Olsen v. Hawkins

• Decision Date: 22 November 1965
• Docket Number: No. 9490,9490
• Citation: 90 Idaho 28,408 P.2d 462
• Parties: Marvin F. OLSEN and Mercedes Olsen, Plaintiffs-Respondents, v. Charles E. HAWKINS and the Equitable Life Assurance Society of the United States, a corporation, Defendants, and Charles E. Hawkins, Appellant.
• Court: Idaho Supreme Court

Page 462

408 P.2d 462

90 Idaho 28

Marvin F. OLSEN and Mercedes Olsen, Plaintiffs-Respondents, v. Charles E. HAWKINS and the Equitable Life Assurance Society of the United States, a corporation, Defendants, and Charles E. Hawkins, Appellant.

No. 9490.

Supreme Court of Idaho.

Nov. 22, 1965.

Rehearing Denied Dec. 21, 1965.

Sharp, Anderson & Bush, Idaho Falls, for appellant.

McDevitt & McDevitt, Pocatello, for respondents.

KNUDSON, Justice.

Under date of January 1, 1953, Hobart A. Turner (hereinafter referred to as Turner), while an employee of the Union Pacific Railroad Company (hereinafter referred to as the Railroad), procured a life insurance policy upon his own life from defendant, The Equitable Life Assurance Society of the United States, in the amount of $3,500.00. Myrl L. Turner, his then wife, was named therein as beneficiary. Mrs. Turner died during 1956.

Under a written change of beneficiary which became effective January 9, 1957, respondents were designated as beneficiaries under the policy. Respondents are husband and wife and respondent Marvin F. Olsen was Turner's stepson. Thereafter and pursuant to the request of Turner, another written change of beneficiary was issued wherein Turner designated appellant Charles E. Hawkins as beneficiary under said policy effective as of March 17, 1960.

Turner died November 13, 1962. Respondents commenced this action seeking to recover the amount payable under the insurance policy. The trial court, sitting without a jury, concluded that the change of beneficiary executed in behalf of Charles E. Hawkins was made while the said Turner was incompetent and unable to transact his business or to understand the nature of the transaction, and was void. Appellant contends that there is no competent evidence to sustain the action of the trial court in so holding.

We approach this case with full recognition of the long established rule of this court that our province is to examine the record in the light most favorable to the judgment and that when findings of the trial court are supported by competent substantial evidence they are binding and conclusive on appeal. Summerfield v. Pringle, 65 Idaho 300, 144 P.2d 214; Shepard v. Smith, 74 Idaho 459, 263 P.2d 985; Dunclick, Inc. v. Utah-Idaho Concrete Pipe Co., 77 Idaho 499, 295 P.2d 700.

In order that respondents' contentions may be clearly understood, the following allegation is quoted from their complaint, to-wit:

'V.

'That thereafter and on or about March 17, 1960, while the said insured HOBART A. TURNER was under the effects of alcoholism and while the said HOBART A. TURNER was without control of his own faculties, and by fraud, misrepresentation and coercion, and with the promise of furnishing him a few dollars for the purpose of procuring liquor, the defendant CHARLES E. HAWKINS procured from the said HOBART A. TURNER the execution of a change of beneficiary on the said policy; that no consideration existed or does exist for sch change, that no relationship constituting a beneficial interest existed or exists between the said CHARLES E. HAWKINS and the said HOBART A. TURNER.'

The proof does not establish, and the court did not find, that any fraud, duress, misrepresentation, overreaching or undue influence was used or practiced by appellant on the deceased in connection with obtaining the change of beneficiary being challenged. Thr only question presented for our determination is whether respondents sustained the burden of proof in support of their charge that Turner was mentally incompetent to execute the change of beneficiary on the policy effective as of March 17, 1960.

Several rules of law are applicable to the case at bar and must be comsidered during our review of this record. It is a fundamental rule that the law will presume sanity rather than insanity, competency rather than incompetency; that every man is capable of managing his own affairs and responsible for his own acts. Likewise it is presumed that each man is capable of understanding the nature and effect of his contracts.

It may also be stated that as a general rule, all proceedings involving the competency of an individual to execute a valid contract start with the presumption of competency and that this presumption may be relied upon until the contrary is shown. 29 Am.Jur., Insane Persons, § 132, p. 253. Since the presumption is in favor of capacity to contract, he who asserts the incapacity of a person to contract has the burden of proof. 17A C.J.S. Contracts § 584b, p. 1124.

A rule to be applied in cases of tis kind is well stated in 17 C.J.S. Contracts § 133(1)e, p. 860, that:

'The test of mental capacity to contract is whether the person in question possesses sufficient mind to understand, in a reasonable manner, the nature, extent, character, and effect of the act or transaction in which he is engaged; the law does not gauge contractual capacity by the standard of mental capacity possessed by reasonably prudent men. It is not necessary to show that a person was incompetent to transact any kind of business, but to invalidate his contract it is sufficient to show that he was mentally incompetent to deal with the particular contract in issue, * * *.'

In the instant case Turner was described by some as being 'forgetful and childish.' This expression was not further defined. However, a reasonable interpretation of it would be that they did not consider Turner as passessing the mental capacity of the average man of his age. In this connection it should be noted that where a person possesses sufficient mental capacity to understand the nature of the transaction and is left to exercise his own free will, his contract will not be invalidated because he was of a less degree of intelligence than his co-contractor; because he was fearful or worried; because he was eccentric or entertained peculiar beliefs; or because he was aged or both aged and mentally weak. Page v. Prudential Life Ins. Co. of America (1942), 12 Wash.2d 101, 120 P.2d 527.

Of particular significance to this case is the general rule as stated in 29 Am.Jur., Insane Persons, subtitle, Habitual Drunkenness, § 85, p. 206, as follows:

'Clearly, a person's dissipated condition is not in itself a ground for avoiding a contract or deed, since it is well known that while habitual drunkards are, at times, mentally infirm to the same extent as an insane person or an idiot, at other times they are sober and rational. Accordingly, the rule is that in the absence of an adjudication finding a habitual drunkard to be incompetent, in order to avoid his contract or deed on the ground of his incompetency, it must be shown that his mental condition was such, at the time the contract or deed was made, that he lakced the power of reason and was unable to comprehend the nature and consequences of his act in entering into the contract or executing the deed. A deed executed in a sober interval by one who is addicted to the excessive use of liquor, but who has not been adjudicated incompetent and has not suffered a permanent impairment of mind as a result of his excessive indulgence, will stand, at least in the absence of undue influence or fraud.'

The evidence submitted in support of respondents' allegations and contentions may be briefly summarized as follows:

Prior to the death of Turner's wife, they, the Turners, lived at Montpelier, Idaho, and they frequently visited respondents, who lived at Pocatello, Idaho. Mrs. Turner died in November 1956. At that time Turner was a retired railroad engineer, receiving two pensions totaling approximately $250.00 a month; that following the death of Mrs. Turner he became a 'heavey drinker' and was what may be termed an alcoholic during a substantial portion of the years that followed; that on a number of occasions while he was under the influence of intoxicating liquor he was arrested for various offenses, among which were, being drunk in a public place, driving while drunk and indecent exposure, and was finally committed to the State Hospital South as an alcoholic.

The record shows that following the death of his wife Turner moved to Lava Hot Springs sometime during December 1956 and it was during 1957 when he became involved in most of the arrests hereinbefore mentioned. During May 1957 he voluntarily entered said State Hospital, at which time 'he was diagnosed as a case of Chronic Alcoholism,' and remained at the hospital about two weeks. Thereafter and on October 24, 1957 he was readmitted to the hospital under a judicial order and the same diagnosis was given him. On May 1, 1958, he was discharged from the hospital. In a report issued under the signatures of the staff physician and the superintendent of the hospital (Plfs.Exh.D), it is stated that 'his stay here was uneventful and no particular treatment was considered necessary although he attended group therapy without much benefit.'

Following his discharge from the hospital Turner remained in the city of Blackfoot for three or four months, following which he moved to Ashton, Idaho, where he remained for several months. It was during his stay in Ashton, and on or about March 17, 1960, that the change of beneficiary here involved was accomplished.

This brings us to a consideration of one of the principal issues presented, namely, does the record disclose competent evidence in support of ...