Lincoln Nat. Life Ins. Co. v. Pearman

• Decision Date: 29 July 1930
• Docket Number: No. 269.,269.
• Citation: 43 F.2d 163
• Parties: LINCOLN NAT. LIFE INS. CO. v. PEARMAN et al.
• Court: U.S. District Court — Western District of Missouri

43 F.2d 163 (1930)

LINCOLN NAT. LIFE INS. CO. v. PEARMAN et al.

No. 269.

District Court, W. D. Missouri, Central Division.

July 29, 1930.

Wm. C. Michaels and Meservey, Michaels, Blackmar, Newkirk & Eager, all of Kansas City, for plaintiff.

R. N. Klass, of Cedar Rapids, Iowa, Ruby M. Hulen, of Columbia, Mo., and Mosman, Rogers & Buzard, of Kansas City, Mo., for defendants other than Bass.

REEVES, District Judge.

All the defendants, except the defendant Andrew J. Bass, have moved for a dismissal of plaintiff's bill upon the several grounds that plaintiff "has a plain, adequate and complete remedy at law by presenting and offering its defense in said law action," and that there are no special circumstances to entitle the plaintiff to proceed in equity.

On April 7, 1930, plaintiff filed its bill in equity to cancel four policies of insurance aggregating the sum of $200,000. These policies had been issued on or about December 24, 1929, upon the life of one William Folta.

It is alleged in the bill, however, that the real name of the assured was Robert William Pearman, the deceased mentioned in the amended bill. The bill contains many allegations of fraud and deceit in the procurement of said insurance, perpetrated both by the insured and the assignee. It is alleged in the bill that concurrently with the delivery of the policies an assignment thereof was made to the defendant Andrew J. Bass. Subsequently William Folta or Robert William Pearman was killed. Thereupon, the alleged fraud was discovered by the plaintiff and it sought a cancellation of the policies.

In the original bill it named Bass the assignee and the wife and children of the deceased as defendants. As grounds for equitable cognizance, plaintiff alleged "that it believes that defendant Bass as said assignee and person interested in the estate of Robert William Pearman intend to bring one or more suits upon said policies of insurance and that plaintiff is in danger of being sued on said policies in different jurisdictions at remote times beyond the contestable period stipulated in said policies; that plaintiff has no adequate remedy at law; that the material witnesses in the case to prove the charges herein made are widely scattered and that plaintiff is in danger of losing said evidence if it should await an action or actions at law to be brought on said policies; that plaintiff does not know the whereabouts of said policies but believes them to be in the hands or under the control of defendant Bass, and plaintiff states that if said policies remain outstanding plaintiff is liable to be vexed with one or more suits based on said policies after the period of contest stipulated in said policy as aforesaid, has expired; that said policies were from their inception void as having been procured by fraud, and were, under the facts stated, issued under a mistake on the part of plaintiff, and that the minds of the parties never met, and that it would be inequitable to permit said policies or any of them to remain outstanding and uncancelled."

Said policies contained the usual incontestable clause after two years from date of issue.

After plaintiff filed its bill in equity and caused service of subpœnas in chancery upon the defendants, Maude Pearman, the wife of the deceased, was appointed administratrix of the estate of said deceased and instituted an action at law against the plaintiff on said policies. The plaintiff in this case, as the defendant in the law case, caused the law action to be removed to the federal court because of a diversity of citizenship. By an amended and supplemental bill plaintiff has made the plaintiff in the law case one of the defendants in this proceeding. It seeks by such amended bill to have the law case postponed to the disposition and final decree of this cause in equity.

The only point involved in the case is whether the plaintiff should be relegated to the law action for its defenses on the policy. The suit having been brought after the death of the insured and many months before the end of the contestable period, it is contended by said defendants that the case falls within the doctrine of Cable v. United States Life Ins. Co., 191 U. S. 288, 24 S. Ct. 74, 48 L. Ed. 188; Riggs v. Union Life Ins. Co., 129 F. 207; Mutual Life Ins. Co. v. Blair (C. C.) 130 F. 971; Schuermann v. Union Cent. Life Ins. Co., 165 Mo. 641, 65 S. W. 723; ...