Thomson v. Thomson

• Decision Date: 03 September 1946
• Docket Number: No. 13330.,13330.
• Citation: 156 F.2d 581
• Parties: THOMSON v. THOMSON.
• Court: U.S. Court of Appeals — Eighth Circuit

156 F.2d 581 (1946)

THOMSON v. THOMSON.

No. 13330.

Circuit Court of Appeals, Eighth Circuit.

July 26, 1946.

Rehearing Denied September 3, 1946.

Harry A. Hall, of Kansas City, Mo. (Schultz & Bodney and White & Hall, all of Kansas City, Mo., on the brief), for appellant.

Harvey E. Hartz, of Kansas City, Mo., for appellee.

Before GARDNER and THOMAS, Circuit Judges, and DUNCAN, District Judge.

GARDNER, Circuit Judge.

This was an interpleader action filed by the John Hancock Mutual Life Insurance Company against Caroline Thomson and Freeman J. Thomson as administrator of the estate of Arthur W. Thomson, deceased, to determine the right to the net proceeds of a life insurance policy issued by the Insurance Company on the life of Arthur W. Thomson. The policy was issued June 15, 1938, for the sum of $20,000. Caroline Thomson, then the wife of the insured, was designated as beneficiary. Right to change the beneficiary was by provision of the policy reserved to the insured.

It was contended by appellant, Caroline Thomson, in the trial court, and she renews the contention here, that an oral contract was entered into between her and the insured, by the terms of which she acquired a vested interest in the proceeds of the policy which could not as between her and the insured be taken from her by his act. She predicates this right upon substantially the following facts disclosed by the record:

She and Arthur W. Thomson married July 17, 1930, and she immediately joined him in his business as an itinerant photographer, which he conducted by organizing a group of solicitors who traveled from town to town canvassing customers. These prospects were reported and later called upon by photographers and salesmen. Photographs were taken and sales made, and Mr. Thomson usually made the deliveries and collected the money and was in the habit of carrying large sums of cash on his person, the evidence showing that he had $3526 in cash on his person when he died. His net income was approximately $15,000 a year. Caroline Thomson began working with him as a solicitor, but from 1933 on she had charge of the advance group of solicitors, supervising and planning their work. Thomson was apparently a periodic drinker and on various occasions would come into a town and go on an extended drinking spree, and during such times he would spend whatever money he had collected.

On May 24, 1938, Mr. and Mrs. Thomson met with Mr. Louis Niman, manager of the John Hancock Mutual Life Insurance Company at Kansas City, Missouri, and discussed with him the question of taking out life insurance. Thomson related to Mr. Niman the nature of the business he and his wife had been engaged in, stating that he had not paid her for her services in the business and that he was going to take out life insurance for her benefit as payment for her services. The witness testified that:

"He (Thomson) stated to me that he wanted this contract for her benefit and that he wanted it so that in the event of his death she would be paid for her work and her efforts in working with him in the business."

As a result of this conference the form of policy was agreed upon and Thomson signed up an application naming Caroline Thomson as the beneficiary, and as he did so remarked to his wife, "Now Baby, this is for you and will always be for you." Shortly thereafter Niman delivered the policy, at which time Thomson in the presence of Mrs. Thomson, said that:

"He was very happy to get it and he said that he felt very happy that he had the contract now and that his wife would be properly taken care of in the event of his untimely death."

Subsequent to the delivery of the policy, the insured in conversation with one Anthony Wassinger, said that he had spent all the money earned by the joint efforts of himself and his wife and had not paid Caroline for her work but that he had agreed with her to take out this life insurance policy as payment for her services. At a still later date Thomson, having sold his car to one Carl D. Austin, was looking through his papers for the car title and came upon some papers in connection with the application for this insurance policy. These he showed to Mr. Austin, saying that his wife had worked faithfully with him for many years and had not received what was justly due her and he had taken this policy out for her. The witness, referring to his conversation with Thomson about this policy, testified that Thomson said:

"`You know, I have a good time, spend my money pretty freely. * * * Caroline has worked pretty faithfully with me for a good many years and didn't receive what she was justly due'; that she had worked a long time and he didn't think she had been adequately taken care of; that she had handled a crew of girls for him and that without her he wouldn't have done nearly so well * * * and he felt that he hadn't done as much for her as he should."

There was evidence, some of which was hearsay, and some of which was opinion, that Caroline Thomson was paid some wages from time to time, the definite amount of which is not shown as she was paid money for distribution to her helpers. The court declined to permit her to be a witness in her own behalf, but erroneously permitted witnesses to testify to self-serving declarations allegedly made by the insured relative to payments made to Caroline Thomson.

On February 3, 1940, Thomson went to the office of the Insurance Company and again met Mr. Niman, telling him that he was arranging with the Mercantile Bank for a loan, and asked for forms so that the policy could be used as security for the loan. Niman advised him that it would require his wife's signature, to which Thomson replied that he did not wish her to know anything about it if it could be accomplished without her knowledge, and Niman advised him that the only way to accomplish this would be to change the beneficiary to his estate and then make an assignment to the bank. Thomson replied that he would do this and that he was making arrangements with the bank to pay the excess over the loan to Caroline Thomson. In connection with this transaction and as a part of it, on the advice of Niman he signed a formal application nominating his estate as beneficiary. He then executed a formal assignment to the Mercantile Home Bank and Trust Company of Kansas City, on a blank furnished for that purpose, the assignment reciting that the company was authorized to make loans on pledge of the policy and to pay the cash surrender value, or any remaining proceeds of the policy at its maturity, to the bank, and providing further that the bank might apply any distribution of surplus toward the payment of premiums. The assignment contained provision that:

"Any nomination of beneficiary under paid Policy heretofore made and any method of optional settlement heretofore elected thereunder are hereby revoked."

Both the assignment and the application to change the beneficiary were left with Niman who sent them to the Home Office for proper endorsement, following which the policy with the assignment was sent to the bank where it remained until after the death of the insured, whereupon the Insurance Company paid the bank's loan out of the proceeds of the policy. The loan secured was in fact used to pay the premium and was later increased to cover the four subsequent premiums. Caroline Thomson had no knowledge of the transactions connected with the change of beneficiary and the pledge of the policy to secure this loan. She continued to work with her husband in the business some six years after the policy was issued.

On June 26, 1944, marital differences having arisen between them, the Thomsons went to the law office of Arthur C. McHenry, in Waukeegan, Illinois, and employed him to file a divorce action for Caroline Thomson, requesting him to draw papers relative to a property settlement so that Thomson might sell a hotel property in Waukeegan, title to which stood in his name, clear of Mrs. Thomson's dower interest. A contract of settlement was thereupon prepared and signed by both parties. By this contract Thomson agreed to pay his wife $2500, in annual installments of $500, commencing in 1944. Caroline Thomson agreed to waive all rights to alimony, and the contract contained the further provision:

"That the parties hereto hereby agree that each of them is hereby wholly and forever barred of and from all rights, claims and demands in and to the property of each other, real, personal or mixed, wheresoever situated, and whether now possessed by the said parties or hereafter acquired by them, including the rights of dower and homestead."

A decree of divorce was granted Caroline Thomson by the Circuit Court of Lake County, Illinois, on August 1, 1944, without alimony, the decree embodying the terms of the property settlement contract. The attorney who prepared the contract of settlement testified that after the parties returned to his office and had signed the contract, "I said to her, `Now, be sure that you are perfectly satisfied.' She said, `This doesn't amount to much. There is insurance,' and he spoke up and said, if anything happened to him that she was...