Klebba v. Struempf

• Decision Date: 06 January 1930
• Docket Number: No. 16747.,16747.
• Citation: 23 S.W.2d 205
• Court: Missouri Court of Appeals
• Parties: ADOLPH KLEBBA, RESPONDENT, v. HENRY F. STRUEMPF, APPELLANT.<SMALL><SUP>*</SUP></SMALL>

23 S.W.2d 205

ADOLPH KLEBBA, RESPONDENT, v. HENRY F. STRUEMPF, APPELLANT.^*

No. 16747.

Kansas City Court of Appeals. Missouri.

January 6, 1930.

Appeal from Circuit Court of Osage County. — Hon. Ransom A. Breuer, Judge.

REVERSED AND REMANDED.

John P. Peters and E.M. Zevely for respondent.

Irwin & Bushman for appellant.

BARNETT, C.

This is a suit in equity whereby plaintiff sought a decree declaring defendant to be a trustee for the benefit of plaintiff of the proceeds of four policies of insurance so far as those proceeds were necessary to satisfy a note with interest thereon. One Jake Struempf held four policies of insurance in an insurance company doing business on the assessment plan, under which policies $2000 was due at the time of his death. The policies had no cash, loan, or surrender value. The assured had executed a note to plaintiff and on November 28, 1927, he executed and delivered to the plaintiff a written assignment which recited that he pledged to the plaintiff a certain life insurance policy in the Capital Mutual Insurance Association of Jefferson City for the sum of $4000 on the life of Jake Struempf, said policy being dated March, 1926, and payable to his estate. It was recited that the pledge was made to secure to plaintiff the payment of said note, the amount of which he consented should be a lien upon his policy if still unpaid "and will be payable out of the proceeds of the said policy if still unpaid upon the death of said Jake Struempf with six per cent interest per annum compounded." The plaintiff did not take possession of any policy and did not notify the insurance company of the assignment.

The evidence showed that in the fall of 1927 Jake Struempf went to the house of the defendant, his brother. At that time he was fifty-one years old, one leg was crippled by erysipelas and he was blind in one eye. The defendant testified, without objection, that at that time the assured told his brother that his leg hurt him so badly that he could not do much farm work, and if he couldn't get a home anywhere he would have to go to the poorhouse. The assured had been doing farm work previous to this time. The brother said: "No, I won't let you go to the poorhouse. If you want a home I will give you a room and you can come there anytime you have no work and make your home there." After the assured had stayed at his brother's house for about three weeks he told his brother that if he would give assured a home he would make his brother beneficiary of the insurance. To this the defendant agreed. Then one day the defendant went to the assured and said: "I am going to Jef, if you want me to, I'll change those policies." The assured agreed. Defendant took the policies to the insurance agent and requested the change in beneficiary. The agent gave him a written request for the change in beneficiary to be signed by the assured. This was taken back and the assured signed it, in the presence of a witness; at which time, according to the testimony of the witness to the direction to change the beneficiary, defendant, in the presence of the assured, said: "That was for his home." The assured did not say anything about the reason for the assignment. The evidence showed that after this assignment was made four premiums or assessments came due, all of which were paid by the defendant, amounting to $15.96. Defendant testified that he had no knowledge of the assignment to plaintiff and that he would not have offered his brother a home and would not have given him a home had he known there was any claim upon the policies; and then said: "Well, I had to have a little something to pay for it."

In the following spring a pimple appeared upon the assured's neck. He became sick and sat behind the stove in a rocking chair for about two weeks. The pimple developed into a carbuncle and he was then taken to a hospital, and after remaining there for four days he died on May 18, 1928. Defendant testified that he paid the doctor's bill, the hospital bill, the nurse's bill and the funeral expenses. The plaintiff testified that when the assured was in the hospital he met the defendant and asked him, "Is Jake worse?" The defendant said that he was and that he had received a phone call to come back to the hospital; that the defendant then asked the plaintiff whether his brother had paid anything on his debt: that the plaintiff said "No" and defendant asked: "Hasn't he paid any interest?" Plaintiff said: "No, he hasn't paid no interest, I expect he kept up the payments on his policy;" that defendant said "Yes," and that was all that was said. Defendant testified that he had no conversation about the debt until after his brother was buried.

The insurance company, disregarding the assignment to the plaintiff, paid the sum of $2000 to the defendant who was named as beneficiary in the policies.

The trial court entered a decree for plaintiff which contained a finding of fact that the assured on the 28th day of November, 1927, without the knowledge or consent of the plaintiff and without consideration, changed the beneficiary in his benefit certificates from that of his estate to that of Henry F. Struempf, brother, and that out of the $2000 received by the defendant as the proceeds of the insurance he had paid the expenses of the last illness and funeral of the assured in the sum of approximately $300. A motion for new trial was filed and overruled and defendant has appealed.

OPINION.

The rule for the protection of assignees in good faith and for value which was recognized by the law merchant and which has been preserved by our Negotiable Instruments Act, and which is the spirit of the recording acts, was always recognized by courts of equity and applied to transaction that had nothing to do with negotiable instruments or the conveyance of real estate. Thus, under the maxium, "equity aids the vigilant, not those who sleep on on their rights," it has been held that a court of equity will protect one who by superior diligence has obtained a legal advantage, and will deny relief to one whose damage was created by his own neglect. [21 C.J. 193.] Under the maxim, "between equal equities the first in order of time shall prevail," it has been held that it is only where equities are equal that the element of time becomes material and decisive as to priority of rights. Where the respective equities are not equal, the stronger or more meritorious one will prevail, regardless of which accrued first in order of time. [21 C.J. 210.] The doctrine of laches will prevent relief to one who has stood idly by with knowledge of his rights and allowed the situation to so change that it would be an injustice to others to grant the relief that was tardily sought. It was early established that where one of two innocent persons must suffer the burden must be borne by him whose neglect created the situation. Equity will not hold to be good that which is insufficient at law if, to do so, the consequences of a man's negligence must be visited upon another.

The respondent claims that the assignment in this case was a good equitable assignment, even though no notice of the assignment was given to the insurance company, and even though the plaintiff neglected to take possession of the policies and neglected to have the beneficiary changed therein, and neglected to have the assignment endorsed on the...