Wagner v. Nat'l Engraving Co.

• Decision Date: 23 December 1940
• Docket Number: Gen. No. 41242.
• Citation: 307 Ill.App. 509,30 N.E.2d 750
• Parties: WAGNER v. NATIONAL ENGRAVING CO.
• Court: United States Appellate Court of Illinois

307 Ill.App. 509

30 N.E.2d 750

WAGNER

v.NATIONAL ENGRAVING CO.

Gen. No. 41242.

Appellate Court of Illinois, First District, First Division.

Dec. 23, 1940.

Appeal from Circuit Court, Cook County; Robert Jerome Dunne, Judge.

Suit by Sue E. Wagner, as executrix of the estate of Ferdinand F. Nellesen, deceased, against the National Engraving Company, to recover money received by defendant under double liability provision of insurance policy on deceased's life. From a decree dismissing the complaint, complainant appeals.

Affirmed. Lewis C. Coyner and Clinton A. Stafford, both of Chicago, for appellant.

Oliver B. Opsahl, of Chicago, for appellee.

MATCHETT, Justice.

Plaintiff appeals from a decree dismissing her complaint for want of equity. The cause was heard on exceptions to the report of a master, some of which were sustained, others overruled.

The facts in brief are that the decedent Nellesen on December 29, 1929, was the owner of one-third of the stock of the defendant National Engraving Company, a corporation. Rudolph Engel and John Doerfler each owned one-third of the total stock of forty shares. They were the only stockholders, officers and directors of the corporation. No dividends were ever declared. The corporation was run and managed much as if it were a partnership. None of the three was paid any salary. At the end of the fiscal year the amount remaining on hand was divided equally among them. From 1929 onward, Doerfler acted as office manager, Engel as solicitor of business and Nellesen as superintendent of the shop and “Benday” man. Benday was the name for a process used in the business, and Nellesen was an expert in doing this kind of work. For the period from 1929 to 1935, inclusive, each of these three owners of the business annually drew out substantial amounts--the least $6,208.33, the largest $12,433.33.

December 21, 1929, at a meeting of the directors of the National Engraving Company, it was proposed that an agreement be made between each of these three stockholders and the corporation to the effect that upon the death of any one of them his personal representative would be obligated to sell his stock to the corporation for $15,000. On that date three similar agreements (one with each of the stockholders) for such sale and purpose were put in writing, submitted to the parties and January 3, 1930, executed and delivered by them to the corporation. Each of the agreements, in addition to providing for the sale and purchase of the stock of each holder, also provided that in order to provide the money for the corporation to pay for his stock each stockholder would take out two insurance policies on his life, one for $5,000 and one for $10,000, making the corporation the beneficiary. The contracts also provided that the corporation would pay the premium upon the policies taken out.

On the day the contract of the decedent was executed, he took out two policies, one for $5,000 and one for $10,000. The $10,000 policy provided for the payment of a double liability in case of accidental death. The master finds there was an oral agreement between the corporation and the decedent that this policy should contain this provision but it was not reduced to writing. He also finds the agreements, both oral and written, were made at a directors' meeting but that no resolution was drawn up.

Plaintiff argues oral evidence was not admissible to prove conversations or agreements which were not in the written contract between decedent and the corporation. She cites Osgood v. Skinner, 211 Ill. 229, 238, 71 N.E. 869, and Victor Electric Co. v. Miller, 199 Ill.App. 577. The cases are not applicable. The oral evidence was not in conflict with the written agreement but supplementary to it. Charles Mulvey Mfg. Co. v. McKinney, 184 Ill.App. 476.

The premiums on both insurance policies were paid by the corporation. Plaintiff's exceptions to a finding that the premiums were in fact paid by the decedent were sustained by the chancellor. Nellesen died July 11, 1936, from accidental drowning. The corporation collected the insurance on both policies, including the double liability, a total amount of $25,000. His executrix brings this action on the theory that the insurable interest of the defendant corporation in the life of Nellesen was not more than $15,000, and she is entitled to recover from defendant the $10,000 paid by the insurance company for the double liability on account of his accidental death.

The insurable interest of a corporation under such circumstances is a question of fact, and the test is whether a pecuniary loss may be reasonably expected to result to the corporation from the death of the insured. This is a correct statement of the law as held in numerous cases. Guardian Mutual Life Ins. Co. v. Hogan, 80 Ill. 35, 22 Am.Rep. 180;Bruce et al. v. Illinois Bankers Life Ass'n, 207 Ill.App. 555, 558;United Security Life Ins. & Trust Co. v. Brown, 270 Pa. 270, 113 A. 446;Warnock v. Davis, 104 U.S. 775, 26 L.Ed. 924;Colgrove v. Lowe, 343 Ill. 360, 175 N.E. 569.

It is not denied that the burden of proof was upon plaintiff to show there was no reasonable expectation of any pecuniary loss to the corporation by reason of decedent's accidental death but plaintiff says the means of proof on this point was in possession of defendant; that the law will presume the fact did not exist unless such evidence to establish it is produced by the opposite party. She cites Great Western R. R. Co. v. Bacon, 30 Ill. 347, 83 Am.Dec. 199 and Curry v. Cotton, 356 Ill. 538, 191 N.E. 307, to this point, and Prentice v. Crane, 234 Ill. 302, 84 N.E....