Service Life Ins. Co. of Fort Worth v. Davis

• Citation: 466 S.W.2d 190
• Decision Date: 05 April 1971
• Docket Number: No. 25416,25416
• Parties: The SERVICE LIFE INSURANCE COMPANY OF FORT WORTH, Texas, Plaintiff, v. Julia Ann DAVIS, Administratrix of the Estate of Randall E. Freguson, Deceased, Defendant, Crossclaimant-Appellant, Cheryl Downing Baublit, Defendant, Crossclaimant-Respondent.
• Court: Court of Appeal of Missouri (US)

Page 190

466 S.W.2d 190

The SERVICE LIFE INSURANCE COMPANY OF FORT WORTH, Texas, Plaintiff, v. Julia Ann DAVIS, Administratrix of the Estate of Randall E Freguson, Deceased, Defendant, Crossclaimant-Appellant Cheryl Downing Baublit, Defendant, Crossclaimant-Respondent.

No. 25416.

Kansas City Court of Appeals, Missouri.

April 5, 1971.

Vernon N. Kneib, St. Joseph, for appellant.

J. W. Roberts, Strop, Watkins, Roberts & Hale, St. Joseph, for respondent.

SHANGLER, Presiding Judge.

This interpleader action involves a sum of $11,540, proceeds from a life insurance policy issued by plaintiff Service Life Insurance Company of Fort Worth, Texas, to Randall E. Ferguson who died as the result of accident while on active duty with the United States Marine Corps in Viet Nam. Randall died intestate and Julia Davis, his mother, was appointed administratrix. The insurer joined as defendants Cheryl Downing (now Baublit) the named beneficiary in the policy and Julia Ann Davis, administratrix, each of whom cross-claimed for the recovery of the fund. Plaintiff insurer paid the proceeds into the registry of the court, was allowed its costs, and was ordered discharged.

The trial court found that Cheryl Downing Baublit was entitled to the fund as the named beneficiary in the policy and gave judgment upon her cross-claim. The administratrix, Julia Ann Davis, appeals contending that in the circumstances, and for the reasons we later detail, equity and good conscience require that Cheryl hold such proceeds as trustee of a constructive trust for the benefit of Randall Ferguson's heirs at law.

Cheryl Downing and Randall Ferguson met for the first time while attending DeKalb High School in Rushville, Missouri. She was then thirteen years of age, he was sixteen. Randall visited her frequently thereafter in the Downing home, but always under parental chaperonage. It was not until the Spring of 1964, when Randall and Cheryl attended a high school dance, that they had their first unescorted date. She was then sixteen, he eighteen. In all they had five dates before Randall left for the Marine Corps upon his graduation from high school in May of 1964. During that period they also met covertly, but not alone, in the home of Virginia Dyer who was Cheryl's classmate and a friend of long standing. Cheryl knew that her parents thought her too young for a serious attachment to any boy and for that reason objected to her relationship with Randall. Notwithstanding, Cheryl and Randall exchanged endearments and avowals of love and came to an understanding they would marry 'some day'.

Cheryl, however, did not consider herself engaged to Randall. She had neither been offered nor accepted a ring from him. Also, although they spoke of marriage, both realized that she had yet to complete two years of high school, and he three years of military service, before marriage was possible. They had agreed that during his absence each was free to date others. In fact, Randall was aware that Cheryl was dating local boys, including Brian Keefhauver (whose ring she wore for a while), and acquiesced in that knowledge. It was understood, however, that neither of them was to form a serious liaison with anyone else.

During Randall's absence, they wrote each other every day. While in the United States, he telephoned her regularly. Then, when Randall returned on a twenty-one day leave in September, 1964, they saw each other daily. Throughout, they continued to profess love for each other and spoke of a future marriage. Their relationship was such that they believed and trusted one another. On New Year's Day of 1965, Randall telephoned Cheryl from California. He was soon to embark for Okinawa and then Viet Nam. He told her that he was designating her the beneficiary of his life insurance policy because he had no one else. She asked him not to. Notwithstanding, on March 2, 1965, Randall made application to plaintiff Service Life Insurance Company for a life policy and arranged for the payment of premiums by a monthly allotment deduction of $8.50. On May 1, 1965, the policy issued designating 'Cheryl Downing--Fiancee' the beneficiary. The policy, as indicated by the insurer's undated letter of transmittal, was sent to Cheryl for keeping at Randall's direction. When Cheryl received the policy and letter on May 13th or 14th, 1965, she showed it to her mother. Mrs. Downing promptly told her: 'Write and tell him to take your name off that policy because it will cause a big wrangle with the family'. Cheryl immediately complied. To this Randall responded about the first of June, 1965 that he had 'dropped the policy', his Uncle Bud had a better one for him. Then, on June 16, 1965, Randall wrote his mother, cross-claimant Julia Davis, that he planned to discontinue the policy because he really could not afford it. Less than a month before his death, on July 7, 1965, he wrote his aunt, Betty Crockett, that he had dropped the policy. From the time the policy issued until after Randall's death, Cheryl had not removed it from her dresser drawer in which she had placed it. She and Randall did not discuss its terms in any of their letters nor did Randall ever write Cheryl requesting that it be sent to him or anyone else.

When Cheryl met George Baublit at the end of May, 1965 (whom she married in January, 1967 and who, at trial, was himself serving in Viet Nam) her feelings for Randall began to change. In early July, 1965, Cheryl wrote Randall (described by him and referred to throughout as the 'Dear John' letter) that because she had met George, their former relationship looking to future marriage could not continue. She wished, however, to continue corresponding since she remaiend fond of himl Corporal Carl Riddle, who served with since she remained fond of him. letter by Randall and thought it saddened and depressed him for a while. Before long, they resumed writing as before and the only two letters Cheryl did not destroy, the last written on the day before his death, were congenial and cheerful.

Only because appellant makes much of it, we mention that Cheryl inscribed this legend in the 1965 issue of the high school yearbook owned by Susie Davis, Randall's sister:

'Well, to me it has been a long, lonely year, you know why! I'm sure glad you were here to let me talk to you about Fergie, Suzi. I hope we will end up sister-in-laws, but things do change and so does Randy!'

Asked what she meant by it, Cheryl explained: 'I meant at the time I was sixteen and Randy was eighteen, and you think a lot different then than when you grow older, and it was two years I had to wait'.

On August 2, 1965, Randall shot himself accidentally while cleaning his weapon and died. A few days later, Susie visited Cheryl who then for the first time since it had come into her possession removed the insurance policy from the dresser drawer and showed it to Susie. Mrs. Davis, Susie's mother, called Cheryl the next day and asked that she bring her the policy, and she did. Believing the policy had been discontinued, she told Mrs. Davis it was of no value. Mrs. Davis thought nonetheless it should be determined if the policy was still in effect. If so, each thought the other should have the proceeds. At that Cheryl suggested they be divided among certain churches and a boys' home. Later Cheryl and her mother attempted to retrieve the policy from Mrs. Davis, who, although she had it, told them it had been given to her attorney. By now, Cheryl had decided that Randall had intended for her to have the proceeds and, therefore, she meant to have them.

Cheryl attended the funeral ceremony with the Fergusons and signed the family funeral register: 'Cheryl Downing, engaged'. It was inscribed in that manner not only at the behest of Susie and other relatives of the deceased, but also because on that occasion she 'felt closer to (Randall)'.

These are the facts expressly found by the trial chancellor, as well as those implicitly inferable from those given, to support his judgment in favor of Cheryl Downing Baublit as beneficiary under the policy. Cheryl alone gave evidence in support of her crossclaim while Julia Davis was the principal witness for the estate.

In her brief, as she had throughout the trial and in her after-trial motion, appellant continues to impugn Cheryl's credibility and charges the trial court with error in having expressly found her testimony that of 'a very forthright witness', and therefore credible. Much of the competing testimony of Cheryl and Mrs. Davis--from which, largely, appellant's claim to a constructive trust must find support, if at all--was in direct conflict. During the trial, appellant undertook to discredit Cheryl by her previous deposition testimony, portions of which were also received as admissions against her interest. The court expressly found that her deposition testimony was 'very similar to her testimony in court'. It is not necessary to reiterate all the instances of testimonial deceit appellant attributes to Cheryl to conclude that credibility was a determinative factor in the court's adjudication of all the ultimate issues. Certainly, as to appellant's alternative theory of recovery, that of a constructive trust ex maleficio, where the central issue to be determined by the trier of fact was Cheryl's actual state of mind during her relationship with Randall and what he could reasonably have understood it to be, since Randall was dead, and most of the letters between them had been destroyed or lost, the determination of that issue depended almost wholly on Cheryl's credibility. It thus became the chancellor's right and duty to determine not only her credibility but that of Julia Davis and the other witnesses. Warford v. Smoot, Mo., 361 Mo. 879, 237 S.W.2d 184, 188(7). And although we review the law and the evidence de novo (Civil Rule 73.01(d), V.A.M.R.), where the evidence upon all the vital questions involved is substantially oral, we will defer to the views...