Coleman v. Northwestern Mutual Life Insurance

273 Mo. 620 | Mo. | 1918

BLAIR, J.

Coleman is tnistee in bankruptcy of the estate of the George D. Allen Paper Company.

This is an appeal from an order overruling a motion to set aside a nonsuit taken when the trial court instructed for defendant in an action on a policy of insurance on the life of George D. Allen, president of the George D. Allen Paper Company, which company was the beneficiary in the policy as first issued. The question is whether the evidence required a submission of the case to the jury.

I. ' The policy expressly provided that Allen reserved no right to- change the beneficiary. Under the general rule that fact vested in the beneficiary an interest of which it could not be deprived without its consent.

*627Beneficiary There is no direct evidence that the board of directors of the Paper Company had formally authorized any change in the policy or that they had so conferred an agency upon the corporate officers to do so. There is in evidence a document attested by the corporate seal and ostensibly signed by Allen, as president, and Cavanagh, as secretary, of the Paper Company, which purports to be the act of the corporation and to authorize the change made. This writing is not conclusive. An instrument shown to be signed by the officers of a corporation and having the corporate seal affixed ordinarily raises a presumption that the officers acted within their authority and puts upon the objector the burden of showing the contrary. [St. Louis Public Schools v. Risley, 28 Mo. L. c. 419; Musser v. Johnson, 42 Mo. l. c. 79; City of Kansas v. Railroad, 77 Mo. 185; Koehler v. Iron Co., 67 U. S. l. c. 717; Pac. St. Bk. v. Coats, 205 Fed. 621; Chandler v. Hart, 161 Cal. l. c. 421, 423; 2 Thompson on Corporations, sec. 1928.] There were three stockholders. They were also the three directors, Allen, Cavanagh and Dana. Dana testified he agreed to the change some time in August after Allen told him it was to be made. The consent of the directors separately obtained and not given in a board meeting is not equivalent to formal action of the board. [Brinkerhoff Zinc Co. v. Boyd, 192 Mo. l. c. 613; Hill v. Rich Hill Coal Mining Co., 119 Mo. 9; 7 R. C. L. p. 439, Sec. 427; Sec. 3347, R. S. 1909.] There was no testimony that the board, as such, ever took any action regarding the policy, but testimony it had never done so. In these circumstances it cannot be held the presumption from the instrument warranted the instruction to find for respondent.

mheTcases Distinguished II. Counsel state in their briefs that the trial court gave the peremptory instruction on the authority of Judson v. Walker, 155 Mo. 166. The principal clues^on discussed concerns the applicability of the principle of that decision to the facts in this case.

*628, In that ease the facts were that Walker took out two policies on his life in 1888 and a third in 1891. All were payable to himself, his estate or assigns. The third policy Walker surrendered in January, 1894, and took in lieu a policy payable to his wife, if living; otherwise, to him or his estate. Four days later, the company consenting, he assigned the other policies to his wife and her children. All policies were kept alive, and in August, 1895, Walker died insolvent. His wife and five children survived him. Judson’s claim antedated the transfers of the policies and his judgment against Walker was recovered in January, 1895. He sued the wife and children to subject the policy proceeds to the payment of his judgment. He alleged the transfer was fraudulent as to him. The court held he could recover the cash surrender value of the policy at the date of transfer, plus the premiums thereafter paid, less the $500 premium exemption to which the statute entitled Walker; and that creditors can reach only the excess over $500 per annum paid by a debtor on policies and cannot reach the part of the proceeds of the policies produced by such excess. It was expressly held Walker had the absolute right to dispose of the original policies as he saw fit, subject to the qualification stated; that he could make any change he chose which did not defraud his creditors of rights under the rule laid down.

In that case, prior to the changes made in 1894 there was no third person named as beneficiary. Walker retained control as stated. In the instant case the policy insured the life of Allen, but named the Paper Company as the beneficiary and expressly stated Allen did not reserve the right to change the beneficiary. The company took a vested interest in the policy which neither Allen nor the Insurance Company could destroy. This is so well settled that it need not be discussed. In that case creditors of the insured sued. In this case the trustee of the beneficiary sues. The policy in this case matured on Allen’s death, in December, 1910. The fund- became due to the owner of the policy. The question is, who was the beneficiary when Allen died? *629The question is not whether the company could have transferred the policy, hut, under the pleadings, whether it had consented to a change of beneficiary. The Walker case is inapplicable.

■ Further, eases holding that -creditors are not defrauded when an insolvent debtor transfers a policy on his life, payable to himself or his estate, if the policy has, at the time of transfer, no cash value, are likewise inapplicable. There is no question here between Allen and his creditors, nor between the Paper Company and its creditors. Nor is the decision in Burlingham v. Crouse, 228 U. S. 459, in point. In that case, Section 70a of the Bankruptcy Act was construed and applied. The value of the policy when the petition in bankruptcy was filed was important. The policy was then still in force and the insured yet alive. In this case when the bankruptcy proceedings were begun Allen had died, ánd the policy had thereby matured and the fund was due the beneficiary. The question to which the case again returns is whether Mrs. Allen or the Paper Company was the beneficiary in the policy on .December 4, 1910. There is no question of exemption in this case; no question of the value of an unmatured policy upon the life of an insolvent debtor, nor of the right < of a creditor of such an one to take over a policy on his life and continue it by paying subsequent premiums thereon. The trustee’s rights being those of the Paper Company, the question in this case is simply whether that company had in any way deprived itself of the right to recover on the policy.

Corporation' jury III. Respondent contends the evidence shows Allen at all times controlled and managed the affairs of the corporation and that this enabled him to bind it in changing the beneficiary in the policy. First, the ev^ence tending to prove Allen’s exercise personal control was oral. It was not conclusive. Its credibility was for the trier of the facts. Second, though the trier of the facts might find Allen controlled and managed the general business *630of the company without let or hindrance, yet the facts found might not warrant the inference of authority to change the beneficiary in an insurance policy. [Sparks v. Dispatch Trans. Co., 104 Mo. l. c. 540.] Even if the facts found warranted such an inference, it was for the trier of the facts to imply therefrom the authority to act in the particular case. [Sparks v. Dispatch Trans. Co., 104 Mo. l. c. 539, 540; Sec. 2993, R. S. 1909.] The evidence of Allen’s control did not, therefore, justify the court in sustaining the demurrer.

IY. Did the corporation ratify the change or did it estop itself to set up want of authority in Allen and Cavanagh?

s oppe. Allen, Cavanagh and Dana were the only stockholders and only directors of the company in August, 1910, when the change was made. The evi(jence tends to show that the two former, president and secretary, respectively, of the company, executed in its apparent behalf and sealed with the. corporate seal a document whose sufficiency, on its face, to justify respondent in making the change of beneficiary is not questioned. While no action of the board of directors, as a board, supports this document, yet the evidence tends to show each of the three directors, they being all the stockholders, had knowledge of the proposed action and all consented to it; Allen and Cavanagh by signing the instrument officially, and Dana orally," according to his testimony. Upon the faith of this document, according to the evidence, respondent changed the beneficiary, substituting Allen’s wife for the company. . These men remained the only directors and stockholders until the middle of September or the first of October, 1910. At that time Dana was succeeded by Mrs. Allen. For the quarterly premium due in September, 1910, Allen gave his personal note, and the Insurance Company’s agent advanced the cash to his company. December 3, 1910, this note, without respondent’s knowledge, was paid through a bank with the Paper Company’s money. December 4, 1910, Allen *631died. Cavanagli, in connection wit]! the proofs of loss, made affidavit that none other than Mrs. Allen had any interest in the policy. December 23, 1910, the company paid Mrs. Allen the face of the policy and a post mortem dividend, aggregating $50,241.50. At no time, according to the evidence for respondent, did any stockholder, director or other person suggest to the Insurance Company that there was any want of authority for the execution of the instrument in question. There was evidence pro and con on the question whether the company was insolvent in August, 1910, but there is no evidence respondent had any knowledge of such insolvency, if it existed. Such is the tendency of the evidence upon the question of ratification and estoppel.

(a) In this case if the Paper Company is estopped, then is the trustee estopped? [Pott & Co. v. Schmucker, 84 Md. l. c. 556.]

The answer admits the issuance of the original policy and the change of name of the Paper Company. It avers that the Paper Company. ‘ ‘ duly released all its interest in the” policy and, together with Allen, “duly requested defendant to substitute one Rhoda Allen, wife of said George D. Allen, as beneficiary in the place and stead of said Paper Company;” that Allen and the Paper Company “duly surrendered” the policy, and that defendant, pursuant to said request, on August 29, 1910, issued a policy, under the same number and for the same amount, insuring Allen’s life in favor of Rhoda Allen instead of in favor of the Paper Company; that Allen died December 4, 1910, and that defendant on December 24, 1910, paid Rhoda Allen the amount of the policy, $50,241.50.

This is a plea that the Paper Company legally authorized the change of beneficiary. Neither estoppel nor laches, relied upon as estoppel, is pleaded. In this case neither could be relied upon without being pleaded. [Turner v. Edmonston, 210 Mo. l. c. 428; Blodgett v. Perry, 97 Mo. l. c. 272, 273; State ex rel. v. Ry. Co., 140 Mo. l. c. 555; Cockrill v. Hutchinson, 135 Mo. l. c. 75.] Nor was there a waiver of the plea. [McDonnell v. *632DeSoto Sav. & Bldg. Assn., 175 Mo. l. c. 275.] For this reason and because the facts tending to prove estoppel and laches are not all admitted hut depend in esential particulars upon the testimony of witnesses whose credibility was for the jury, the giving of the peremptory instruction cannot be sustained on this phase of the case.

(b) While. ratification' is equivalent to antecedent authority and may bé shown under a general allegation that the- act is that of the principal (McLachlin v. Barker, 64 Mo. App. l. c. 526), yet there is not a sufficient basis of conclusively established facts to inquire, as a matter of law, that the court find a ratification. [Calumet Paper Co. v. Haskell Show Ptg. Co., 144 Mo. l. c. 338; Tyrell v. Railroad, 7 Mo. App. l. c. 299; Campbell v. Pope, 96 Mo. l. c. 473; First National Bank v. Fricke, 75 Mo. l. c. 184.] That there is evidence of ratification .is not enough. In the absence of a showing conclusively establishing the facts making out ratification, that question of fact, like any other, is for the jury.

Y. It is quite clear from the preceding paragraphs that there is no ground upon which, we can direct a judgment for appellant. The judgment is reversed and the cause remanded for further proceedings not out of harmony with this opinion.

All concur, except Bond, P. J., absent.