cease all activities. In the spring of 1923 he entered Koch Hospital, where he remained until the following June, when he left the hospital and returned to his home. After a short time at home he left St. Louis and went to Imlay City, Mich., where he made his home with a niece for approximately a year.

It was on August 16, 1923, while he was living in Michigan, that the insured, by a letter to the Liberty National Life Insurance Company, requested a change of beneficiary over to his estate, giving as his reason the ill treatment which he and his children were receiving from plaintiff. Seemingly his purpose was to see that there would be a fund available to take care of his funeral expenses and to safeguard the interests of his children. However, there is no evidence of any action taken by the company in response to the insured's letter; the delay being probably due to the confusion attending the merger of the Liberty National Life Insurance Company with defendant at about that time.

In the fall of 1924 the insured returned to St. Louis and shortly thereafter entered the City Hospital from whence, after a couple of months, he was again transferred to Koch Hospital, where he remained until his death on October 9, 1925. The evidence discloses that while he was in the hospital his breathing was difficult, and his weakness was such that he could scarcely speak above a whisper. However, there is not a hint in the record that his mental faculties were in any wise impaired so that he did not appreciate the consequences of everything that he did.

In November, 1924, one Gaylord, an agent of defendant, who had learned from the insured's son that the insured was in the hospital, called upon the insured in company with the son relative to the status of the insurance. An older daughter and her husband, Mr. and Mrs. Samuel Thomas, were present in the room also. Evidently Gaylord's call was in response to the insured's letter from Michigan to the Liberty National Life Insurance Company, for he at once inquired of the insured why he had requested a change of beneficiary. According to the testimony of the son, Gaylord was also seeking a release of the company's liability under the policies, and stated to the insured that if an agreement for the release was not obtained the matter would be taken into court.

Nothing was definitely accomplished on this occasion, but on November 17, 1924, upon printed forms of defendant, the insured made a formal request for a change of beneficiary over to his estate. On the following day, before a notary public stationed in the hospital, he made an affidavit to the effect that his policies were lost; that after a thorough and diligent search he had been unable to locate them; and that the affidavit was being made for the purpose of having duplicate policies issued.

Plaintiff argues that Gaylord knew at the time that the affidavit was made that its contents were false and that the policies were in plaintiff's possession, but the record does not affirmatively disclose any such knowledge on his part. However, there is no contention that the change of beneficiary was indorsed upon the policies, and in fact it is conceded that no such indorsement was made. Neither were duplicate policies issued by the company; the reason undoubtedly being that on November 25, 1924, one week after the making of the affidavit, the insured, by a written instrument likewise executed before a notary public, released defendant from all liability under the policies for and in consideration of the sum of $700.

A written direction was given defendant on December 1, 1924, to pay the $700 over to Thomas, the insured's son-in-law, with whom he had counseled regarding the terms of the settlement; and on the same day payment was made as directed. Thomas testified that the insured's idea in effecting the settlement and in having the money turned over to him was to have a fund on hand so that the insured's personal wants could be cared for during his lifetime, and his funeral expenses be paid.

The issues in the case were made up by the affirmative defenses pleaded in the answer and the averments of the reply thereto.

In its answer defendant set up the change of beneficiary in accordance with the power reserved to the insured in the policies, and the subsequent release of defendant's liability under the policies upon the payment by the company of a sum equal to, and in fact in excess of, the then cash surrender value of the policies.

By way of reply plaintiff alleged that the policies had been issued to her at her request and for her use and benefit; that she had paid all premiums thereon out of her own money; that the policies at all times, including the time of the death of the insured, were in her sole possession, charge, and control; that she was the legal holder of the policies, and no one but herself had the right to their possession or control, or the right to surrender them; and that the policies were not...