Kansas City Life Ins. Co. v. Rainey

• Decision Date: 05 September 1944
• Docket Number: 38930,38931
• Parties: Kansas City Life Insurance Company, a Corporation Jessie A. Rainey, Respondent, v. Paul D. Bartlett, Executor of the Estate of Herbert F. Hall, Deceased, Appellant. Kansas City Life Insurance Company v. Irving V Sandford, Respondent, Paul D. Bartlett, Executor of the Estate of Herbert F. Hall, Deceased, Appellant
• Court: Missouri Supreme Court

182 S.W.2d 624

353 Mo. 477

Kansas City Life Insurance Company, a Corporation Jessie A. Rainey, Respondent, v. Paul D. Bartlett, Executor of the Estate of Herbert F. Hall, Deceased, Appellant.

Kansas City Life Insurance Company v. Irving V Sandford, Respondent, Paul D. Bartlett, Executor of the Estate of Herbert F. Hall, Deceased, Appellant

Nos. 38930, 38931

Supreme Court of Missouri

September 5, 1944

Rehearing Denied October 9, 1944.

Appeal from Jackson Circuit Court; Hon. Paul A. Buzard Judge.

Affirmed.

Beach Gordon & Beach, and Lathrop, Crane, Reynolds, Sawyer & Mersereau for appellant.

(1) The certificates in evidence are not insurance policies. Consequently, they fall within the general rule that gifts to take effect upon the donor's death are void unless effected in the manner provided in the Statute of Wills. Sec. 520, R.S. 1939; Ellison v. Straw, 119 Wis. 502, 97 N.W. 168; Uhlman v. New York Life Ins. Co., 17 N.E. 363; Old Colony Trust Co. v. Commissioner of Internal Revenue, 102 F.2d 380; In re Walsh, 19 F.Supp. 567; State ex rel. Equitable Life Assur. Soc. of U.S. v. Hahn, 88 P.2d 484; State v. Equitable Life Assur. Soc. of U.S., 282 N.W. 411; Hall v. Metropolitan Life Ins. Co., 28 P.2d 875; Commonwealth v. Met. Life Ins. Co., 98 A. 1072; Reece v. Sec. Ben. Assn., 114 S.W.2d 207; Wayland v. Western Life Ins. Co., 166 Mo.App. 22, 148 S.W. 626; New York Life Ins. Co. v. Statham, 93 U.S. 24, 23 L.Ed. 789; Helvering v. Le Gierse, 312 U.S. 531, 61 S.Ct. 646, 85 L.Ed. 906; Helvering v. Tyler, 111 F.2d 422; Commissioner of Internal Revenue v. Keller's Estate, 113 F.2d 833; In re Thornton's Estate, 186 Minn. 351, 243 N.W. 389; Moskowitz v. Davis, 68 F.2d 818; Secs. 5852, 5853, 5854, 5855, R.S. 1939; Commonwealth v. Beisel, 388 Pa. 519, 13 A.2d 419. (2) Mr. Hall did not make a completed gift of the proceeds of the certificates to Rainey and Sandford during his lifetime. On the contrary, they were to take only upon his death. Trautz v. Lemp, 329 Mo. 58, 46 S.W.2d 135; Cartall v. St. Louis Union Trust Co., 348 Mo. 372, 153 S.W.2d 370; Martin v. First Natl. Bank, 227 S.W. 656; Burchett v. Fink, 139 Mo.App. 381, 123 S.W. 74; Stevenson v. Earl, 65 N.J.Eq. 721, 55 A. 1091; Morristown Trust Co. v. Capstick, 90 N.J.Eq. 22, 106 A. 391; Grady v. Sheehan, 256 Pa. 377, 100 A. 950; In re Brown's Estate, 22 A.2d 821; Geisel v. Burg, 283 Mich. 73, 276 N.W. 905; McDermott v. Bennett, 5 N.Y.S. (2d) 4, 253 A.D. 580; Neal v. Neal, 106 S.W.2d 595; McDonough v. Portland Savs. Bank, 1 A.2d 768; McCartin v. Devine, 17 A.2d 864; McLeon v. Hennepin County Savs. Bank, 145 Minn. 299, 176 N.W. 987; Peters, Admr. v. Peters, 6 S.W.2d 699; 84 A.L.R. 189; 66 A.L.R. 881; 103 A.L.R. 1117. (3) In the absence of a valuable consideration moving from Sandford and Miss Rainey to Mr. Hall sufficient in law to support the alleged oral contract claimed by them, the attempted gift of the proceeds of the two certificates, by other than testamentary means, is void. Vrooman v. Turner, 69 N.Y. 280, 25 Am. Rep. 195; Howsman v. Trenton Water Co., 119 Mo. 304; St. Louis v. Wright Contracting Co., 101 S.W. 6; Forgey v. Macon Tel. Co., 237 S.W. 792; Uhrich v. Globe Surety Co. of Kansas City, 166 S.W. 845; Binswanger v. Employees' Liability Assur. Corp., 28 S.W.2d 448; Federal Surety Co. v. Minneapolis Steel & Machinery Co., 17 F.2d 242; Kramer v. Gardner, 116 N.W. 925; Fidelity & Casualty Co. of New York v. Martin, 173 S.W. 307; Decker v. Fowler, 92 P.2d 254; McCarthy v. Pieret, 24 N.E.2d 102; Sliney v. Cormier, 139 A. 665; Tensfield v. Magnolia Petroleum Co., 272 P. 404; McDonough v. Portlant Savs. Bank, 1 A.2d 768; Appeal of Garland, 136 A. 459; Mutual Benefit Life Ins. Co. v. Ellis, 125 F.2d 127; In re Koss's Estate, 150 A. 360; Stevenson v. Earl, 65 N.J.Eq. 721, 55 A. 1091; Sever v. Ransom, 120 N.E. 639; Smith v. Simons, 61 P.2d 584; Sec. 1014, R.S. 1939; Cartall v. St. Louis Union Trust Co., 348 Mo. 372, 153 S.W.2d 370.

R. R. Brewster, John G. Madden, R. R. Brewster, Jr., James E. Burke, Ralph M. Russell, Brewster, Brewster & Brewster and Madden, Freeman, Madden & Burke for respondents.

(1) The respondents are the only claimants for the funds in question properly before this court, appellant having abandoned the only claims thereto upon which the judgments of interpleader were entered; respondents' motions for judgments upon the pleadings should have been sustained. Lafayette-South Side Bank v. Siefert, 18 S.W.2d 572; 7 Mo. Law Review 203; Carter v. Dilley, 167 Mo. 564; Palmer v. Marshall, 24 S.W.2d 229; Brown v. Wilson, 348 Mo. 658, 155 S.W.2d 176. (2) The policies in question are insurance contracts and respondents, as the designated beneficiaries, are entitled to the proceeds thereof. R.S. 1939, secs. 5800, 5855; Logan v. Fidelity Casualty Co., 146 Mo. 114; 1 May on Insurance (4 Ed.), p. 3; Sigal v. Hartford Trust Co., 177 A. 742; State ex rel. v. Lucas, 153 S.W.2d 10; Old Colony Trust Co. v. Commissioner, 102 F.2d 380; Helvering v. Le Gierse, 312 U.S. 531, 85 L.Ed. 996; Bodine v. Commissioner, 103 F.2d 982; Commissioner v. Meyer, 139 F.2d 256; Estate of Cora C. Reynolds, 45 B.T.A. 44. (3) Whether the policies in question are construed as insurance policies is immaterial, since in any event they are third party beneficary contracts valid as against the objection that they constitute an attempted testamentary disposition of property, particularly in view of the settled rules in this jurisdicton (a) that contracts for the benefit of a third party are entirely valid and may be enforced by such beneficiary, and (b) that no consideration passing from the beneficiary to the promisee is necessary to sustain the validity of such third party contracts. Mutual Benefit Life Ins. Co. v. Ellis, 125 F.2d 127; 138 A.L.R. 1484; Restatement of the Law, Contracts, sec. 133; Benton v. Smith, 171 S.W.2d 767; Geel's Estate, 143 S.W.2d 327; Lafayette-South Side Bank v. Siefert, 18 S.W.2d 572; Warren v. United States, 68 Ct. Cls. 634; Decker v. Fowler, 92 P.2d 254; Society of Missionary Catechists v. Bradley, 44 N.E.2d 209; Rundberg's Will, 29 N.Y.S. (2d) 375; Bergman v. Ornbaun, 92 P.2d 654; Ireland v. Lester, 298 N.W. 488, 298 Mich. 154; Lewis' Estate, 98 P.2d 654; McKinnon v. McKinnon, 56 F. 409; Ketcham v. Miller, 37 S.W.2d 635; Crow v. Kaupp, 50 S.W.2d 995; McCoy v. St. Joseph Railway, 77 S.W.2d 175; Crone v. Stinde, 156 Mo. 262; Scheele v. Bank, 120 Mo.App. 611; Missouri Annotations to Restatement of the Law, Contracts, sec. 135. (4) The delivery of the policies in question to respondents by Hall, with appropriate words of gift, constituted an assignment of the choses in action and effected completed gifts inter vivos. Helvering v. Le Gierse, 312 U.S. 531, 85 L.Ed. 996; Davis v. Rossi, 34 S.W.2d 8; Burns v. Nolette, 144 A. 848, 67 A.L.R. 1051; Soulard's Estate, 43 S.W. 617; Galloway v. Galloway, 169 S.W.2d 883; Fendler v. Roy, 58 S.W.2d 459; Chapman v. McIlwrath, 77 Mo. 38; First National Bank v. Liberty Trust, 134 A. 210, 47 A.L.R. 730; Brodrick v. O'Connor, 271 Mass. 240, 171 N.E. 479; Ford v. Ford, 259 N.W. 138; Batal v. Buss, 199 N.E. 750; Goldston v. Randolph, 199 N.E. 896; Geel's Estate, 143 S.W.2d 327; Sigal v. Hartford Bank, 177 A. 742; Christ v. Huehne, 172 Mo. 118; Lanphere v. Affeld, 99 S.W.2d 36; Sims v. Brown, 158 S.W. 624; Trautz v. Lemp, 46 S.W.2d 135, 329 Mo. 58; Cartall v. St. Louis Union Trust Co., 348 Mo. 372, 153 S.W.2d 370. (5) In determining whether a given act is testamentary or non-testamentary in character, the intention of the decedent controls, and the undisputed proof in these proceedings demonstrates that no testamentary disposition was intended. Bergman v. Ornbaun, 92 P.2d 654; Wimpey v. Ledford, 177 S.W. 302; Heuler's Estate, 278 P. 1031; Blackwell v. Lee, 15 P.2d 574; Fuhrmann's Will, 244 N.W. 628; Rennie v. Washington Trust, 249 P. 992; Sims v. Brown, 158 S.W. 624. (6) The intention of Hall being plain, unambiguous and undisputed, the rights of respondents to such policies and the proceeds thereof are sustainable as a trust for their benefit, and no element of testamentary disposition is involved. Fendler v. Roy, 58 S.W.2d 459; Chapman v. McIlwrath, 77 Mo. 38; Harris Banking Co. v. Miller, 190 Mo. 640; Geel's Estate, 143 S.W.2d 327; Soulard's Estate, 43 S.W.2d 617; Davis v. Rossi, 34 S.W.2d 8, 326 Mo. 911.

OPINION

Douglas, J.

In 1925 Jessie A. Rainey became Herbert F. Hall's secretary and continued as such until his death. In 1931 Hall, aged 72, purchased an "Investment Annuity Policy" from the Kansas City Life Insurance Company for $ 50,000, the income payable to him, the principal payable to his wife at his death. After his wife died he named Miss Rainey beneficiary in the policy. Hall died in 1941. Sanford was in Hall's employment from 1920 until Hall's death. He, too, after Mrs. Hall's death was named as beneficiary in a similar policy for $ 50,000.

After Hall's death Miss Rainey and Sanford claimed the proceeds of the respective policies from the insurance company. The executor of Hall's estate also claimed the proceeds of both policies. The insurance company filed interpleader suits on each policy against the beneficiaries and the executor and paid the $ 50,000 into court in each case. The trial court found for the beneficiaries and the executor appeals. The two suits were tried together below and have been consolidated in this court for argument and decision. The judgments should be affirmed.

Since the policies are the same we will refer only to the policy for Miss Rainey. The policy provides for a single premium of $ 50,000. It pays a quarterly annuity to the assured and upon his death it pays $ 50,000 to his beneficiary. It could be surrendered after three years for the principal amount or up to one-half the principal amount could be...