Southern Lumber Co. v. Pearce, 6483.

• Decision Date: 01 June 1932
• Docket Number: No. 6483.,6483.
• Citation: 59 F.2d 50
• Parties: SOUTHERN LUMBER CO. v. PEARCE.
• Court: U.S. Court of Appeals — Fifth Circuit

59 F.2d 50 (1932)

SOUTHERN LUMBER CO. v. PEARCE.^*

No. 6483.

Circuit Court of Appeals, Fifth Circuit.

June 1, 1932.

Oliver D. Street, of Birmingham, Ala., and S. T. Wright, of Fayette, Ala., for appellant.

Jim C. Smith, of Birmingham, Ala., for appellee.

Before BRYAN, SIBLEY, and HUTCHESON, Circuit Judges.

HUTCHESON, Circuit Judge.

Mrs. Pearce, beneficiary in a life insurance policy for $5,000, brought this suit in a state court of Alabama against the New York Life Insurance Company to recover thereon. The cause removed to the federal court; the company, by way of interpleader in accordance with section 10386 of the statutes of Alabama (Code 1923), paid the amount sued for into court, suggesting that without collusion with it the Southern Lumber Company was a claimant for said sum. Mrs. Pearce and the lumber company each filing claim to the amount, one as beneficiary, the other as assignee, the case was tried to a jury. At the conclusion of the evidence, each moving for an instructed verdict, the court granted the motion of appellee. From the verdict and judgment against it, the lumber company appeals.

There was no conflict in the evidence. Plaintiff offered the policy insuring the life of Ernest J. Pearce, and dated April 3, 1929, agreeing "to pay to Leola E., wife of the insured, the beneficiary, $5,000." It contained the following provisions pertinent to this suit.

"Assignment. Any assignment of this policy must be made in duplicate, and one copy filed with the Company at its Home Office. The Company assumes no responsibility for the validity of any assignment.

"Change of Beneficiary. The insured may from time to time change the beneficiary unless otherwise provided by indorsement on this policy, or unless there be an existing assignment of this policy. Every change of beneficiary must be made by written notice to the Company at its Home Office accompanied by the policy for indorsement of the change thereon by the Company, and unless so indorsed the change will not take effect.

"Register of Change of Beneficiary. No change of beneficiary shall take effect unless indorsed on this policy by the Company at the Home Office.

"Rights of Insured. The insured, during his lifetime, and without the consent of the beneficiary, may receive every benefit, exercise every right and enjoy every privilege conferred upon the insured by this policy, unless otherwise provided by indorsement hereon."

It was admitted that there was no indorsement on the policy limiting or abolishing the right to change the beneficiary, or restricting any right or privilege of the insured, and that no change of beneficiary or assignment of the policy was ever noted on it or filed with the company.

Defendant proved by one Alexander, a collector for the Southern Lumber Company, that in the month of June, 1930, Mr. Pearce, being then indebted to that company in the amount of around $10,000, and his account being in bad shape, had, in response to his request to put up some more security for his debt, told him he would put up a $5,000 insurance policy, and "I told him that would be all right; mail it to the office"; that some time later Mr. Pearce did place the policy in an envelope and mail it to the lumber company, in whose possession it has ever since been. After the receipt of the policy and until Pearce's death by his own hand, the lumber company carried on an insistent but fruitless campaign by correspondence with Pearce and with the insurance company, to procure from Pearce an assignment of the policy, for, though many letters were written and forms for his execution sent to him, he neither executed nor agreed to execute any of them.

On August 14 the company wrote Pearce as follows:

"We have a letter from the Southern Lumber Company of Fayette, Alabama, instructing us to send you assignment papers for assigning your above policy to them.

"As we are unable to determine from the information given in this letter whether you want to make a total assignment, or just of a collateral nature, we have not prepared the papers, but will do so upon receiving further information from you.

"As your policy now stands on our records, it is payable to Leola E. Pearce as beneficiary, and should you desire to make an assignment of a total nature, assigning all benefits to the Southern Lumber Company, then it is going to be necessary that you change the beneficiary to your estate. We are enclosing herewith change in beneficiary form, which you may sign in ink as `Ernest J. Pearce,' having your signature witnessed, and return to us with the policy, if such is the case.

"On the other hand, should the assignment be of a collateral nature, and you want your wife to receive any proceeds of the policy, available over and above the indebtedness to the Lumber Company, then she should join in the assignment with you. In such a case you need not execute the change in beneficiary form, but return it to us with such advice.

"Upon receipt of this information from you, we will then send you assignment papers to be completed."

Some time later, the date not shown in the record, Pearce wrote the company:

"Dear Sir:

"I want to put this policy up as a collateral to Southern Lumber Company of Fayette Ala. for $5000 until I can pay them what I owe them. In reply to yours of Aug. 15, 1930."

On September 29 the company wrote Pearce as follows:

"We have your letter stating that you wish to put up as collateral your above numbered policy, in favor of the Southern Lumber Company. We therefore inclose a form changing beneficiary to your estate, which you should sign in ink in the presence of a witness, leaving the date at the top which we have inserted.

"We enclose an assignment in duplicate in favor of the Southern Lumber Company, wherein total assignment is made to the Lumber Company. This form is to be signed by you in the presence of a notary public, having him affix his seal to both copies.

"All papers should then be returned to us promptly with the policy for indorsement, and we urge you to give the case your earliest attention,"

— enclosing with the letter a form of assignment:

"Sept. 29, 1930.

"New York Life Insurance Company

"The beneficiary under the accompanying policy No. 10599860 who is to receive the proceeds thereof upon due proof of the death of the insured, is hereby changed in accordance with the change of Beneficiary Clause to my executors, administrators or assigns, such change to take effect only when endorsed on said policy by the Company at the Home Office.

"_________ _________ Witness...