General American Life Insurance Company v. Cole

• Decision Date: 31 May 1961
• Docket Number: 59 C 80(3),59 C 82(3).,No. 59 C 65(3),59 C 65(3)
• Citation: 195 F. Supp. 867
• Parties: GENERAL AMERICAN LIFE INSURANCE COMPANY v. Edna Ruth Bullock COLE, Gertrude Christine Duerbeck, Joseph Neaf, Public Administrator in charge of Estate of James S. Bullock, deceased. PRUDENTIAL INS. CO. OF AMERICA v. Joseph NEAF, Public Administrator in charge of Estate of James Stanley Bullock, deceased, and Edna Ruth Bullock Cole. AID ASSOCIATION FOR LUTHERANS v. Edna Ruth Bullock COLE, Gertrude Christine Duerbeck, a/k/a Mrs. Gertrude (Houseknecht) Duerbeck, and Joseph Neaf, as Public Administrator in charge of the Estate of James Stanley Bullock, deceased.
• Court: U.S. District Court — Eastern District of Missouri

195 F. Supp. 867

GENERAL AMERICAN LIFE INSURANCE COMPANY v. Edna Ruth Bullock COLE, Gertrude Christine Duerbeck, Joseph Neaf, Public Administrator in charge of Estate of James S. Bullock, deceased.

PRUDENTIAL INS. CO. OF AMERICA v. Joseph NEAF, Public Administrator in charge of Estate of James Stanley Bullock, deceased, and Edna Ruth Bullock Cole.

AID ASSOCIATION FOR LUTHERANS v. Edna Ruth Bullock COLE, Gertrude Christine Duerbeck, a/k/a Mrs. Gertrude (Houseknecht) Duerbeck, and Joseph Neaf, as Public Administrator in charge of the Estate of James Stanley Bullock, deceased.

Nos. 59 C 65(3), 59 C 80(3), 59 C 82(3).

United States District Court E. D. Missouri, E. D.

May 31, 1961.

COPYRIGHT MATERIAL OMITTED

Frank P. Aschemeyer and Paul G. Ochterbeck, St. Louis, Mo., for General American Life Ins. Co.

Mortimer A. Rosecan, St. Louis, Mo., for Edna Ruth Bullock Cole.

Raymond J. Lahey, St. Louis, Mo., for Gertrude Christine Duerbeck.

Thomas P. Howe, Neaf, pro se, St. Louis, Mo., for Joseph Neaf.

Paul B. Rava and John H. Lashly, Lashly, Lashly & Miller, St. Louis, Mo., for Prudential Ins. Co. of America.

Fred L. Kuhlmann and Stuart Symington, Jr., Stolar, Kuhlmann & Meredith, St. Louis, Mo., for Aid Assn. for Lutherans.

WEBER, District Judge.

Three causes of action were consolidated for trial, Cause No. 59 C 65 was instituted by General American Life Insurance Company, No. 59 C 80 by Prudential Insurance Company of America, and No. 59 C 82 by Aid Association for Lutherans. Each plaintiff had an insurance policy in force on the life of James Stanley Bullock, who was killed on December 17, 1958. The insurance companies each filed Bills of Interpleader tendering the proceeds of the policies in question into Court alleging that Edna Ruth Bullock (named beneficiary and wife of the deceased James Stanley Bullock), Gertrude Christine Duerbeck (aunt of James Stanley Bullock) and Joseph Neaf (Public Administrator of St. Louis County, Missouri, and administrator in charge of the estate of James Stanley Bullock) each claimed an interest therein.¹

Edna Ruth Bullock was a resident of the State of Kansas at the time of the institution of the suits and Mrs. Duerbeck and Neaf were residents of Missouri and the companies invoked the provisions of 28 U.S.C., § 1335, which gives federal courts jurisdiction where two or more adverse claimants, of diverse citizenship, claim or may claim to be entitled to the proceeds of an insurance policy. The named defendants each filed their respective claims to the proceeds, the issues were thus joined and the cause came on to trial before the Court.

Edna Ruth Bullock, nee Ball, and James Stanley Bullock were married June 28, 1958, and had been married five months and nineteen days on the date he was killed. The short duration of the marriage, the mystery of his death and the amount of benefits provided by the policies of insurance on his life have been factual elements injected into the trial of the case as evidence from which certain inferences should be drawn.² All of the General American policies were obtained through the facilities of the employer of James Stanley Bullock; they were purchased before he met and married Edna Bullock; the beneficiary was changed from Mrs. Duerbeck to his wife within one month after the marriage; and one group policy was increased from $6,000 to $8,000 about four months after the marriage. The Aid Association policy was issued over eight years before and the change of beneficiary took place within two months after the marriage. The Prudential policy was applied for in July, 1958, but not issued until September 19, 1958, due to some difficulty concerning James Bullock's medical examination, and Edna Bullock was the designated beneficiary from the date of its application and issuance. The policies contained provision for change of beneficiary at the discretion of the insured. Mrs. Duerbeck had no financial interest in the policies at the time she was beneficiary as she did not take them out upon the life of her nephew nor did she pay any premiums thereon.

Defendant Edna Ruth Bullock remarried on December 26, 1959, and is now Edna Ruth Cole but, for the convenience of this opinion, she will be referred to hereinafter as Edna Bullock. The deceased insured will hereinafter be referred to as James, the aunt as Duerbeck and the Public Administrator as Neaf. Other witnesses will be referred to by their last names.

Basically then, these are three suits in which three insurance companies deposit the proceeds of insurance policies on the life of James into Court and in which Edna Bullock, his legal wife, was the named beneficiary. She claims the proceeds as such. Duerbeck claims the proceeds in two of the cases on the grounds and under the theory that Edna Bullock fraudulently married James with the intention of collecting the proceeds of the policies. Neaf claims that Edna Bullock conspired in the death of James and is therefore barred from receiving the benefit of the policies by her own act, and that he, as Public Administrator, is entitled to the proceeds inasmuch as James died intestate.

At this point let the Court point out that this is not, nor has it been, a murder trial. The issue is not to determine guilt and punish for a crime as such proceedings are left to the state. This is a suit for insurance money and the sole legal issue here is whether the named beneficiary of the insurance policies is entitled to the proceeds or whether she is barred from receiving the proceeds because of fraud perpetrated on the insured or participation or complicity in his death.

There is no dispute in the evidence as to the fact that Edna Bullock and James were legally married and the marriage existed until its termination by his death. He met his demise outside the Art Museum in the City of St. Louis and death was the result of gunshot wounds of a type and description as to eliminate all possibility of self-infliction. In other words, he died by gunshot wounds inflicted by an assailant, but whether his death constitutes a murder or homicide within some degree recognized as a crime against the state, is, as yet, unestablished by criminal proceedings. The death officially remains a mystery, and whether the mystery will be solved to the satisfaction of the state criminal law is another mystery in itself.

The law involved in this cause is very simple. A person buying a life insurance policy may designate anyone he desires as a beneficiary. Walker v. General American Life Ins. Co., Mo., 141 S.W.2d 785, 787. Religiously, marriage is recognized as a divine institution and, in a sense, the law so recognizes it, but at the same time treats the relation as a matter of contract. Ryan v. Ryan, 156 Mo.App. 655, 137 S.W. 1014, 1016. Only the parties to a marriage have the right to complain of any injury therefrom or deceit in procurement and whether they marry and whether they continue to live together is for their decision alone. Hinkle v. Lovelace, 204 Mo. 208, 102 S.W. 1015, 1018, 11 L.R.A.,N.S., 730; 27A C.J.S. Divorce § 89, p. 311. A beneficiary under a life insurance policy which gives the insured the right to change the beneficiary has no vested interest in the policy and upon effective change by the insured is divested of all rights thereunder. Persons v. Prudential Ins. Co., Mo., 233 S.W.2d 729, 732; Robinson v. New York Life Ins. Co., 168 Mo.App. 259, 153 S.W. 534; Morgan v. Penn Mut. Life Ins. Co., 8 Cir., 94 F.2d 129.

As to the Duerbeck claim, the lessons of the law are likewise simple. Her claim is based upon fraud. Fraud is never presumed but must be proven as an affirmative fact and if the facts shown consist as well with honesty as with fraud, the transaction should be held honest. Moberly v. Watson, 340 Mo. 820, 102 S.W.2d 886, 889. The burden is upon the party asserting the fraud and the proof must be clear and convincing. Farmers & Merchants Bank of Festus v. Funk, 338 Mo. 508, 92 S.W.2d 587, 589. And this is true even though the transaction was between husband and wife. Oetting v. Green, 350 Mo. 457, 166 S.W.2d 548. More than the mere weight or preponderance of the evidence is required and, while circumstantial evidence may be used, fraud may not be proven by building inference on inference. As said in the case of United States v. United States Cartridge Co., 95 F.Supp. 384, at loc. cit. 418:

"Fraud is never presumed but must be proved. Jones v. Simpson, 116 U.S. 609, 6 S.Ct. 538, 29 L.Ed. 742; Baumgartner v. United States, 8 Cir., 138 F.2d 29. The cases hold more than that the mere weight or preponderance of evidence is required. The evidence must be clear, unequivocal and convincing. * * While proof of fraud may be accomplished by circumstantial evidence, fraud may not be proved by building inference on inference."

The essential elements of actionable fraud are (1) a representation, (2) its falsity, (3) its materiality, (4) a perpetrator's knowledge of its falsity or ignorance of its truth, (5) the intent that it should be acted upon, (6) the ignorance of its falsity on the part of the person defrauded, (7) his reliance on its truth, and (8) his right to rely thereon. Lowther v. Hays, Mo., 225 S.W.2d 708, 713; Heckenkamp v. Kennedy, 8 Cir., 267 F.2d 887. And, the establishment of each essential element is necessary. Dillon v. Hill, Mo., 178 S.W. 85; Lowther v. Hays, supra; Heckenkamp v. Kennedy, supra.

It should be pointed out that the party to have been defrauded in this cause of action is not Duerbeck, but James. In other words, Duerbeck has no vested interest in the two policies in question and before she can recover has the burden of showing that Edna Bullock defrauded James.

As to the Neaf claim, the basic law is likewise not hard to understand. Edna Bullock was the legal wife of the deceased and the named beneficiary in the policies and, as such, she is entitled to the proceeds thereof. Moldovan v. John Hancock Mut. Life Ins. Co., Mo.App., 124...