Jenkins v. Metropolitan Life Ins. Co.

• Decision Date: 21 December 1944
• Docket Number: 15186.
• Citation: 113 Colo. 68,155 P.2d 772
• Parties: JENKINS v. METROPOLITAN LIFE INS. CO. et al.
• Court: Colorado Supreme Court

155 P.2d 772

113 Colo. 68

JENKINS v. METROPOLITAN LIFE INS. CO. et al.

No. 15186.

Supreme Court of Colorado, En Banc.

December 21, 1944

Rehearing Denied Jan. 8, 1945.

Error to District Court, City and County of Denver; Samuel W Johnson, Judge.

Action by Mattie Jenkins against Metropolitan Life Insurance Company on a life policy, wherein the defendant interposed a cross-bill of interpleader against plaintiff and Agnes Wade and T. G. Granberry, as administrator of the estate of William D. Wade, deceased. To review an adverse judgment, the plaintiff brings error and applies for supersedeas.

Reversed with instructions.

JACKSON and KNOUS, JJ., dissenting.

John T. Dugan, Richard Peete, and S. M. True, all of Denver, for plaintiff in error.

Henry McAllister and John O. Rames, both of Denver, for defendant in error Metropolitan Life Ins. Co.

S.E Cary, of Denver, for cross-defendants in error, Agnes Wade and T. G. Granberry, as administrator of estate of William D Wade, deceased.

HILLIARD Justice.

June 29, 1936, the Metropolitan Life Insurance Company issued an endowment policy to one Wade. The policy provided that if Wade made payment of premiums as required by the terms until he had attained to the age of seventy-nine years, it would pay him the sum of $392; and in the event of his death 'prior to the date of the maturity of the endowment,' the company promised that 'upon receipt of proofs of the death of the insured made in the manner, to the extent and upon the blanks required herein, and upon surrender of this policy and evidence of premium payment hereunder,' to pay the like sum 'to the executor or administrator of the insured, unless payment be made under the provisions of the next succeeding paragraph.' That paragraph reads: 'The company may make any payment or grant any non-forfeiture privilege provided herein to the insured, husband or wife, or any relative by blood or connection by marriage of the insured, or to any other person appearing to said company to be equitably entitled to the same by reason of having incurred expense on behalf of the insured, or for his or her burial, and the production of a receipt signed by any such persons, or of other proof of such payment or grant of such privilege to any of them, shall be conclusive evidence that all claims under this policy have been satisfied.' A further provision of the policy is as follows: 'The conditions, the privileges and concessions to policy holders, * * *, and any endorsement either printed or written by the company, on this or any of the pages following are a part of this contract as fully as if recited over the signatures hereto affixed.'

December 15, 1939, insured, employing a blank form of 'application for designation of beneficiary' supplied by the company for that purpose, and which provided that 'The insured may, at any time by written request, change the beneficiary,' first revoking 'any previous designation of beneficiary,' added, 'I hereby request the Metropolitan Life Insurance Company to designate Mattie Jenkins, friend, * * * as beneficiary, to receive any death benefit under such policy, subject, however, to the following provisions: * * *. If the date of issue of such policy is prior to January 1, 1937 [as here], such designation shall be subject to the provisions in the policy authorizing payment at the company's option to my executor or administrator, or to any of my relatives by blood, or connection by marriage, or to any other person appearing to said company to be equitably entitled to the same by reason of having incurred expense on my behalf or for my burial.' The blank form contained this additional provision: 'No designation of a beneficiary shall be binding on the company unless endorsed on the policy by the company.' January 9, 1940, the company, proceeding pursuant to the foregoing application by the insured, endorsed the policy as follows: 'Subject to the provisions of the policy authorizing payment to the executor or administrator of the insured, or at the company's option to other persons, Mattie Jenkins--non-relative, has been designated beneficiary to receive death benefit only.' In compliance with policy requirements in that regard, the endorsement was signed by the secretary of the company. In addition to the foregoing writings, the Denver manager of the insurance company testified that, after careful consideration, it had consented to the change of beneficiary.

The insured delivered the policy to the beneficiary so designated, who paid all premiums accruing thereafter, and upon the insured's death, which occurred August 7, 1940, she made proofs of death in required and satisfactory form, surrendered the policy to the company and demanded payment. In the meantime she had 'contracted for the burial expenses and the expenses of the last illness of the said Wade,' and 'made all arrangements with the Douglass Undertaking Company to have Mr. Wade buried.' Before consummation, however, the estranged wife of the insured learned of his death, came from Wyoming, asserted her right to have charge of the funeral (perhaps, in law not to be gainsaid), in furtherance whereof she and the Granberry Mortuary Company entered into an agreement, the terms whereof not appearing, but to the effect, generally, that that company would conduct the funeral of the deceased. Thereupon the Granberry company, first paying $50 to the Douglass company for relinquishment of the body, obtained it for funeral purposes. Thus possessed of the body, T. G. Granberry of that mortuary, proceeding September 5, 1940, and alleging that he was a creditor of the deceased, secured appointment as administrator of the latter's estate. It is to be observed that it does not appear that Wade left any estate, or that he was ever indebted to Granberry.

Before the insurer had paid Mattie Jenkins on her demand, although it does appear that it had drawn its check to her in the amount of its liability under the policy, Mrs. Wade, proceeding as the wife of the deceased insured ('wife' appeared in the facility of payment clause as one to whom the company might make payment, but not otherwise) and Granberry, in his claimed capacity of administrator of the Wade estate, also demanded payment. The insurance company, alleging that it was perplexed and made uncertain by the several demands, and not having elected to proceed under the facility of payment clause of the policy, withheld payment and abided. September 9, 1940, Mattie Jenkins, designated as beneficiary in manner already stated, and alleging on that premise, and not otherwise, instituted an action to recover on the policy. The company, still professing perplexity, answered and interposed a cross-bill of interpleader, alleging substantially as set forth above, asking that the parties claimant be required to interplead and set forth 'their rights and demands as between themselves and each other, to the proceeds of the policy (and interest) now deposited in the registry' of the court, and have their respective claims settled and adjudged, the company to stand relieved from further responsibility in the premises. It also asked that its court disbursements and reasonable attorney's fees be allowed out of the said fund, etc. The court ordered that Mrs. Wade, and Granberry as administrator, be made parties to the proceeding. For the purposes of the action, the widow, waiving her alleged claim, joined Granberry in a joint answer and cross-complaint, in which they prayed recovery in behalf of Granberry as administrator. There were answers and replications, and the ultimate issue was, whether Mattie Jenkins, claiming as beneficiary pursuant to designation made by the insured in manner stated, or Granberry, claiming as administrator of insured's estate but not as beneficiary, was entitled to recover the fund so deposited.

The trial court found that Mattie Jenkins was entitled to 'the sum of $100.00, as a trustee, for attorney fees incurred in connection with the bringing of this action, together with her costs.' Also, the court found, that, for and on account of its cross-bill of interpleader, the insurance company should receive $25 as attorney's fee and $5 for its costs incurred; in other respects it found in favor of Granberry, as administrator. Adjudging on its several findings, the court awarded $30 to the insurer, $100 to Mattie Jenkins, and the remainder of the proceeds of the policy to Granberry, as administrator of the Wade estate. Subsequently, however, the court amended its findings and judgment by striking therefrom the words 'as administrator of the Wade estate,' and awarded to Granberry personally that which had been awarded to him as administrator. Counsel for the two interested parties seemingly agree that the adjudged allowance to Mattie Jenkins was not legally predicable. It is clear she sought no such relief. Her demand, as we have seen, was as beneficiary and for the proceeds of the policy.

The authorities are in agreement that the facility of payment clause commonly found in industrial insurance policies, as here, is permissive in character, and of which only the insurance company may make avail. Here, concededly, the insurer did not elect to act under that clause of the policy. In such situation, as we announced in Moore v Hendley, 97 Colo. 258, 48 P.2d 808, 809, 'the provision is not involved.' 'The facility of payment clause, it has been held, is for the protection of the insurer and does not grant or take away a cause of action from any person.' 29 Am.Jur., p. 956, § 1280. 'Beyond affording the company protection in paying to another, the facility of payment clause does not affect the beneficiary's rights.' 31 C.J., p. 970, [§ 8] 2. 'The 'facility of payment clause' need not be...