Wolfley v. Wooten

• Citation: 293 S.W. 73
• Decision Date: 21 February 1927
• Docket Number: No. 19537.,19537.
• Parties: WOLFLEY v. WOOTEN (INTERNATIONAL LIFE INS. CO., Garnishee).
• Court: Court of Appeal of Missouri (US)

293 S.W. 73

WOLFLEY v. WOOTEN (INTERNATIONAL LIFE INS. CO., Garnishee).

No. 19537.

St. Louis Court of Appeals. Missouri.

February 21, 1927.

Rehearing Denied March 15, 1927.

Appel from St. Louis Circuit Court; Victor H. Falkenhainer, Judge.

Suit by Theodore J. Wolfiey against Willie T. Wooten, with the International Life Insurance Company as garnishee. Judgment for plaintiff, and the garnishee appeals. Reversed.

John M. Atkinson, of St. Louis, for appellant.

Hat & Dame, of St. Louis, for respondent.

BENNICK, C.

This is an appeal by the International Life Insurance Company, as garnishee, from a judgment rendered against it for the sum of $1,477.60. On January 3, 1923, plaintiff instituted an action on a promissory note against defendant Wooten and sued out a writ of attachment, obtaining service on her in the state of Arkansas in accordance with the provisions of the statutes providing for service of summons in another state, and on said date sued out a writ of garnishment, which was duly served upon the International Life Insurance Company, as garnishee. Plaintiff obtained a judgment against defendant in the original cause for the sum of $1,410.77.

In due time plaintiff propounded interrogatories in conventional form to the International Life Insurance Company, as garnishee, to which it answered, denying that it had in its possession or under its control any property of or owed any money or credits to defendant; and for further defense it alleged that defendant and her husband, James A. Wooten, had jointly obtained from it a loan in the sun of $7,000, as evidenced by their joint promissory note; that at the time of the death of said James A. Wooten he was insured in a certain policy of life insurance issued by garnishee in the sum of $6,000; that said policy of insurance had been taken out by him for the purpose of furnishing to garnishee additional security for the loan aforesaid; that at the time of the death of said James A. Wooten, and at the time said policy of insurance became due and payable, defendant and her slid husband were jointly indebted to garnishee in the sum of $8,414.42; and that, under and by virtue of the provisions of said policy of life insurance, the garnishee had a right to apply the proceeds of said policy upon the indebtedness of defendant and her husband.

In due course, plaintiff filed his denial of garnishee's answer, in which he denied that the garnishee had any right to apply the proceeds of said policy of life insurance upon the indebtedness of defendant and her husband to the garnishee; and he averred that, if the garnishee had such a right, it did not exceed the right to apply a sufficient portion of $6,000, to pay up the defaulted indebtedness on the loan of $7,000, and alleged that there would be an amount in excess of $2,500 remaining from the proceeds of the policy of life insurance to be applied upon the debt due and owing to plaintiff.

The reply of the garnishee to plaintiff's denial of its answer was itself a denial of each and every allegation of new matter therein.

After a trial before the court, a jury having been waived, judgment was rendered against the garnishee as aforesaid, from which it has duly perfected its appeal.

The evidence discloses that defendant and her husband, James A. Wooten, who resided in Desha county, Ark., on December 1, 1919, obtained an improvement loan in the sum of $20,000 from appellant, International Life Insurance Company, through the instrumentality of plaintiff, a loan agent, with offices in the city of St. Louis. As a matter of fact, however, appellant actually loaned them only $7,000, and agreed to lend them an additional sum of $13,000, provided that certain improvements were made by them within three years upon the lands in Desha county, Ark., upon which a deed of trust securing the indebtedness was at the time given. The loan was made for a period of 10 years from December 1, 1919, and a series of interest notes were executed, one payable on the 1st of December of each year thereafter.

The principal note executed to appellant by defendant and her husband was in conventional form and contained the following acceleration clause:

"It is expressly agreed that if default be made in the payment of interest, or in case of failure to perform any of the covenants in the trust deed securing this note, then at the option of the legal holder hereof, the said principal sum, with the interest due and accrued thereon, shall become at once due and payable, without notice, and may be collected immediately, nothing herein contained to the contrary notwithstanding."

The deed of trust, executed by defendant and her husband, provided (among other things) that they should pay all taxes and assessments, general and special, and insurance and other charges against the property and make certain improvements upon the land. Said deed of trust also contained an acceleration clause in the following terms:

"But should default be made in the payment of any evidence of indebtedness hereinbefore referred to (whether principal note or interest coupon) or any part thereof as the same becomes due and payable, or if there shall be a breach of any covenant or warranty herein, express or implied, or if the said grantor fails or neglects in any respect to fully keep or perform any one or more of the covenants and agreements herein contained, or if there shall be any default in the immediate repayment to trustee or International Life, their successor, or assigns, of any amount paid by it or them, if any, for any and all taxes, general or special, redemption, insurance, or to discharge liens, or to protect title or possession, with interest as hereinbefore specified, then International Life, its successor or assigns, may thereupon, at its or their option, consider and declare without notice as immediately due and payable (and enforce the collection of) not only the principal note or notes and interest coupon or coupons, if any, previously due according to its or their terms, but also all principal indebtedness evidenced by any and every other principal note hereinbefore referred to, with interest thereon at the rate therein specified from its last preceding interest coupon maturity by the tenor and effect thereof, and this deed of trust date until paid, without notice, though not then due may thereupon be foreclosed by court proceeding and payment of all indebtedness enforced."

On December 29, 1919, a policy of life insurance in the sum of $6,000 was issued by appellant to James A. Wooten, naming defendant as the beneficiary therein. This policy was taken out by Wooten at the suggestion of plaintiff, was a transaction entirely separate from the negotiations for the loan, and was not intended as additional collateral therefor. Said policy contained the following clause:

"Any indebtedness to the company will be deducted in any settlement of this policy, and, in the event of the death of the insured, any balance of the premium for the insurance year remaining unpaid will also be deducted."

On December 23, 1922, James A. Wooten died, although the proof of his death was not filed with appellant until March 23, 1923. It appears that the first two interest notes had been promptly paid by him as they fell due, but that the...