McDonald v. McDonald

• Decision Date: 30 October 1924
• Docket Number: 6 Div. 148
• Citation: 102 So. 38,212 Ala. 137
• Parties: McDONALD et al. v. McDONALD.
• Court: Alabama Supreme Court

102 So. 38

212 Ala. 137

McDONALD et al. v. McDONALD.

6 Div. 148

Supreme Court of Alabama

October 30, 1924

Rehearing Denied Nov. 20, 1924

Appeal from Circuit Court, Jefferson County; John Denson, Judge.

Suit on policy of life insurance by Emma C. McDonald against the Fidelity Mutual Life Insurance Company, with interpleader by defendant, and Kenneth M. McDonald and Aleta McDonald Berry interpose as claimants. From a judgment for plaintiff claimants appeal. Reversed and remanded.

Black Harris & Foster, of Birmingham, for appellants.

Harsh Harsh & Harsh and Frank S. White & Sons, all of Birmingham, for appellee.

SAYRE J.

Appellee brought her action at law against the Fidelity Mutual Life Insurance Company on a policy of life insurance. The insured was plaintiff's (appellee's) husband at the time of his death; but she was his second wife, and the policy had been purchased during the life of the first wife who was then named therein as beneficiary. It provided as follows:

"The insured, upon presentation of this policy for proper indorsement, may, with the written approval of the president or vice president, and while this policy is in force, change the beneficiary hereof. Such change shall take effect upon the indorsement of the same on the policy by the company."

In pursuance of this provision, after the death of the first wife and after the marriage of plaintiff and the insured, the policy was changed and plaintiff was named therein as sole beneficiary, and so the policy read at the death of insured. Meantime insured and appellee, his second wife, became estranged, separated, and at the time of his death his bill for divorce and her claim for alimony were pending. In the meantime, also, insured notified the company of his desire and intention to have the names of his son and daughter by his first wife substituted in the policy as beneficiaries and by his attorneys requested--such is the effect of his communication to the company--that the change be made, but was unable to present the policy for the company's indorsement to that effect, because it was in the possession of the plaintiff in this cause, and it was therefore impossible for him to present the policy to the company. To this, so far as appears by the record, the company made no response; and so the policy remained without further change until the death of insured some months afterward. Before issue joined in plaintiff's suit, defendant insurance company filed an interpleader suggesting that Kenneth M. McDonald and Aleta McDonald Berry, son and daughter of insured, individually and as administrator and administratrix of his estate, claimed the money due on the policy, and paid the amount thereof into court with a prayer that said claimants be given notice, and that it be discharged of all further liability in the premises. Claimants interposed their claim in two aspects, to wit: They claimed the fund in court as beneficiaries under the policy; they claimed it "as executors of the will of Thomas C. McDonald, deceased," alleging themselves to have been so appointed by the probate court of Jefferson county. Plaintiff demurred to each claim, alleging various and sundry objections thereto, after which claimants moved the court to make an order transferring the cause to the equity side of the court for further consideration. Plaintiff's demurrer was sustained, the motion to transfer the cause was overruled, and, claimants having nothing further to say, judgment was rendered for plaintiff. Claimants, individually and as executors, have appealed.

The facts have been stated as they appear in the pleadings. If it appeared from the pleadings that a case proper for interpleader was not presented--which is to say that the interpleader conferred no jurisdiction on the court--or that clearly plaintiff was entitled to the fund, there was, after claimants declined to plead further, no course open to the court but to render judgment for the plaintiff.

In limine appellee (plaintiff) insists that the pleadings made no proper case for interpleader because the statute does not authorize the substitution of more than one claimant, and it is suggested that the language of the statute (section 6050 of the Code of 1907), only authorizes a defendant to make affidavit "that a person *** claims the money in controversy" and provides means of bringing in "such person." To this objection the first section of the Code provides a sufficient answer: "The singular includes the plural." But it is urged that, if as many as two intervening claimants are authorized under the statute, there may as well be a dozen, and it is said, obviously, endless confusion would follow in a trial by jury where a plurality of claims are presented, and so that the right of trial by jury would be seriously impaired. In the first place this proceeding is an innovation upon the common law, and, no provision for trial by jury being expressed, it may safely be denied that the right exists. 15 R.C.L. 237, § 19; Clark v. Mosher, 107 N.Y. 118, 14 N.E. 96, 1 Am.St.Rep. 798, note 801. But aside from this, appellee's suggestion, in the form given it, is arbitrary and devoid of merit. There is no like suggestion in the authorities on the subject. The statute provides a short method of accomplishing the purposes of a bill of interpleader in equity, and applies when the facts would authorize relief in equity. Stewart v. Sample, 168 Ala. 274, 53 So. 182, and cases there cited. One essential condition of a bill of interpleader is that all adverse titles or claims must be dependent or derived from a common source. Id. There must be privity of some sort between all the parties, and the claims should be of the same nature and character. 15 R.C.L. 224. "In cases of adverse independent titles or demands, not derived from a common source, but each asserted as wholly paramount to the other, the party holding the fund or other thing in dispute must defend himself as well as he can against each separate demand, and a court of equity will not grant him relief on a bill of interpleader." 15 R.C.L. 224. So this court held in the early case of Gibson v. Goldthwaite, 7 Ala. 281, 42 Am.Dec. 592. It is said in the more recent authorities to be "questionable, however, whether the doctrine of privity, commonly recognized in respect of bills of interpleader applies to the statutory interpleader." Northwestern Ins. Co. v. Kidder, 162 Ind. 382, 70 N.E. 489, 66 L.R.A. 89, 1 Ann.Cas. note p. 513; 15 R.C.L. 236. However that may be, this requirement is not offended against in the present case. There are two claimants, and they claim alternatively--such is the effect of the two claims filed--as individuals and as executors of the insured; but each claim in the same right as the other; they claim in a common right under the policy issued by defendant on the life of T.C. McDonald.

Nor do the pleadings show that the claims of the substituted defendants arose out of any wrong of the original defendant, in which event interpleader would not be allowed. The pleadings disclose that the controversy has arisen out of the fact that the insured was unable to procure the substitution of the names of his children, the claimants, by reason of the fact that plaintiff had possession of the policy, whereas, for aught appearing, insured was entitled to such possession. This was no fault of original defendant which then had a right under its contract, reasonably construed, to insist upon the production of the policy, or, according to the authorities to which we shall refer, a showing that such production was without the power of insured, as a condition to a formal change of beneficiary--this to save itself perchance from the annoyance of such complications as have arisen in this case.

The trial court appears to have proceeded upon the theory that, since the policy at the death of insured in terms and on its face was payable to appellee, the definitely expressed will of insured that appellants be substituted as beneficiaries--of which the insurance company had formal notice, though the policy was not produced--availed nothing, and the contract of insurance remained in legal effect unchanged. In this we think the court erred.

In the first place, had the contract been changed for the benefit of appellants in such sort that a court of equity would recognize and enforce their rights? It may be conceded that the insurance company had a right to stand upon the letter of its contract so far as the provisions thereof affected its interests until a change was made according to the method stipulated in the policy or until proof was forthcoming that it was without the power of the insured to comply in some respects with its stipulations. The provisions of the policy requiring presentation of the policy, the consent of the company to a change of beneficiary, and that such change should take effect upon the indorsement of the same on the policy by the company, might, as matter of course, to the extent they affected its interests, be waived, and were waived when the defendant company brought the fund into court for an adjudication between the plaintiff and appellants as to the merits of their respective claims. These propositions are fully sustained by the authorities cited in appellants' brief. Knights of Maccabees v. Sackett, 34 Mont. 357, 86 P. 423, 115 Am.St.Rep. 532; John Hancock Mutual Life Ins. Co. v. Bedford, 36 R.I. 116, 89 A. 154; O'Donnell v. Metropolitan Life Ins. Co., 11 Del.Ch. 4, 95 A. 289; Modern Brotherhood v. Matkovich, 56 Ind.App. 8, 104 N.E. 795; John Hancock Mutual Life Ins. Co. v. White, 20 R.I. 457, 40 A. 5. Others might be added. Thus on page 3772 of 4 Cooley's Briefs on Insurance it is said that:

"The rule requiring the surrender of the old certificate,

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