Minnesota Mut. Life Ins. Co. v. Manthei

• Decision Date: 19 June 1945
• Docket Number: No. 26698.,26698.
• Parties: MINNESOTA MUT. LIFE INS. CO. v. MANTHEI et al.
• Court: Missouri Court of Appeals

189 S.W.2d 144

MINNESOTA MUT. LIFE INS. CO. v. MANTHEI et al.

No. 26698.

St. Louis Court of Appeals. Missouri.

June 19, 1945.

Rehearing Denied September 7, 1945.

Appeal from St. Louis Circuit Court; Edward M. Ruddy, Judge.

"Not to be reported in State Reports."

Suit in interpleader by the Minnesota Mutual Life Insurance Company against Eina Manthei and Joseph H. Dreher for adjudication of defendants' conflicting claims to the proceeds of a life insurance policy. From a judgment for defendant Dreher, defendant Manthei appeals.

Affirmed.

Michael J. Doherty, of St. Louis, for appellant.

Mat J. Holland and N. E. Lurton, both of St. Louis, for respondent Joseph H. Dreher.

BENNICK, Commissioner.

This is a suit in interpleader which was brought by The Minnesota Mutual Life Insurance Company for the purpose of having an adjudication as between two conflicting claims to the proceeds of a policy of life insurance which it had issued upon the life of one Richard Manthei, who died on September 20, 1940.

The respective claimants are Edna Manthei, the widow of the insured and the named beneficiary under the policy, and Joseph H. Dreher, the assignee of the policy.

While the policy had been issued for the face amount of $5,000, the deduction of the amount of a loan with accrued interest had reduced the proceeds to the sum of $4,759.87, which sum plaintiff tendered into court with its prayer that the defendant claimants be required to interplead with one another in order to determine which one of them was entitled to receive payment of the same.

The court sustained the interpleader; and upon a trial of the issues as between Edna Manthei and Joseph H. Dreher, caused a decree to be entered in Dreher's favor. Defendant Edna Manthei thereupon filed her motion for a new trial; and this being overruled, her appeal to this court has followed in the proper course.

The facts and circumstances giving rise to the controversy grow out of the business relationships of Dreher and the insured in connection with the operations of the Huebschen Grocery Company of which both men were officers. The company was organized as a corporation with 200 shares of outstanding stock, of which the insured owned 134 shares. Dreher held 65 shares under option to purchase from Marie Huebschen, the former president of the company, while a single qualifying share was owned by one Charles Vogel, the brother of Edna Manthei, the wife of the insured.

From time to time the company became in need of funds for the prosecution of its business, and on numerous occasions between 1934 and 1936, inclusive, Dreher made substantial cash advancements which were evidenced in each instance by the company's note made payable on demand. All of the money which Dreher thus advanced was from his own personal resources except for some $2,500 which he secured from his brother, Reverend George Dreher, and then turned into the business on his own account.

In all there was a total of five of such notes covering the several advancements which Dreher had made. The first of the notes was for $1,850; was dated December 3, 1934; was executed by the company by the insured as vice-president; and bore the personal indorsement of Marie Huebschen, the then president of the company. The second note was for the sum of $1,400; was dated March 7, 1936; was executed by the company by the insured as vice-president; and bore the insured's personal indorsement on the back. The third note was likewise for the sum of $1,400; was dated April 1, 1936; was executed by the company by the insured as vice-president; and likewise bore the insured's personal indorsement on the back. The fourth note was for $2,000; was dated May 26, 1936; was executed by the company by Dreher himself as secretary; and bore the personal indorsements of both Dreher and the insured. All of the notes were made payable to Dreher except for such fourth note in which his brother, Reverend George Dreher, was designated as payee. Dreher claimed, however, that the note nevertheless belonged to him, and accounted for the designation of his brother as payee upon the ground that the note evidenced an advancement of $2,000 which he had obtained from his brother at that particular time for use in the company's business. Corroborating his testimony in this respect was the fact that the books of the company purported to list this note, along with the other notes, as being a debt due to Dreher rather than his brother. The fifth note was for $1,800; was dated August 8, 1936; was executed by the company by Dreher himself as secretary; and bore no indorsements on the back.

Dreher testified that in making the advancements to the company, it had at all times been understood between him and the insured that the latter would be personally responsible to him for any advancements he might make, or, as he elsewhere put it, that the insured would personally guarantee any obligation which the company might assume. This understanding between the two may likely account for the fact that three of the five corporate notes bore the insured's personal indorsement on the back. The indorsements were in each instance in blank, however, with no indication by appropriate words of the insured's intention to be bound in any other capacity than that of an indorser of the notes.

The insured, as well as Dreher, had made advancements to the company; and in the summer of 1939 it was agreed between them that a summary should be made of their respective accounts with the company and with each other, and that the insured and his wife, Edna Manthei, should execute their note for whatever balance was shown to exist in Dreher's favor. Dreher thereupon listed the aggregate of the five corporate notes for the advancements he had made to the company; added accrued interest on all the notes; deducted a payment of $500 which he had theretofore received from the company; deducted an amount of $1,319.90 representing the principal and interest on the advancements which the insured had made to the company; and then deducted his own personal indebtedness to the insured in the sum of $275 with accrued interest, leaving a balance in his favor of $7,289.65.

Dreher testified that in compliance with the agreement which had been entered into respecting the settling of the accounts, the insured and his wife thereupon executed a note in his favor for the face amount of $7,289.65, the note being dated July 1, 1939, and being made to mature six months after date. While Edna Manthei denied that she herself had signed such a note, the surrounding facts and circumstances tend strongly to support Dreher's version of the facts; and her own testimony denying the execution of the note may very well be explained and excused upon the ground of forgetfulness or mistake. She knew nothing whatever of the company's affairs, nor did she participate in the transactions between Dreher and her husband; and whenever she was asked to sign an instrument, it was merely at her husband's direction, and without any question on her part regarding the purpose to be served.

The note thus executed was not paid at maturity, and on January 2, 1940, the insured and his wife executed a renewal note in Dreher's favor for the face amount of $7,435.44, representing the principal of the former note with accrued interest at maturity. The execution of the latter note by herself and her husband was expressly admitted by Edna Manthei. It likewise was made to mature six months after date, and bore interest at the rate of four per cent per annum as had the former note.

When introduced as one of Dreher's exhibits at the trial, the note bore two indorsements, the one a special indorsement of Dreher himself, and the other the blank indorsement of his brother, Reverend George Dreher. The special indorsement over Dreher's own signature provided that "for value received I am herewith waiving my interest in this note to George Dreher covering advancements made to me and the Huebschen Gro. Co.". Dreher testified, however, that notwithstanding such special indorsement, he had at all times retained possession of the note as his own, and that he had placed such indorsement on the note as an instruction to his wife that in the event of his death she should see that his brother, Reverend George Dreher, was repaid the sum of approximately $2,500 which he had advanced to Dreher for the use of the company. The note was of course for a far greater sum than the amount of his brother's advancements, but Dreher had felt that his brother could be trusted to retain only so much of the proceeds as would repay him for what he had advanced, and then turn over whatever remained to Dreher's wife and children. The special indorsement had evidently been placed on the note shortly after its execution on January 2, 1940. Reverend George Dreher's blank indorsement immediately underneath Dreher's own signature was placed on the note around the following September, and was made, so Dreher testified, in order "to put the note back into the position in which it was".

The significance of all this evidence was upon the disputed question of whether the note had actually belonged to Dreher or to his brother, Reverend George Dreher. As opposed to Dreher's contention that the note had belonged to him, Edna Manthei testified that on two occasions after she had been served with summons in the instant case, she was approached by Reverend George Dreher, who informed her that he held notes which she had executed for more than the sum of $7,500 which the company owed him, and then threatened that if she did not release the policy on her deceased husband's life, he would file suit and take the business away from her.

The question of the release of the policy grew out of its assignment to Dreher by the insured and his wife and their subsequent attempt to revoke the assignment.

It will be recalled that the proceeds of the policy constitute the fund for which...