Smith v. American Nat. Ins. Co.

• Decision Date: 04 March 1946
• Docket Number: 6905.
• Citation: 25 So.2d 352
• Court: Court of Appeal of Louisiana — District of US
• Parties: SMITH v. AMERICAN NATIONAL INS. CO.

25 So.2d 352

SMITH v. AMERICAN NATIONAL INS. CO.

No. 6905.

Court of Appeals of Louisiana, Second Circuit

March 4, 1946

Dimick & Hamilton, of Shreveport, for appellant.

E W. & P. N. Browne, of Shreveport, for appellee.

TALIAFERRO Judge.

Mrs. Stella M. Smith, plaintiff herein, appealed from judgment rejecting her suit to recover the proceeds of an industrial life insurance policy issued by the defendant company on the life of her husband, James Lafayette Smith, wherein she was named as beneficiary. The insured died on February 14, 1943.

The policy provides that the insured may from time to time change the beneficiary therein by filing with the insurer a written request therefor on blanks furnished by it, accompanied by the policy for endorsement of the change thereon by one of its executive officers.

The policy in question issued December 17, 1928. The weekly premium due thereon was 66�. Act or about the same time the policy issued defendant also issued one of the same character to plaintiff on which the weekly premium was 25�. When the policies issued defendant made out and delivered to the insureds, or one of them, a premium receipt book in which the name of each insured was written, the ages of the insureds, the number of each policy, amount of the weekly premiums and the date of each policy. Premium payments and dates made were entered in this book.

At the time the policies issued, plaintiff and the deceased were living together several miles north of the City of Shreveport where they conducted a small business of some sort. She was his second wife and twenty-eight years his junior. In September 1941, he suffered a heart attack and was carried to a sanitarium in the City of Shreveport, and from there carried to the home of his married son, Vernon S. Smith, where he stayed until the summer of 1942.

Very soon after the insured took up abode with his son, the small business formerly operated by him and plaintiff was sold. At that time and to the filing of this suit, the policy in question was in the possession of plaintiff. About that time she was asked by Mrs. Vernon S. Smith if she had the policy and stated that she did not. A change of the beneficiary being desired, the insured applied for issuance of a duplicate policy and one issued. It was delivered to the insured's son.

On November 6, 1941, the insured made written application to the defendant for change of beneficiary to Vernon S. Smith. This application was approved and endorsement of the change in beneficiary made upon the duplicate policy. Contemporaneously with this change, defendant's agent divided the insurance account by issuance of two premium receipt books, one for the policy issued to James Lafayette Smith, which was delivered to Vernon S. Smith, and the other for the policy issued to the plaintiff, which was delivered to her. Thereafter, Vernon S. Smith, to the time he was inducted into the military service of the Government, paid weekly premiums due on the policy and thereafter they were paid by the last named beneficiary, James T. Smith.

Excepting some two months, the insured lived with his said son until August, 1942, and thereafter to his death, lived with his nephew, Joseph T. Smith, in Corsicana, Tex. The change in abode was necessitated because of the induction of Vernon S Smith into the armed forces of the Government.

On October 5, 1941, on written application of the insured, Joseph T. Smith was substituted as beneficiary under the policy and endorsement to that effect made upon the duplicate policy. The proceeds of the policy were paid to this beneficiary after the death of the insured.

Not long after the insured's death, plaintiff submitted to and filed with the insurer's agent in Shreveport, proofs of death on forms provided by it. Her demand for payment to her of the amount of the policy was refused, and this suit followed.

Plaintiff predicates her alleged right to recover upon the designation of her as beneficiary in the original policy. She alleges that she paid to defendant's agents and representatives and they received from her all premiums due on the policy to the time of the death of the insured.

Defendant, after detailing all the facts stated above, admits that through error on the part of its Shreveport agents, premium payments by plaintiff on the policy to the amount of $46.65 were accepted by them, but it is charged that in making said payments plaintiff acted in bad faith because she knew or had good reason to know that the beneficiary in the policy had been changed

Defendant pleads that the changes in beneficiary of the policy were effective, in that the insured had the absolute right under the express terms of the policy to do so and after such changes were made, plaintiff had no interest in or expectancy under the policy; that the payment of the proceeds of the policy to James T. Smith, last named beneficiary, was proper and that such payment legally absolved defendant from further liability as insurer.

In answer, and again at beginning of trial, defendant tendered to plaintiff $52.85, being the amount of premiums paid by her and cost of court to the time of tender, in full satisfaction of its liability to her. The tender was refused.

After joinder of issue by answer, plaintiff filed a plea of estoppel wherein it is set up that defendant is estopped from denying liability to her under the policy since it allowed the original policy to remain in her possession to the time of suit, and received from her premiums due thereunder to the time of the death of the insured.

The lower court gave judgment to plaintiff for the amount tendered and cast her for all costs.

We deem it unnecessary to this opinion to detail the explanations offered by defendant's agents in excuse for accepting premiums from plaintiff at times when the new beneficiaries were also paying them. It is not difficult to understand, for the reasons hereinafter stated, why for a time premiums were accepted from plaintiff, but it is quite difficult to conceive why the error was not detected long before some seventy payments were made by her. However, the duplicate payments have no material influence upon a correct determination of the main issues in the case.

As said hereinabove, when Vernon S. Smith was named beneficiary the original premium receipt book with information hereinabove related, was superseded by two books of that character. The first four payments plaintiff made on premium account, after the issuance of the two books, were for 25� each. These payments were endorsed in her book. But, on April 20, 1942, when she tendered 91� and presented this book to defendant's agent, the name of James L. Smith as an assured appeared therein (under her's), also the number of the policy, his age, amount of weekly premium and erroneous date of issuance of the policy; that is, its date was given as February 17, 1942, whereas it issued December 17, 1928. Tender and acceptance of 91� weekly continued until James L. Smith's death.

It is satisfactorily shown that none of defendant's agents entered the name of James L. Smith in the premium receipt book. The conclusion may fairly be drawn that plaintiff made such entry or caused same to be done. She denies responsibility for the entry.

Plaintiff does not controvert the position of the defendant that under the express terms of the policy the insured had the absolute right, without her consent, to change the beneficiary thereunder; but she vigorously contends that the efforts to displace her as beneficiary were abortive because they did not strictly conform to the provisions of the policy in that the changes of beneficiary were not endorsed upon the original policy. Defendant's reply to this contention may be summarized as follows:

1. That the stipulation in the policy to the effect that change or changes of beneficiary thereunder shall be endorsed upon the policy was inserted therein purely for the benefit and protection of the insurer and may be waived by it; and that...