Hooks v. Metropolitan Life Ins. Co.
| Decision Date | 11 January 1937 |
| Docket Number | 16571 |
| Citation | 171 So. 601 |
| Court | Court of Appeal of Louisiana — District of US |
| Parties | HOOKS v. METROPOLITAN LIFE INS. CO |
J. I McCain, of New Orleans, for appellant.
Spencer Gidiere, Phelps & Dunbar and Wood Brown, all of New Orleans for appellee Metropolitan Life Ins. Co.
Clem F Perchall, Rudolph F. Becker, Jr., and Harry T. Wilkins, all of New Orleans, for interveners-appellees.
OPINION
When Jeanette Kent died in this city on April 27, 1934, George Hooks, in whose home she had lived intermittently, found, among her meager effects, two policies of insurance which had been issued to her by Metropolitan Life Insurance Company. For some time previous to her death she had not paid premiums on these policies, and, had it not been for the provisions of Act No. 193 of 1906 they would have been worthless.
Hooks, having been advised that, because of the said statute, the policies still had some value, and declaring that since he had paid the burial expenses of the said deceased he was entitled to the proceeds of the policies, presented them to the insurer and made claim thereunder.
The insurer, believing at that time that its liability under the policies was limited to the sum of the paid-up values which, at the time of the respective lapses of the policies, the accumulated reserves would have purchased, and believing, also, that Hooks had paid, or obligated himself to pay the burial expenses of the assured, tendered to him $ 73.53 as the full amount due as the sum of the paid-up values of the two policies. He accepted this. Later the Supreme Court of Louisiana, in Succession of Watson v. Metropolitan Life Insurance Company, 183 La. 25, 162 So. 790, held that under such circumstances the reserve accumulated on a lapsed policy must be applied to the purchase of extended insurance for the full face amount of the policy for such term as the reserve will purchase, rather than to the purchase of paid-up insurance for a smaller amount. Thereafter, as a result of that decision in the Watson Case Hooks made claim on the insurer and demanded the difference between the paid-up value, $ 73.53, which had already been paid to him, and the face value of the two policies. In the meantime, however, Isabell Davis and Frances Spradly presented themselves and, asserting that they were the legal heirs of the said deceased, made written demand on the insurer for the balance which all parties now admit is due under the said policies to the rightful claimant and which is now conceded by all parties to be $ 290.35.
Because of these conflicting claims, the insurer was unwilling to pay the balance to Hooks and he filed this suit, asserting that, since the insurer had made the original payment of $ 73.53 to him and had thus recognized him as the beneficiary, it must pay the additional sum to him also and cannot be heard to deny that he is the rightful owner of the said unpaid balance.
In answer to Hooks' petition, the insurer, proceeding under the provisions of Act No. 123 of 1922 the interpleader statute deposited in the registry of the court the balance admittedly due to the rightful claimant and called upon the rival claimants to appear and assert their respective claims. In its petition of interpleader the said insurer admitted that it had made the original payment of $ 73.53 to Hooks and alleged that it had done so in the belief that he had
In answer to the petition of interpleader there appeared Hooks, the original petitioner, and four heirs of the assured, to wit, Frances Spradly and Isabell Davis, who had already made written claim, and also Thomas Henry and Rogers Turner, which four alleged heirs, acting together, made joint claim for the proceeds. On October 19, 1936, in the succession proceedings of the insured, there was judgment recognizing the four alleged heirs as heirs-at-law of the said assured and sending them into possession of her estate. Thereafter, in this interpleader proceeding, there was judgment in favor of the said heirs and dismissing the claim of Hooks. He has taken this appeal.
Hooks has made no attack on the judgment rendered in the succession proceedings which recognized the four named persons as heirs of the assured and, if he is to succeed in his attempt to obtain the balance due under the policies, he must do so not because of any defect in their rights as heirs, but solely because of the strength of his own claim as recognized beneficiary and because of his right as such, if he has such right, to be preferred over the legal heirs.
He does not claim to be a relative of the assured, nor that he was designated by her as beneficiary, but rests his claim solely on the ground that, since the insurer, in making the first payment to him, recognized him as beneficiary, neither it nor any one else may be heard to question his right to the subsequently discovered unpaid balance.
When the insurer paid to him the amount which all thought was the total amount due, it did so because of the provisions of the so-called "facility of payment" clause under which it was stipulated that the insurer might secure full release of its obligation by making payment to any one or more of certain persons "equitably entitled to the same by reason of having incurred expense on behalf of the insured, or for his or her burial."
On behalf of Hooks it is contended that payment under this clause operates not only as a full release of the insurer, but also as a full settlement of all conflicting claims among rival claimants, and also that, when the insurer has once determined upon and selected the person to whom it will make payment, if that person is one who, under that clause, may receive it, the insurer is irrevocably and forever estopped to reverse or, in any way, to alter its decision.
On behalf of the recognized heirs several contentions are made. In the first place it is said that in no case may a creditor be "equitably entitled" to the proceeds of such a policy except in an amount to some extent commensurate with the amount of the debt due to him; in other words that, if the policy is for a large sum for instance, $ 10,000 and the debt due or the funeral bill incurred is insignificant say $ 200 it cannot be said that the creditor is equitably entitled to the enormous excess which will remain after the payment of the debt.
This contention is interesting and finds some support in logic and among...
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