Kevan v. John Hancock Mut. Life Ins. Co., 8684.

• Decision Date: 21 April 1933
• Docket Number: No. 8684.,8684.
• Citation: 3 F. Supp. 288
• Parties: KEVAN v. JOHN HANCOCK MUT. LIFE INS. CO.
• Court: U.S. District Court — Western District of Missouri

3 F. Supp. 288

KEVAN v. JOHN HANCOCK MUT. LIFE INS. CO.

No. 8684.

District Court, W. D. Missouri, W. D.

April 21, 1933.

J. M. Johnson and Donald W. Johnson, both of Kansas City, Mo., for plaintiff.

Roy P. Swanson (of Meservey, Michaels, Blackmar, Newkirk & Eager) and Kenneth E. Midgley, both of Kansas City, Mo., for defendant.

Sam B. Sebree (of Sebree, Jost & Sebree), of Kansas City, Mo., amicus curiæ

OTIS, District Judge.

Plaintiff's petition is in four counts. Counts I and III are of the same character and contain substantially the same allegations, but concern different policies of insurance. Counts II and IV are of the same character and contain substantially the same allegations, but concern different policies of insurance. This memorandum will speak only of counts I and II. What is said as to them will apply equally to counts III and IV.

As to Count I.

1. In count I of the petition plaintiff sues as administratrix of the estate of Millard N. Kevan, deceased. Kevan had a policy of life insurance with the defendant. His wife, Elizabeth Kevan (as administratrix of the estate she is the plaintiff), was named as beneficiary. Kevan reserved the right to change the beneficiary but did not exercise that right. The petition alleges that on August 6, 1932, Kevan entered into an agreement with the defendant which in fact and in law would have effectuated cancellation and surrender of the policy except for the fact that he was at that time insane, so that his attempted contract of surrender and cancellation was void. It is further alleged that Elizabeth Kevan, as beneficiary, has assigned her rights under the policy to herself as administratrix.

In its demurrer defendant alleges, among other things, (a) that the plaintiff does not have legal capacity to sue and to maintain this action and that (b) the petition does not state facts sufficient to constitute a cause of action.

It is quite clear and indeed at the oral argument was admitted by plaintiff's counsel that no cause of action is stated in the plaintiff unless in her capacity as administratrix she could take and sue upon an assignment of the right of action, if any, which she had in her capacity as beneficiary.

The rights and duties of an administrator are fixed by statute. The applicable Missouri statute is section 94, R. S. Mo. 1929 (Mo. St. Ann. § 94), which is: "Executors and administrators shall collect all money and debts of every kind due to the deceased, and give receipts and discharges therefor, and shall commence and prosecute all actions which may be maintained and are necessary in the course of his administration, and defend all such as are brought against him."

This statute confers no authority upon an administrator to take assignments of causes of action nor to prosecute such causes of action after they have been assigned. Under the allegations of the petition all rights, if any, against the defendant under the policy involved are in the beneficiary named in that policy. Any right of action that may exist in the beneficiary is no part of the estate of Kevan of which the plaintiff is administratrix. Such a right of action is quite as far removed from that estate as if it were a right of action on a promissory note given by John Doe to Richard Roe. While that could be assigned to any individual, obviously it could not be assigned to the administrator of some estate in his official capacity and obviously if it were so assigned, having no connection whatever with the estate, the administrator could not sue upon it.

It was stated in the oral argument by plaintiff's counsel that under the true facts of the situation (although not under the facts alleged) the plaintiff in her individual capacity had surrendered all her rights as beneficiary and that since on that account there was no beneficiary at the time of the death of the insured by the terms of the policy the rights under it are vested in the estate of the insured. So that it is possible that an amended petition stating the true facts might show a cause of action in the plaintiff as administratrix, provided, otherwise, a cause of action has been stated.

2. The second contention made by defendant is that no cause of action is stated in that plaintiff affirmatively pleads that the insured contracted with the defendant that his policy should be surrendered and canceled and that no cause of action at law can be stated until in an equitable proceeding that contract of cancellation and surrender has been set aside. It is urged that in Missouri a contract entered into by an insane person (unless there has been an adjudication of insanity) is not void, but only voidable (Doty v. Mumma, 305 Mo. 188, 264 S. W. 656, 34 A. L. R. 1399; Jamison v. Culligan, 151 Mo. 410, 52 S. W. 224; Rhoades v. Fuller, 139 Mo. 179, 40 S. W. 760; Blount v. Spratt, 113 Mo. 48, 20 S. W. 967), and that, therefore, a mere allegation (as in this petition) of insanity is insufficient to support a conclusion that such a contract is void, a conclusion essential to a cause of action at law such as is sought to be stated here. Replying to this contention plaintiff's counsel says that while it is true that in Missouri law the contract of an insane person is only voidable and not void (absent an adjudication of insanity), the federal rule is otherwise. The federal rule is, so plaintiff's counsel urges, that the contract of an insane person is absolutely void.

I do not find a single federal appellate court decision announcing the rule that contracts generally entered into by insane persons, not adjudicated insane, are absolutely void. Only two appellate decisions have been cited which have any relevancy whatever to the question. They are Dexter v. Hall, 15 Wall. 9, 21 L. Ed. 73, and Plaster v. Rigney (8 C. C. A.) 97 F. 12.

All that is ruled in Dexter v. Hall is that a power of attorney given by an insane person is void. Whether the insane person who had given the power of attorney involved in that case had been adjudicated insane does not appear from the statement of facts. It does appear, however, that he had been "sent to a lunatic asylum" and that he had executed the power of attorney while an inmate of that institution. No reference is made in the opinion to any local California law (the case came to the Supreme Court from California) on the subject of the validity of the contracts of insane persons. The reasonable inference to be drawn from the briefs of counsel reported with the case, as well as from the opinion, is that there was no such local California rule.

While it is true that the reasoning given by the court, in support of the conclusion that a power of attorney executed by an insane person is void, would seem to be equally applicable to any contract of an insane person, the reference in the opinion to contracts generally clearly is dictum. The only thing decided by the case is that a power of attorney executed by an insane person is void. And even as to that the application of the rule stated by the court must be considered to be limited by the facts of the case, especially including the fact that the insane person there had been committed to an asylum and that no local rule had been established in California,...