Truelsch v. Nw. Mutual Life Ins. Co.

• Citation: 186 Wis. 239,202 N.W. 352
• Parties: TRUELSCH v. NORTHWESTERN MUTUAL LIFE INS. CO. ET AL. TRUELSCH v. NEW ENGLAND MUTUAL LIFE INS. CO. ET AL.
• Decision Date: 13 January 1925
• Court: United States State Supreme Court of Wisconsin

186 Wis. 239

202 N.W. 352

TRUELSCH

v.NORTHWESTERN MUTUAL LIFE INS. CO. ET AL.

TRUELSCH

v.NEW ENGLAND MUTUAL LIFE INS. CO. ET AL.

Supreme Court of Wisconsin.

Jan. 13, 1925.

Appeal from Circuit Court, Racine County; C. M. Davison, Judge.

Separate actions by Alice M. Truelsch against the Northwestern Mutual Life Insurance Company and William Henry Miller and against the New England Mutual Life Insurance Company and William Henry Miller. Judgment for plaintiff, and defendant William Henry Miller appeals. Reversed and remanded, with directions.

Two separate actions were brought against the defendant insurance companies upon four insurance policies on the life of the plaintiff's husband. These moneys in question were paid into court; the actions were consolidated; and the parties to these actions each claim the money, the plaintiff as the beneficiary under her husband's policies, and the appellant as the owner of the money with which the deceased paid the premiums. The following are the dates and the amounts of the policies involved: $1,000, New England Mutual, No. 245641, March 9, 1912; $1,000, Northwestern Mutual, No. 1020187, December 26, 1913; $1,500, New England Mutual, No. 276966, May 16, 1914; $2,000, Northwestern Mutual No. 1144294, March 16, 1916.

The deceased, Paul Truelsch, was employed by the appellant Miller first as a clerk and then as a bookkeeper for a period of 10 years. About noon on March 30, 1917, the son of the appellant thought that the deceased's books did not balance, and suggested that he return in the afternoon, and they would check them over together. The deceased then apparently took $40 from the cash drawer, leaving a memorandum to that effect, went to the insurance office, and paid the second premium on the last of the four policies, thus rendering it incontestable, and then within an hour threw himself in front of a fast-moving train near Racine, Wis., and was instantly killed. On his person was found a letter addressed to Alice, the name of his wife, and within that letter another addressed to the appellant's son Walt, with whom he was to have checked over his accounts that afternoon. After some difficulty with respect to the testimony of the wife as to the contents of the letters, they were obtained and admitted in evidence, and read as follows:

“Dearest Alice: When this gets to you, I guess I'll be gone. Please--oh, please--forgive your poor Paul. He stole $4,400 from Miller and can't pay the bill. God--how this hurts.--It's awful. My life insurance, $5,500, will pay, I am sure, all right. It's all paid up and all over one year old--therefore--non-contestable. They must pay in full. I owe a small bill at Kradwell's--at the L. & C. and at Earnest Johnson--that's all. The flat will take care of a $200-note due at the bank this summer and there ought to be some money left from that after it is sold.

Get Rev. Fedders to look after you. Call up Hank--he'll help you. If you need a lawyer--get Smieding, he's honest. Give the enclosed letter to Walt and ask him to say to the papers that I was a good bookkeeper and my accounts were all in first class shape--Dave Griswold and Fowler will do that for me if it should get out.

Oh, Alice--I'm so sorry--so awfully sorry--I stole the money from time to time intending to replace it and couldn't. I had saved up some money to replace part of it and then I met and married you and put it into a home instead. We've been living on my salary all right. This has nothing to do with that. I hope I won't go insane before I finish this. Good God, this is terrible. I hope you will be all right. I hope everything will go good with you after this. I should not have married you--but, oh, how I loved you--how I love you now--and how I hate to do this. It will hurt you terribly. It's the only thing I can do--I can't face the Millers and this way the insurance companies will have to make it good. They must. You must insist on it. That will leave you only a little to live on Alice. Don't let Mrs. Held neglect you, dearest. I wish we could have lived our lives out But it's too late. Don't hate me too much, Alice.

Please don't hate me, Alice. Say good-bye to mother and everybody. I loved you and her--oh, so hard, this is too bad--it may break her heart, but you bear up under it all.

Good-bye--dearest wife--dearest--dearest wife. I love you--don't hate me.

Paul.”

“Walt: I am a straight $4,000 short on the books and the bank account is $400 short. I stole it from time to time meaning to replace it but couldn't. The money I spent for my own home and wife was all my own--I should have used it to pay you back but loved Alice too much and hoped I could make good.

Walt, my dying wish is that you let my name stay clear to the world--please do it. Tell them I was all right and good and my accounts were in perfect shape and you could see no reason for my taking my life. My life insurance, $5,500, will pay it up. Kind of look after Alice for me, please--oh, please do this and forgive me. I paid for it.

Paul.

Walt: Don't blame Alice--she knew nothing of it and she didn't get a cent of it. I just took it a little at a time for nine years and spent it here and there. My--Lord--how it counted up. It is awful. Good-bye, Walt; don't let the world know--tell them I was all right.”

When the appellant heard of these circumstances he had one Dawson, a chartered public accountant, go over the books of the company which had been kept by Paul Truelsch and make a report on them. The report indicated that between January 1, 1914, when the books were found to balance, and the date of Paul's death, the books showed shortages amounting in all to $4,000, and that the cash in the bank was short $400. The shortages were for various amounts from $1,000 to $50, and were covered up in the first instances by increasing the miscellaneous bills receivable and later by decreasing the miscellaneous bills payable, and during the period just preceding his death Paul covered the shortages by so manipulating the adding machine that certain figures in a column of figures would not be included in the sum total registered at the bottom of the column. Dawson did not attempt to show when and in what amounts the money was taken. The son of the appellant, however, made a chart showing the dates of the payments of the premiums and the notes given for premiums and the dates when sums were dropped from the books, together with a record of the checks drawn by the deceased for the payment of such premiums and notes, and this chart was introduced in evidence. The amount of $73 and some cents was added to the claim of the appellant by the addition of the $40 taken just before the deceased's death and for certain other items claimed to have been abstracted.

The plaintiff wife, though apparently falsifying in certain statements, seems to have been unaware as to the fraudulent conduct of her husband. She stated that he usually gave her the salary received from the appellant Miller, and that she ordinarily paid the household bills, though sometimes he would do so. She stated that he did not always give her the amount of his salary at once, although the books of the company always show the payment to have been made in cash on the last or next to the last day of the month. Although asserting that she sometimes wrote the checks for the insurance premiums, she did not offer any checks in evidence nor any report of the bank statements.

There is some dispute as to the question whether the deceased had any other source of income other than his salary. It was stated that $20 or $30 a month was obtained from a flat, and that he made certain other moneys in developing pictures, though no testimony is given as to the amount, and it would seem to be negligible. He was stated to have been accustomed to do certain odd jobs, but no testimony as to any definite amount of money is given, and the referee found that no income other than the salary was established. The principal issue with regard to the facts is whether there is evidence which will justify the finding that the money was taken and used in the payment of the insurance premiums. The plaintiff's counsel insists that the embezzlement has not been established, as the books merely indicate shortages, and in at least one instance an overage. Counsel for the appellant claim that the embezzlement is practically demonstrated. The only case in which this is established by direct evidence is in the case of the premium paid within an hour of the death of the deceased. In other instances the result must depend on the kind of evidence referred to in the opinion.

The referee found that from January 1, 1914, to March 30, 1917, Paul Truelsch was paid a salary of $3,195, and during that period unlawfully took and embezzled from his employer the sum of $4,477.73; that after the 1st of January, 1914, all of the premiums on the policies were maintained and paid by the moneys so misappropriated; that the embezzlement was concealed by false entries and fraudulent manipulation of an adding machine; that the letters above set forth were delivered to the plaintiff March 30, 1917, and that with full notice of their contents she made proof of death and brought suits to recover the amounts due, and at all times refused to carry out the instructions of the deceased or to recognize any lien in favor of the appellant. As conclusions of law, it was found that a trust was impressed in favor of the appellant upon two-thirds of the policy of $1,000 of the New England Mutual Insurance Company, and that the remainder of the policy was owned by the plaintiff; that all other policies and the proceeds were impressed with a trust in favor of the appellant Miller for the amounts misappropriated and used. The amount of said misappropriation was determined to be $4,477.73.

When the defendant asked for confirmation in the circuit court, the referee's findings, holding that the letters found on the deceased...