Federal Reserve Bank of Richmond v. Neuse Mfg. Co.
| Decision Date | 04 May 1938 |
| Docket Number | 451. |
| Citation | 196 S.E. 848,213 N.C. 489 |
| Parties | FEDERAL RESERVE BANK OF RICHMOND v. NEUSE MFG. CO. et al. (GANT, Intervener). |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Wake County; H. E. Olive, Special Judge.
Suit by the Federal Reserve Bank of Richmond against the Neuse Manufacturing Company and others, wherein a receiver was appointed and Sue Dishman Gant, executrix of Kenneth Gant deceased, intervened and filed a petition for an order directing the receiver to pay her the net proceeds of a policy on the life of her testator in which the named defendant was named as beneficiary. From a judgment denying the claim and dismissing the petition, the intervener appeals.
Affirmed.
In the above-entitled cause an order was entered by Harris, J., July 25, 1936, appointing Don P. Johnston receiver for the defendant corporation. On April 29, 1937, Sue Dishman Gant executrix of Kenneth Gant, filed a petition in the cause, in which she seeks an order of the court directing the receiver to pay to her the sum of $17,655.22, which represents the net proceeds of a policy of insurance on the life of her testator, in which the defendant Neuse Manufacturing Company was named as beneficiary.
In March, 1919, the Neuse Manufacturing Company applied to the Guardian Life Insurance Company of America for and obtained a policy of life insurance upon the life of Kenneth Gant, who was then, and at all times thereafter until his death president of said corporation. The Neuse Manufacturing Company was named as beneficiary with the provision in the policy that the beneficiary could not be changed without the consent of the Neuse Manufacturing Company. Said corporation paid all premiums thereon.
On March 7, 1937, while the receivership was in force, an annual premium in the sum of $701 became due, subject to a grace period of thirty days within which to pay the same. The company having borrowed, before the receivership, the sum of $6,740.60 on the policy, interest on said loan in the sum of $337.03 matured on the same date. Under the participating provisions of the policy a dividend in the sum of $145.50 was due from the company to the beneficiary. On that date the cash or loan value of the policy was $7,738.50. After charging the loan against the cash value, there was a net unencumbered cash or loan value of $997.90. After charging the premium and interest maturing on March 7, 1937, less the dividend, to the cash value of the policy, there still remained an unencumbered loan value of $105.37.
Both prior and subsequent to March 7, 1937, Kenneth Gant and the receiver had discussed a proposal that said policy be assigned to said Kenneth Gant upon the payment of the asset value of the policy. On March 15, 1937, the receiver having come to the conclusion that it was not advisable for him to undertake to continue to carry said policy, the negotiations were resumed, the asset value of the policy was ascertained as they then understood it, and the receiver agreed that he would assign the policy to Kenneth Gant if, and upon condition that, such transfer was approved by the resident judge. Pursuant thereto Kenneth Gant wrote a letter to the attorneys for the receiver setting out the facts and stating:
Mr. Don P. Johnston has conferred with me with reference to o disposition and my taking over Guardian Life Insurance Policy held by the Neuse Manufacturing Company in the amount of $25,000 on my life. * * *
I appreciate fully that Mr. Johnston, as receiver, is in no position to carry this insurance and I would much prefer to take the policy over rather than have it lapse or to be transferred to some other purchaser. Mr. Johnston states that it will be necessary for you to draft a Court Order for this transfer for Judge Harris' approval and signature, all of which I hope meets with your approval."
On March 16, 1937, counsel for the receiver replied as follows Immediately thereafter Kenneth Gant went to a hospital, where he was required to undergo an operation, from which he died on the morning of March 25, 1937. In the meantime, no order had been presented to or approved by the resident judge or any other judge having jurisdiction. While petitioner's testator was critically ill, his brother and son tendered $105.37 to the receiver, which tender was refused. After the death of petitioner's testator, the insured, the insurance company paid to the receiver the net sum due in the amount of $17,655.22, which is now held by the receiver subject to the orders of the court.
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