Morgan v. Penn Mut. Life Ins. Co.

Decision Date29 January 1938
Docket NumberNo. 10997.,10997.
Citation94 F.2d 129
PartiesMORGAN v. PENN MUT. LIFE INS. CO.
CourtU.S. Court of Appeals — Eighth Circuit

Edward D'Arcy of St. Louis, Mo., for appellant.

James C. Jones, Jr., of St. Louis, Mo. (James C. Jones and Lon O. Hocker, both of St. Louis, Mo., John M. Huebner, of Philadelphia, Pa., and Jones, Hocker, Gladney & Grand, of St. Louis, Mo., on the brief), for appellee.

Before STONE, GARDNER, and THOMAS, Circuit Judges.

GARDNER, Circuit Judge.

This was an action brought by appellant as plaintiff below to recover on a policy of life insurance issued by appellee to her father, Arthur E. Bingham, and in which she was named as beneficiary. The petition was in conventional form. The answer admitted the execution and delivery of the policy, the death of the insured, and the making of proper proof of death, but alleged that the policy contained provision that the insured should have full power to change the beneficiary, and that the insured, in consideration of the payment to him of $9,234.44, surrendered to the insurance company "that portion of the policy or combination annuity bond under which the defendant agreed, upon the death of the said Arthur E. Bingham, to pay to the plaintiff the sum of $15,000.00," and hence at the time of his death the policy was no longer in effect, but had been surrendered up and canceled.

The action was tried upon an agreed statement of facts. At the close of the evidence, each of the parties moved for a directed verdict. The request for a directed verdict by plaintiff was overruled, and that of the defendant was sustained. Judgment was accordingly entered, dismissing plaintiff's action on the merits, and from the judgment thus entered appellant prosecutes this appeal. We shall refer to the parties as they were designated in the lower court.

The sole question presented is whether the court erred in granting defendant's motion for a directed verdict. Both parties having moved for a directed verdict, the question on appeal is whether the verdict as directed is sustained by substantial evidence.

On July 17, 1903, defendant issued and delivered to Arthur E. Bingham, plaintiff's father, its policy of combination annuity bond, under which, at death, benefits were made payable to plaintiff in the principal sum of $15,000. The policy also provided for payment to the insured during his lifetime of a certain annuity. The policy contained a clause authorizing the insured to change the beneficiary; in fact, the insured, in his application, which was attached to and made a part of the policy, reserved this right. In this regard the policy provided as follows: "Arthur E. Bingham, the insured, shall have full power while this policy is in force and not previously assigned, to name a new payee to receive in place of Madeline, his daughter, the instalments as they fall due hereunder, which by the terms of this contract are now payable to her, such change shall be made by instrument in writing and shall take effect only upon its endorsement upon the policy by the Company at its Home Office."

The policy contained a table of loan values available to the insured upon an assignment by him of the policy to the company as collateral security.

The policy was issued for a single premium paid by the insured at the time in the amount of $16,322.59. It should also be observed that the policy in fact embodied three contracts: (1) An annuity of $600, payable to Arthur E. Bingham in quarter annual installments of $150 each during his lifetime; (2) a contract of life insurance in which the company agreed to pay the sum of $15,000 to the plaintiff as beneficiary upon the death of the insured; and (3) an agreement for a deferred annuity if the plaintiff should live to receive the 100 quarterly installments provided for under the life insurance benefit.

In June, 1934, the insured, after some negotiations and correspondence between himself and the insurance company, surrendered the life insurance benefit of the policy in consideration of the payment to him of $9,234.44, and on September 7, 1934, in connection with this settlement, he executed the following written agreement:

"I hereby surrender to The Penn Mutual Life Insurance Company of Philadelphia, Pennsylvania, all right, title and interest in the Single Payment Life portion of the above policy for a cash value of $9,234.44 * * * to be paid to the undersigned in cash.

"In this transaction the said Policy is to be returned to the said Company for endorsement showing the surrender of the above (for) $9,234.44 and the Annuity Bond portion of the policy is to be continued, paying quarterly instalments due the first of July, October, January and April of $150.00 each, to Arthur E. Bingham (the annuitant) during his lifetime; and the Continuous Instalments will be payable quarterly for $150.00 each, commencing 25 years after the death of Arthur E. Bingham (the insured), provided Madeline B. Morgan, the beneficiary, be then living."

The insurance company paid the insured the agreed sum of $9,234.44 and placed an endorsement on the policy of the surrender of the life insurance benefit to the company in consideration of this payment, which was the full amount of the reserve on the life insurance benefit of the policy at the date of its surrender.

The plaintiff did not know of the surrender of the life insurance benefit until after the death of the insured, and, of course, did not consent to nor approve the same. The insured died March 20, 1935.

As has been observed, the policy reserved to the insured the right to change the beneficiary, and it also reserved to him the right of assignment. There is no claim that the plaintiff as beneficiary, with the knowledge of the company or otherwise, paid any part of the premium, nor that by contract with the insured she had acquired a vested right in the insurance policy with knowledge of the company. Where no right is reserved in the policy to change the beneficiary without his consent, the policy confers immediately upon its issue a vested right in the beneficiary that cannot be defeated by assignment or transfer without his consent, but it is...

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13 cases
  • General American Life Insurance Company v. Cole
    • United States
    • U.S. District Court — Eastern District of Missouri
    • 31 Mayo 1961
    ...v. Prudential Ins. Co., Mo., 233 S.W.2d 729, 732; Robinson v. New York Life Ins. Co., 168 Mo.App. 259, 153 S.W. 534; Morgan v. Penn Mut. Life Ins. Co., 8 Cir., 94 F.2d 129. As to the Duerbeck claim, the lessons of the law are likewise simple. Her claim is based upon fraud. Fraud is never pr......
  • Phoenix Mut. Life Ins. Co. v. Cummings, 493.
    • United States
    • U.S. District Court — Western District of Missouri
    • 5 Agosto 1946
    ...the policy, the beneficiary, so far as the policy contract is concerned, has only a contingent interest therein. Morgan v. Penn Mutual Life Ins. Co., 8 Cir., 94 F.2d 129; Fendler v. Roy, 331 Mo. 1083, 58 S.W.2d 459, loc. cit. 464; McKinney v. Fidelity Mutual Life Ins. Co., 270 Mo. 305, 193 ......
  • Schongalla v. Hickey
    • United States
    • U.S. District Court — Northern District of New York
    • 20 Marzo 1944
    ...interest in a life insurance policy without his consent where the right to change the beneficiary is not reserved. Morgan v. Penn. Mut. Life Ins. Co., 8 Cir., 94 F.2d 129; Davis v. Modern Industrial Bank 279 N.Y. 405 at page 409, 18 N.E.2d 639, 135 A.L.R. Here prior to the attachment of the......
  • Western Life Insurance Company v. Bower
    • United States
    • U.S. District Court — District of Montana
    • 15 Julio 1957
    ...named in the policy has a mere expectancy and no vested right or interest therein during the life of the insured. Morgan v. Penn Mut. Life Ins. Co., 8 Cir., 1938, 94 F.2d 129; Doering v. Buechler, 8 Cir., 1945, 146 F.2d 784; 46 C.J.S. Insurance § 1173 b (2), p. 62. This rule is subject, how......
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