Leimer v. State Mut. Life Assur. Co.

Decision Date05 January 1940
Docket NumberNo. 11515.,11515.
CourtU.S. Court of Appeals — Eighth Circuit

Walter A. Leimer, of Kansas City, Mo., for appellant.

Horace F. Blackwell, Jr., and Richard S. Righter, both of Kansas City, Mo. (Thorne Caldwell, of Worcester, Mass., and Lathrop, Crane, Reynolds, Sawyer & Mersereau, of Kansas City, Mo., on the brief), for appellee.

Before STONE, SANBORN, and THOMAS, Circuit Judges.

SANBORN, Circuit Judge.

This is an appeal from a judgment dismissing plaintiff's (appellant's) amended complaint for failure to state a claim upon which relief could be granted.

Reduced to its simplest terms, the claim which the plaintiff states in her amended complaint is: That she is the widow of Herman Loewer, who died November 30, 1928; that at the time of his death he was the insured under four policies of life insurance issued by defendant (appellee), which were in full force; that plaintiff and her daughter were the beneficiaries named in the policies, and that upon the death of the insured, plaintiff became entitled to one-half of the proceeds of the policies; that she furnished to defendant the necessary proofs of death, and demanded her share of the proceeds of the policies, but that defendant has wrongfully withheld the same from her. There are other matters alleged, apparently in anticipation of the defense which the defendant is expected to make. Some of the statements relative to such matters are pure conclusions of law, while some relate to facts and indicate that the actual controversy between the parties is probably over the right of defendant to hold the proceeds of the policies in trust in accordance with a "non-negotiable certificate of indebtedness" executed by defendant on December 24, 1928, which by reference is made a part of the amended complaint. This certificate recites that, in consideration of the surrender, for cancellation, of the policies in suit and other policies, the defendant, in accordance with the terms and conditions thereof, agrees to retain the proceeds and to pay certain guaranteed interest thereon and income therefrom to the plaintiff and her co-beneficiary during life and to pay one-half of the principal sum retained to the executor or administrator of each of the beneficiaries upon her death. This certificate is signed by the defendant alone. The amended complaint does not show that plaintiff agreed to this arrangement, and it does not show that the arrangement was in accordance with the terms and conditions of the policies in suit, except as that may be inferred from the recitals of the certificate. The plaintiff asserts that the arrangement was unlawful and fraudulent and the result of a scheme of the defendant to constitute itself trustee of the proceeds of the policies in fraud of plaintiff and in derogation of her marital rights under the laws of Missouri. Judgment is demanded against the defendant for one-half of the proceeds of the policies, with interest, attorney's fees and costs, and for the invalidation of the trust arrangement pursuant to which the plaintiff's share of the proceeds is retained by defendant.

Counsel for defendant and the court below apparently misconceived the purpose and effect of defendant's motion to dismiss the amended complaint. They were seemingly concerned with the question whether the plaintiff had a meritorious claim upon which she was entitled ultimately to prevail, rather than with the sole question presented, which was whether the amended complaint, construed in the light most favorable to the plaintiff and with all doubts resolved in favor of its sufficiency, stated a claim upon which relief could be granted. The lower court, in its opinion stating its reasons for sustaining defendant's motion to dismiss the amended bill of complaint, says:

"Upon re-examination of the pleadings and briefs I find the facts to be substantially as follows:

"* * * the plaintiff and her daughter were not at the death of the insured entitled to receive the full amount of the benefits promised in the contracts of insurance. It was apparently provided in the policies that the beneficiaries should be paid monthly installments on the proceeds of the policies at an interest rate of 3%. This is confirmed by the fact that on December 24, 1928, and after the death of the insured on November 30, 1928, the defendant issued to the beneficiaries its contract designated as `Non-Negotiable Certificate of Indebtedness Number 199.'"

The court then ruled that plaintiff, having accepted the arrangement "apparently provided in the policies" and having enjoyed its benefits for ten years, is in no position to contest "the terms of the policies long since surrendered and cancelled." It also ruled that the arrangement did not infringe the marital rights of the plaintiff and that her laches barred her claims of alleged fraud in connection with the issuance of the certificate of indebtedness by defendant. It further ruled that "upon the pleadings" the court could not, as prayed by the plaintiff, declare that the attempt of defendant to create a trust and to withhold her share of the proceeds of the policies was void, and stated that the policies provided that the beneficiaries should receive only monthly installments of interest during life.

The amended complaint, as contained in the record on appeal, fails to disclose whether the trust arrangement evidenced by the "non-negotiable certificate of indebtedness" was or was not in accordance with the terms of the policies in suit. It does not disclose what the exact provisions of the policies were with regard to the payment of the proceeds, but asserts that, upon the death of the insured, the plaintiff was entitled to one-half thereof.

That plaintiff's claim is barred by estoppel and laches, which are ordinarily matters of defense, does not conclusively appear from the facts stated in the amended complaint. There is no basis for concluding from what is stated that defendant has been misled by plaintiff to its damage. It could hardly have been misled by her if its own policies prohibited the trust arrangement which was made or if that arrangement was unlawful or resulted from its own fraud. Its certificate of indebtedness shows that...

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