Westphal v. Kansas City Life Ins. Co.
| Decision Date | 27 February 1941 |
| Docket Number | Civil Action No. 283. |
| Citation | 37 F. Supp. 300 |
| Parties | WESTPHAL et al. v. KANSAS CITY LIFE INS. CO. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Arnold C. Otto, of Milwaukee, Wis., for plaintiffs.
Olwell & Brady, of Milwaukee, Wis., for defendant.
This action is brought by the plaintiffs to recover upon three life insurance policies issued by the defendant insurance company upon the life of F. Gilbert Westphal, who disappeared on November 5, 1931.
The case was submitted to a jury upon a special verdict consisting of three questions, asking the jury's determination as to whether F. Gilbert Westphal died on or before May 28, 1932; April 30, 1932; and November 26, 1931. The jury answered "Yes" to each question. Each date indicated was the last day upon which one of the three insurance policies in question was in full force and effect.
At the close of the testimony, the defendant moved for a directed verdict, upon which the court reserved ruling under rule 50(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. The matter is now before the court upon motions after verdict which ask (1) that the court change the answer to each question from "Yes" to "No", and (2) for judgment notwithstanding the verdict. There is also an alternative motion before the court, which was timely made, that in the event that the court sustains the verdict of the jury, the court determine whether the premium payments made by Westphal to continue the policies in force were made with premiums or funds owned by the defendant, and that the court determine that the proceeds from said policies be in fact declared to be the property of the defendant.
F. Gilbert Westphal was employed as cashier in the Milwaukee Office of the defendant insurance company, operated by The Madden Agency. The evidence disclosed that for a period of some months before his disappearance, he had used for his own purposes funds of the company collected as insurance premiums, depositing a portion of such funds in his bank accounts which he maintained in Chilton, Wisconsin, his former place of residence. The amount of the shortage proved on the trial was approximately $1,500, and proof of additional shortages was not made because the policy holders involved did not live in this immediate vicinity and were not available as witnesses. The bonding company which was on Westphal's bond settled with the defendant company by paying some $2,400.
F. Gilbert Westphal was last seen on November 5, 1931, and has not been heard from since. He was a man of rather slight stature, weighing about 130 lbs. When he left home he kissed his wife goodbye, and took none of his personal effects with him. He had been on very cordial relations with his immediate family, and the night before his disappearance had taken his wife and oldest daughter downtown after the supper hour and treated them to ice cream. He was well liked by all who knew him. His home and family ties were very strong. His wife testified that he had been ill the night before, being distressed in the stomach, and that he took soda for relief. Mrs. Westphal likewise testified that a Mr. Lippert of the Madden Agency had telephoned her on November 5 that Westphal had left a note saying he was ill on the same day.
The week end before his disappearance, Westphal and his wife had attended a party given by friends at Fond du Lac. The members of his family and others present noticed nothing of an unusual nature. He did not seem to be troubled, worried, or depressed. On November 1, he had been given a raise in salary from $150 to $175 a month.
Mr. Westphal was on friendly terms with his parents and his brothers, several of whom were ministers, and all of more or less prominence. During his college days he would preach on Sundays on occasions when ministers were absent. He had been elected to the School Board by the citizens of Chilton. He acted as treasurer of the board, handling about $50,000 per year, without complaint. For eight or nine years he was employed in the bank at Chilton, of which his father-in-law was president. In the winter of 1929 and 1930 he was in charge of the Greenleaf Bank, of which his father-in-law was likewise president. He owned a 1929 Essex automobile, which was mortgaged. His wife had some property, a portion of which had been used to pay the family living expenses, etc. The Westphals' home life was simple, Mrs. Westphal doing her own work.
In addition to the chattel mortgage on his car, amounting to $250, Westphal had an unpaid note at the Chilton State Bank for $400; and on the day he disappeared, he obtained $450 from a local bank upon a check which was no good. The auditor from the Home Office of the defendant company had been in Milwaukee from October 22nd to 26th, auditing Westphal's accounts. While here, a policy holder came in complaining of the nature of the receipt which Westphal had sent to him. Upon questioning by the auditor, Westphal was unable to explain how this had occurred.
Mr. Westphal was able to embezzle money over a considerable period by reason of the bookkeeping methods in the cashier's office of The Madden Agency. A method frequently resorted to by Westphal was, when a policy holder would pay in an annual premium, Westphal would report to the company as having received a quarterly premium, keeping the balance for himself. On a number of occasions when the next quarterly premium would become due, Westphal had to make good in order to escape detection.
Mr. Westphal left a letter for his wife, as follows:
He likewise wrote a letter to Mr. Louis E. Madden, the head of the Madden Agency, dated November 4, 1931, but postmarked in Milwaukee on November 6, as follows:
No warrant was ever issued for Westphal's arrest. An advertisement was run in the "Chicago Tribune", a paper often read by Westphal, informing him that all was well and that he need not stay away. Westphal also knew that his father-in-law and his father and brothers were financially able to make good the amount of the defalcation if they desired to do so.
The motions now before the court have given me considerable concern. Had I been a member of the jury, without hesitation I would have answered "No" to each question. There was no evidence, except inferences that might be drawn, to prove Mr. Westphal died within 21 days of his disappearance (Question 3), or within 5 months and 25 days thereafter (Question 2), or within 6 months and 23 days thereafter (Question 1). The letters from Westphal, heretofore set out, would have been decisive in my mind.
I recognize, however, that the trial judge is not the trier of the facts, and the law does not require that the evidence shall satisfy him. Viereg v. Southwestern Wisconsin Gas Co., 212 Wis. 394, 248 N.W. 775. I recognize also that upon a motion to direct a verdict for the defendant, evidence and the reasonable inferences to be drawn therefrom must be considered in the light most favorable to the plaintiff. Trautmann v. Schefft & Sons Co., 201 Wis. 113, 228 N.W. 741; Gunning v. Cooley, 281 U.S. 90, 94, 50 S.Ct. 231, 74 L.Ed. 720. Upon this motion for a directed verdict, the court must assume that the plaintiffs' evidence is true, and must extend credit to every fair inference therefrom. Prairie Farmer Pub. Co. v. Indiana Farmer's Guide Pub. Co., 7 Cir., 88 F.2d 979.
With these rules in mind, we must consider the applicable Wisconsin law. It is without dispute that the rule has been...
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