Webster v. Telle

• Decision Date: 23 April 1928
• Docket Number: 389
• Citation: 6 S.W.2d 28,176 Ark. 1149
• Parties: WEBSTER v. TELLE
• Court: Arkansas Supreme Court

6 S.W.2d 28

176 Ark. 1149

WEBSTER v. TELLE

No. 389

Supreme Court of Arkansas

April 23, 1928

Appeal from Union Chancery Court, Second Division; George M. LeCroy Chancellor; affirmed.

Decree affirmed.

T. O Abbott and C. B. Crumpler, for appellant.

John E Harris and E. L. Compere, for appellee.

OPINION

WOOD, J.

On April 13, 1922, the Prudential Insurance Company of America, hereafter called company, issued two insurance policies to Edwin M. Telle, each in the sum of $ 5,000, insuring his life in favor of the Alexander Refining Company, Inc. Each of the policies contained the following provision:

"Change of beneficiary. If the right to change the beneficiary has been reserved, and if the insured shall have attained to majority according to the laws of the State in which insured resides, the insured may, at any time while this policy is in force, by written notice to the company at its home office, change the beneficiary or beneficiaries under this policy, such change to be subject to the rights of any previous assignee and to become effective only when a provision to that effect is indorsed or attached to the policy by the company, whereupon all rights of the former beneficiary or beneficiaries shall cease."

The right to change the beneficiary was not reserved in either one of the policies. On October 14, 1925, the

company, at the request of Telle and of the beneficiary named in the policies, exchanged the beneficiary named by substituting the "executors, administrators or assigns" of the assured, instead of the beneficiary originally named. Telle obtained a loan on the policies in the sum of $ 638. In a financial statement made December 18, 1926, by E. M. Telle to the Exchange Bank & Trust Company of El Dorado, Arkansas among other things, is the following: "Life insurance carried for $ 15,000. Beneficiary, wife."

On January 11, 1927, Telle executed his last will and testament, which, among other things, provides:

"I have made my beloved wife, Bernice Phillips Telle, the beneficiary of three life insurance policies of $ 5,000 each (giving the date and number of the policies). All of these policies are in the Prudential Insurance Company of America. There is a loan of about $ 1,200 to be deducted from the total of $ 15,000. I request that from the proceeds she shall pay the National Bank of Commerce of El Dorado $ 7,500, due March 5, 1927. This is the amount that they have loaned Mrs. Telle on her house, No. 825 West Main Street, El Dorado, Arkansas. She loaned this amount to me, which I used in my business. * * * I appoint Mr. N. L. Webster of El Dorado, Arkansas, as agent to wind up the business. I regret exceedingly that some heavy investments in the year 1926 proved to be unprofitable and so depleted my cash balance to such an extent that I am unable to continue in business any longer. There will be a loss to the creditors, because the property will not sell at a forced sale for the actual cost price."

On the 12th day of January, 1927, Telle committed suicide at the Marion Hotel, Little Rock, Arkansas, while the policies of insurance named in the will were in full force and effect. On the 18th of January, 1927, the will of Telle was duly probated, and letters testamentary were issued on January 19, 1927, to N. L. Webster, the executor named in the will. Proof of death was submitted to the company, and it admitted liability on the two policies in the sum of $ 9,435.46. Webster demanded payment of the amount due under the policies as executor of the estate of Telle. Mrs. Bernice Telle, the widow, demanded payment to her of the amount due under the policies.

On April 26, 1927, the company instituted this action in the Union Chancery Court, naming the executor and Mrs. Telle as defendants. It admitted its liability under the policies and its willingness to pay the same to the person legally entitled thereto, and tendered into court the sum of $ 9,435.46, and prayed that Webster and Mrs. Telle be required to interplead for the funds in order that their respective rights be determined and that the company might pay the sum due under the policies to the person adjudged by the court to be entitled thereto.

N. L. Webster and Mrs. Telle each filed an interplea for the funds. Webster alleged that he was entitled to the funds under the will, in which he was named executor, and under the policies, by the terms of which the sums due under same were to be paid to him as executor. Mrs. Telle alleged that she was entitled to the funds as the beneficiary under the terms of the will, naming her as the sole beneficiary, and under the terms of the policies on the ground, as she alleged, that Telle, during his lifetime, had assigned and delivered the policies to her as security for certain money she had loaned him, and which was due at the time of his death. She further alleged that Telle, during his lifetime, by written declaration and by the solemn declaration made in his will on the day before his death, had made her the beneficiary in the policies. She alleged that any reasonable method adopted by her husband to make her the beneficiary under the policies would legally change the beneficial interest to her, and that she was entitled to recover both as equitable assignee and as substituted beneficiary.

Webster replied to the interplea of Mrs. Telle, denying its allegations.

It was conceded by the executor and Mrs. Telle that the sum of $ 9,435.46 was due under the policies, and this amount was paid by the company into the registry of the court, and the company was discharged from further liability under the policies. The action progressed between the interpleaders, the executor and Mrs. Telle, as to which of them was entitled to the fund in court. The cause was heard upon the pleadings and exhibits, the depositions of witnesses and an agreed statement of facts, and the court found in favor of Mrs. Telle, and rendered a judgment accordingly in the sum of $ 9,435.46, with interest, from which judgment N. L. Webster, the executor, duly prosecutes this appeal.

Learned counsel for the appellant, in their excellent brief, say: "There are but two issues involved in this appeal. The first issue is: Was there a change of beneficiary in the two life insurance policies in favor of appellee, prior to the death of Edwin M. Telle, the assured? The second issue is: Was there a debt owing by the assured at the time of his death to the appellee, and was there an assignment of the insurance policies to secure that debt?"

The conclusion we have reached on the first issue as stated by counsel makes it unnecessary to set out all of the testimony adduced on the second issue. The original beneficiary named in the policies was the Alexander Refining Company, Inc., which, at that time, was the employer of the assured, Edwin M. Telle.

The policies contain, among others, the following provision: "If there be no beneficiary living at the death of the insured, the amount of insurance payable shall be paid to the executors, administrators or assigns of the insured, unless otherwise provided in the policy. The right to change the beneficiary has not been reserved by the insured." Notwithstanding this provision of the policies, that "the right to change the beneficiary has not been reserved by the insured," it will be observed that the parties to the insurance contracts, to-wit, the insurance company, the Alexander Refining Company, the beneficiary, and Edwin M. Telle, the insured, on October 14, 1925, agreed to change, and on October 19, 1925, did change the beneficiary from the refining company to "the executors, administrators or assigns of the insured." In making the change the provisions of the policies in regard to the change of beneficiary as set out above were followed. The parties therefore to the contracts of insurance seem to have treated the provisions of the policies with reference to change of beneficiary, where there was a change, as binding. Therefore, if it could be said that there had been a change in the beneficiary of the policies from the executors, administrator or assigns of the insured to the appellee, Mrs. Bernice Phillips Telle, then we would be inclined to follow the provisions of the contracts of insurance as construed by the parties themselves in order to effectuate such change. For the law is that, "when the parties to a contract have given it a particular construction, such construction will generally be adopted by the court in giving effect to its provisions, and the subsequent acts of the parties showing the construction they have put upon the agreement themselves are to be looked to by the court, and, in some cases, may be controlling." 9 Cyc. 588; 6 R. C. L. 862. But, as we construe the "change of beneficiary" clauses in these insurance contracts, there has been no change of beneficiary since the change was made from the refining company to that of "executors, administrators or assigns of the insured." The beneficiary in the policies at the time of Telle's death, if there had been no assignment of the policies, was his executor, the appellant. But, if the policies had been assigned by Telle to his wife, then the beneficiary was his assignee, Bernice Phillips Telle, the appellee.

This brings us to the question--and, as we view it, the only question--necessary to be decided in the case, to-wit whether or not the beneficial interest under the policies had been assigned by the assured, Edwin M. Telle, to his wife, Bernice Phillips Telle. The provision in the policies of insurance with reference to the assignment of such policies is as follows: "Any assignment of this-policy must be in writing, and the company shall not be deemed to have knowledge of such assignment unless the original or a duplicate...