Ex parte Boddie
| Decision Date | 23 June 1942 |
| Docket Number | 15432. |
| Citation | 21 S.E.2d 4,200 S.C. 379 |
| Parties | Ex parte BODDIE. JEFFERSON STANDARD LIFE INS. CO v. SCOTT et al. SAME v. BODDIE et al. |
| Court | South Carolina Supreme Court |
J D. O'Bryan, of Kingstree, for appellant.
M L. Meadors, of Florence, Thomas, Cain & Black, of Columbia, and Lee & Shuler, of Kingstree, for respondent.
On March 24, 1926, D. C. Scott, Jr., obtained a loan of $3,500 from Jefferson Standard Life Insurance Company, evidenced by his note, and secured by a mortgage on some lots owned by him in the Town of Kingstree. He took out a policy of $3,500 with the Insurance Company and pursuant to the terms of the mortgage assigned it to the company.
A similar transaction between Mr. Scott and the Insurance Company took place in October, 1927, involving a loan of $2,000 secured by another real estate mortgage, and a life insurance policy in the sum of $2,500 was assigned to the company. The facts surrounding the two transactions are substantially the same.
Mr Scott was unmarried at the times the loans were made, and his estate was named as beneficiary under both policies. The right was reserved to him in both policies to change the beneficiary at any time. Thereafter, Mr. Scott married, his wife being the appellant, Mrs. Harriet T. Scott, and on March 3, 1932, he had her named as beneficiary, and a notation of the change was made by the company on the back of the policies, subject to the assignments. No further change of beneficiary was ever made.
Mr. and Mrs. Scott became estranged, and on November 17, 1934, he executed a will leaving nothing to her, but giving all of his property, both real and personal, to his nieces and nephews.
In the year 1937, the mortgages being in default, the Insurance Company began foreclosure proceedings, and these suits were pending at the time of the death of Mr. Scott, which occurred on June 16, 1939.
W. W. Boddie, Jr., qualified as administrator cum testamento annexo of the will, and thereafter began this proceeding in one of the original actions. In his petition he prayed that the Insurance Company be required to apply the proceeds of the insurance policy to the payment of the balance due on the mortgage debt, to mark the mortgage satisfied, and surrender it for cancellation. It was subsequently agreed that the order of court should apply to both of the transactions, although the petition referred to the 1927 loan only; and so this opinion covers both policies.
Mrs. Scott was not at first made a party to the proceedings, and the Insurance Company in its original return prayed that she be brought in. Upon appeal from an order of his honor, Judge Philip H. Stoll, this court determined that she should be made a party. 197 S.C. 251, 15 S.E.2d 122. This was done, and in her return she alleged that immediately upon the death of Mr. Scott the proceeds of the life insurance policy vested in her absolutely as beneficiary, and as it was assigned to the company only as additional and collateral security to the mortgage indebtedness of Mr. Scott, the premises covered by the mortgage are first responsible for the payment of the debt, and that she is entitled to the full proceeds of the policy without any deduction whatsoever on account of the mortgage indebtedness, except as to any portion remaining unpaid after applying to it the entire proceeds derived from the mortgaged premises.
The Insurance Company, in its present return, alleged that it is ready and willing to make proper application of the proceeds of the policies, but that the insurance is claimed both by Mrs. Scott and by the Boddie children, and prayed that its rights and interests under the mortgages and assignments of insurance be fully protected by the court, and that the court direct it to make such application of the proceeds of the insurance as shall be legal and as shall protect its rights.
The case was heard by his honor, Judge L. D. Lide, presiding in the Third Circuit, and by his decree he ordered that the face amount of the insurance policies be applied to the payment of the indebtedness represented by the notes of Mr. Scott to the company, both secured by mortgages of real estate, and that the mortgages be satisfied and surrendered for cancellation if the amount of the insurance was sufficient to pay the indebtedness in full.
Mrs. Harriet T. Scott appeals from this decree. In the decree it was held that when Mr. Scott took out the insurance policies and assigned them to the company as additional collateral to the indebtedness, he had in mind that in the event of his death the proceeds of the insurance would pay the mortgage debt, and would leave the real estate free of indebtedness, thus saving the expenses incident to foreclosure proceedings and the possibility of a deficiency judgment.
In a group of the exceptions the appellant contends that there was error in this finding as to the intention of Mr. Scott.
The cause was heard by Judge Lide on the pleadings, the notes, mortgages, insurance policies, assignments, an affidavit of the attorney for the administrator, and a certificate of the Clerk of Court. No oral testimony was taken.
We think that there was no direct evidence before the court to support the finding as to the intention of Mr. Scott. There were no letters in evidence, nor was there any testimony of the insurance agents as to what took place at the time the loans were made. The only real evidence as to his reason for assigning the policies is the provision in the mortgages requiring him to do so. No doubt the company desired the additional protection for the indebtedness due it, and made the taking of the insurance a condition to the granting of the loan. There is nothing to show that the thought originated with Mr. Scott. The assignment was on a form prepared by the company, and this transaction was doubtless handled in the lender's customary manner.
Any inference as to Mr. Scott's intention which might be drawn from the fact that the debt was secured by both the real estate and the insurance policies is, in our opinion, overcome by the positive evidence that he later made his wife the beneficiary. While it is true that her rights as beneficiary were expressly made subject to the assignments, we think that all of the written evidence in the case, taken as a whole, shows an intention on his part to have the insurance proceeds go to her subject only to the rights of the company in the event that there should be a deficiency over and above the proceeds of sale of the real estate, rather than a desire for her to have only what might be left over from the insurance proceeds after paying the entire debt from that fund.
It is true that the petition alleges that the policies were taken out for the specific purpose of paying the indebtedness from the proceeds in the event of his death; but this is denied by the return of Mrs. Scott, and no testimony was offered by the administrator in support of his allegation.
The act of Mr. Scott after his marriage in having his wife named as beneficiary shows that he intended for her to be benefited by the proceeds, otherwise he would have left it as it was. When he later made his will he did not change the beneficiary, as he had a right to do, so as to substitute his nieces and nephews, the devisees under his will. It would seem that he would have taken that action if he had desired that the proceeds of the policies should be applied to the payment of the mortgage indebtedness, so as to free the premises from debt for the benefit of the devisees. Further, when the foreclosure proceedings were begun against him and he realized the likelihood of the land being sold in foreclosure and eventually lost to his nieces and nephews, he took no step to compensate them for this by changing the beneficiary from his wife to them, or to his estate.
The course followed by Mr. Scott, we think, indicates that it was his intention that his wife should receive the proceeds of the insurance, and his nieces and nephews should have the land subject to the mortgage indebtedness, if not paid during his lifetime; and to give the additional security to the company without impairing the interest of his wife as beneficiary beyond what was required to protect his loans.
Our conclusion is that the learned Circuit Judge was in error in his finding as to the intention of Mr. Scott.
Under another group of the exceptions the appellant contends that as the policies were assigned only as additional collateral to the mortgage indebtedness, the proceeds of the policies payable to the beneficiary should not be applied to the payment of the mortgage debt before the mortgage security is exhausted.
The notes given by Mr. Scott contained the following provision: "This note is secured by a mortgage of even date conveying real estate in Williamsburg County, South Carolina."
The mortgage provided that the mortgagor should procure a policy of life insurance and should pay the premiums, "and as additional collateral for the indebtedness hereunder secured, will keep said policy or policies constantly assigned to said mortggee in accordance with the terms of a form of assignment to be furnished by said mortgagee."
The assignments stated that the policies were assigned to the Insurance Company "with all the rights and powers of the insured and the beneficiary conferred by said policy." It was further provided that "this assignment is made in order to secure a certain note which was given by D. C Scott, Jr., to said Jefferson Standard Life Insurance Company, in consideration of a loan from said Company, said note being also secured by mortgage or deed of trust upon real estate or other securities;...
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Jefferson Standard Life Ins. Co. v. Boddie
...202 S.C. 1 JEFFERSON STANDARD LIFE INS. CO. v. BODDIE et al. No. 15478.Supreme Court of South CarolinaDecember 15, 1942 See, also, 200 S.C. 379, 21 S.E.2d 4. L. Meadors, of Florence, and A. C. Hinds, of Kingstree, for appellants. Lee & Shuler, of Kingstree, and Thomas, Cain & Black, of Colu......