Opinion
No. 32429.
November 30, 1936.
1. INSURANCE.
In suit for cash surrender value of life policy, heirs and estate of deceased brother of insured who had paid premiums on policy and obtained loans thereon without consent of insured held not "necessary parties," where insured sought no relief from heirs and estate.
2. PARTIES.
Interest of a party to a suit must be considered as to quality and nature, and new parties will not be brought into suit at instance of defendant, for his convenience, or in order that he may file cross-bill against such parties.
3. APPEAL AND ERROR.
In suit for cash surrender value of life policy, whether insured, who delivered policy to his brother, executed absolute unconditional gift of policy to brother, who caused himself to be made beneficiary and paid premiums on policy, held for chancellor.
4. GIFTS.
Delivery of chose in action is prima facie evidence of a gift thereof.
5. INSURANCE.
Where insured's brother to whom insured delivered life policy caused himself to be made beneficiary, paid premiums on policy, and received loans on policy without authority from insured, insured who, soon after death of his brother, made inquiry of insurer and demanded payment of cash surrender value, held not estopped from asserting claim against insurer.
6. WITNESSES.
In suit for cash surrender value of life policy which had been delivered to insured's deceased brother who, without authority from insured, had obtained loans on policy, insured held not incompetent witness because of fact his deceased brother's estate might be affected prejudicially by outcome of suit.
7. WITNESSES.
To exclude a party as a witness to prove his claim, the claim must be against the estate of deceased person in suit in which party proposes to testify.
APPEAL from the chancery court of Genada county. HON. L.A. SMITH, SR., Chancellor.
H. Talbot Odom, of Greenwood, for appellant.
The estate of Sam Brunson was a necessary and proper defendant, and the overruling of appellant's plea of nonjoinder was prejudicial to the rights of the appellant.
6 Couch on Insurance, sec. 1458z, pages 5264, 5265; Griffith's Chancery Practice, sections 102, 107, 108 and 382; Coulson v. Harris, 43 Miss. 728; McPike v. Wells, 54 Miss. 136; Elmendorf v. Taylor, 10 Wheat. (U.S.) 152, 168 (6 L.Ed. 289); Lemmon v. Dunn, 61 Miss. 210; Hooks v. Burns, 168 Miss. 723, 152 So. 469.
Appellee had divested himself of all titles to the insurance policy. We take the position that the insurance policy was an absolute gift from the insured to Sam Brunson. Every essential necessary to a completed gift inter vivos is present.
McClellan v. McCauley, 158 Miss. 456, 130 So. 145; 28 C.J. 626, sec. 15; McDonald v. McDonald, 110 So. 291; Cockrell v. Cockrell, 79 Miss. 569, 31 So. 203; First National Bank v. Liberty Trust Co., 134 A. 210, 47 A.L.R. 731.
The possession of the policy by Sam Brunson was prima facie evidence of his ownership.
Couch on Insurance, 1458o, page 5231.
From the authorities cited and the manner in which both Sam Brunson and the appellee treated the policy over a period of years, there can be no question but that Sam Brunson was both the legal and equitable owner. Certainly the appellee is estopped from asserting any claim therein after such a lapse of time.
37 C.J. 438, sec. 153; 21 C.J. 1060.
Appellee was incompetent as a witness under section 1529 of the Mississippi Code of 1930.
Whitehead v. Kirk, 104 Miss. 776, 62 So. 432, 61 So. 737; Garner v. Townes, 134 Miss. 791, 100 So. 20.
The decree is opposed to the overwhelming weight of the evidence.
Griffith Chancery Practice, sec. 674; Tarver v. Lindsey, 161 Miss. 379, 137 So. 93. S.C. Mims, Jr., of Grenada, for appellee.
As to the first point, that is the nonjoinder of the Brunson estate, the appellant did not in its plea set up such facts as would entitle it to the relief in this regard. And the record discloses that it failed to sustain the allegations it made in its plea. As to its allegation that it would be prejudiced in its effort to establish its defense to the effect that the policy in question had been given to Sam J. Brunson unless the estate was made a party to this suit, we find that Ben Chambley, the administrator of the Brunson estate, and stepson of Brunson, was introduced as a witness for the appellant and proved to be a friendly witness, and the presumption is that any proof that would have been available if the estate had been made a party defendant in this suit was available to the appellant.
As to the rights and interest of the Brunson estate, we find that the proof in this record disclosed to the satisfaction of the Chancellor that such estate had no interest in the insurance policy, and was therefore not a necessary party.
Lemmon v. Dunn, 61 Miss. 210.
As to the second point, that is the allegation in the answer and defense of the appellant, that the appellee had divested himself of all title to the insurance policy, the same raised a question of fact. And as the same constituted an affirmative defense the burden was upon the appellant to establish the same. This it did not do to the satisfaction of the Chancellor. The Chancellor heard and saw the witnesses testify and found this issue against the appellant. The appellant, however, takes the position that the Chancellor in his finding and determination of the facts in this record was manifestly wrong and should be reversed for the reason that he did not give due weight to the presumption that men are honest and that Sam J. Brunson would not have perpetrated a fraud. It seems that learned counsel for appellant takes the position that it is all right for the Chancellor to ignore the presumption that the appellee is an honest man but that it is a reversible error to assume that Sam J. Brunson was dishonest and perpetrated a fraud on the appellant. Furthermore, counsel loses sight of the fact and rule of evidence that presumptions must yield to facts.
The courts have held, both state and federal, that the protection received by beneficiary under life insurance policy was sufficient consideration for the payment of premiums on the part of the beneficiary. In the instant case Sam J. Brunson received the protection under a two thousand dollar policy in return for paying the premiums due thereunder. Regardless of this feature of the case, it was no concern of the appellant, as without question this record reflects that the dividends paid and loans made by the appellant was intended by the appellant to be made to the appellee, and it cannot insist that any act or conduct on the part of the appellee misled it in any regard.
As to the third point, competency of appellee as a witness, we are of the opinion that the case of Love v. Stone, 56 Miss. 449, is controlling.
I may be in error, but my understanding is that the decree entered in this cause cannot in any way affect the Brunson estate, nor could the decree nor any of the proceedings be used as evidence in a suit by the appellant against the Brunson estate.
The appellee, W.E. Brunson, filed his bill in the chancery court of Grenada county against the appellant, Security Mutual Life Insurance Company, alleging, in substance, that the insurer had executed a policy of insurance on appellee's life on the 23d of September, 1911, for the face amount of two thousand dollars, the premiums thereon being fifty-six dollars and fifty-nine cents to be paid each year for twenty years, whereupon appellee was entitled to certain settlements, among others, a cash surrender value of approximately one thousand dollars. The bill further alleged that all the premiums on the policy had been paid for the twenty-year period; that Sam J. Brunson was named beneficiary therein; that appellee was entitled to approximately one thousand dollars as the cash surrender value; that appellee did not have the policy; and that the insurer should be required to produce it in court and make discovery as to the actual value of the same. The prayer of the bill was for the recovery of the cash surrender value of the policy, according to the contract.
Appellant filed a motion suggesting a nonjoinder of parties, alleging that the estate of Sam J. Brunson was a proper party defendant; that Sam J. Brunson had died since the policy became paid up, and that there was an administration of his estate; that in the lifetime of Sam J. Brunson the appellee had made an absolute, unconditional gift of the policy to him; that Sam J. Brunson paid the premiums thereon for fifteen years; and that during his lifetime he, as claimed by W.E. Brunson, without the knowledge and consent of the complainant, obtained from the insurance company at various times loans on said policy, amounting in the aggregate to the cash surrender value thereof
The court below overruled the motion to require the appellee to make the estate, or the heirs, of Sam J. Brunson parties to the bill; whereupon the insurance company filed its answer, in which it admitted the execution of the policy, that the premiums had been paid for twenty years, the death of Sam J. Brunson; and averred the absolute, unconditional gift of the policy by the insured to Sam J. Brunson in his lifetime, and the making of the loans thereon with the knowledge and consent of the insured. As part of the answer, the motion for nonjoinder was renewed as a plea. The court, having heard the evidence, entered a decree in favor of the insured, W.E. Brunson, against the insurance company for the sum of nine hundred twenty-four dollars and twenty-nine cents.
1. On the assignment of error that the heirs, or estate, of Sam J. Brunson were necessary parties to the suit, we are of opinion that the court did not err in overruling the motion or in declining to sustain the plea to the same effect. There was no contention on the part of W.E. Brunson, the appellee, that his brother, Sam J. Brunson, owed him anything, nor did he seek any kind of decree against him, and it is evident from the language of the original bill that this is a straight suit for the recovery of the cash surrender value of the policy issued on his life. It might have been advantageous to the insurance company if the Sam J. Brunson estate, or his heirs, had been brought in by the appellee to answer the bill — that advantage being to recover from the estate by way of cross-bill the amount collected from the insurance company as loans on the policy by signing the name of W.E. Brunson on the checks issued by the company for such loans, and by signing W.E. Brunson's name to the applications for the loans, in the event a recovery was had by W.E. Brunson against the insurance company. There is nothing in the pleadings to show that there was a common right or interest in the subject matter of this litigation between Sam J. Brunson and W.E. Brunson, and there is nothing to show that the court here could not proceed to final decree and decide the case as between the litigants before it and do them justice. The interest of a party must be considered as to quality and nature, and new parties will not be brought into a suit at the instance of the defendant therein for the sake of the defendant's convenience, or in order that he may file a cross-bill against said new parties. Lemmon v. Dunn, 61 Miss. 210; Coulson v. Harris, 43 Miss. 728; McPike v. Wells, 54 Miss. 136.
2. It is the main contention of the appellant that the court below erred in holding that the insured had not made an absolute, unconditional gift of the insurance policy to his brother, Sam J. Brunson, on or after the time the name of the beneficiary was changed to Sam J. Brunson. This policy was issued on the life of W.E. Brunson in 1911, payable to his mother, Louisa Brunson. In January, 1916, the policy was evidently delivered by W.E. Brunson to Sam J. Brunson; the latter made application to the insurer for a change of beneficiary, and in that application requested that he be made the beneficiary. The proof is undisputed that Sam J. Brunson signed the name of W.E. Brunson for said change in beneficiary. It is also undisputed that W.E. Brunson agreed that the change of beneficiary should be thus made, but he denied signing the application. The change was made by the insurer on its books on January 18, 1916, and thereafter, until the policy was fully paid up in 1931, the beneficiary paid all the premiums, applying thereto for the most part the cash dividends paid by the insurer on the policy.
W.E. Brunson testified that he had no knowledge of the applications for, or the payments to Sam J. Brunson of, the several loans unquestionably made on the policy by the insurer. The evidence is undisputed that Sam J. Brunson in his lifetime had checks for these various loans sent to him addressed and payable to W.E. Brunson, and that he indorsed W.E. Brunson's name thereon together with his own indorsement. One application for a loan was acknowledged before a justice of the peace. W.E. Brunson denied that he had ever been before the justice of the peace and denied his signature. There was other testimony that the signature thereon was not that of W.E. Brunson.
The appellee further testified that he delivered the policy of insurance some time in 1916 to his brother, Sam J. Brunson, and his testimony is as follows:
"Q. Now, what happened to that policy? A. Well, I paid the premiums on 'em four or five years, and my brother taken it up.
"The Court: Your brother did what? A. Was payin' it after that.
"Q. I know, but what did you say `taken it over'? A. Taken this over, yes sir.
"Q. Under what condition did he take the policy? Were you married at that time? A. No, sir.
"Q. Were you able to pay the premiums? A. No, sir.
"Q. And you turned the policy over to him for him to pay the premiums on the policy. A. Yes, sir."
He further testified, with reference to the gift:
"Q. It was your understanding when you turned the policy over to him that he was to pay the premiums. A. Yes, sir.
"Q. What consideration did he get out of it? A. He had the protection of the policy.
"Q. He was going to get the two thousand dollars if you died before he did. A. Yes, sir.
"Q. And that was all he was going to get out of it. A. He had the protection for these twenty years, you see.
"Q. That's all he had. He was to pay the premiums and get nothing else. A. Yes, sir."
The witness denied any knowledge of the loans secured by his brother on the policy, and denied his signature to any of the checks issued by the company payable to W.E. Brunson, or that he had made any inquiry relative thereto. He denied that he had any conversation after the death of his brother with Chambley, the administrator of his brother's estate, in which he told him that the policy belonged to his brother Sam, and for that reason he was willing to make it over to Annie May Brunson, the daughter of Sam, or to his estate, and denied that he had given the policy to his brother.
It is not disputed that Sam J. Brunson in 1916 attended to having the beneficiary changed in the policy. In that application, which appeared to have been signed by W.E. Brunson, there is this language, after appointing Sam Brunson as beneficiary: "In the event of death of said beneficiary — before my death, then and in that case the proceeds thereof shall be payable to my executors, administrators or assigns."
Chambley testified that, after the death of Sam Brunson, W.E. Brunson admitted to him that the policy belonged absolutely to the deceased, Sam J. Brunson, and agreed to change the beneficiary so as to make the estate of Sam J. Brunson the beneficiary, and the witness secured blanks for that purpose, whereupon W.E. Brunson declined to execute the change of beneficiary application.
The justice of the peace who took the acknowledgment to one of the applications for a loan declined to identify W.E. Brunson as the party who came before him.
We think this statement of the evidence is sufficient to show that there was a sharp conflict therein. The chancellor found the facts in favor of W.E. Brunson, the insured. According to the application for change in beneficiary in 1916, when both brothers had very recently decided to make the change and did make the contract, it is a significant circumstance that the provision in that application was that, in case Sam J. Brunson died before W.E. Brunson, then the proceeds of the policy of life insurance were to be paid to the heirs and legal representatives of W.E. Brunson. It is also significant that Sam obtained the loans of the policy from the insurer in the name of W.E. Brunson.
We are not unmindful of the fact that delivery of the chose in action, the insurance policy, by W.E. Brunson to Sam J. Brunson is prima facie evidence of a gift thereof, but the explanation of W.E. Brunson as to the purpose of the delivery is not unreasonable or unbelievable. We are therefore of the opinion that the chancellor was warranted in his finding, and that the overwhelming weight of the evidence is not with the insurer. We are relieved from the necessity, in view of the facts of this case, of deciding whether or not a written contract of life insurance may be made the subject of absolute gift by an oral contract and manual delivery, or under what terms and conditions such an oral contract can be made, if at all.
There is no reason here for the application of the doctrine of estoppel. According to the finding of the chancellor, Sam J. Brunson imposed upon the insurance company by signing W.E. Brunson's name to applications for loans, and indorsed his name on the several checks issued therefor without any authority so to do. As we see it, under the oral contract, testified to by W.E. Brunson, he was not called upon to do or say anything relative to the insurance policy until after the death of his brother in September, 1934, when the title thereto was again vested in him for the benefit of his estate. Within a very short time after the death of his brother, he began to make inquiry of the insurance company and demanded payment of the cash surrender value. The evidence of W.E. Brunson as to his signature on checks and applications, being that of his brother and without his authority, while affecting the interest of his brother's estate, was not establishing a claim against that estate, which was not a party to the suit nor necessarily a party. The evidence was against the insurance company on its only real defense — a gift of the policy by W.E. Brunson to Sam J. Brunson in the lifetime of the latter. Love v. Stone, 56 Miss. 449. No right of Sam J. Brunson is involved in this suit. That his estate may be affected prejudicially in consequence of the result of this suit in W.E. Brunson's favor, and a future action by the insurance company against that estate, does not render W.E. Brunson incompetent as a witness in the present suit. "To exclude a party as a witness to prove his own claim or right, it must be against the estate of a deceased person in the suit in which he proposes to testify." The case of Whitehead v. Kirk, 104 Miss. 776, 61 So. 737, 62 So. 432, 51 L.R.A. (N.S.) 187, Ann. Cas. 1916A, 1051, is not in point here and the difference is clear. In that case the sole heir at law of a testator was his widow. The will devised all of his property to his sisters. The widow, as his only heir at law, contested his will on the ground that the husband was mentally incapacitated to execute a will. Her testimony disclosing the intimate relations between husband and wife tended materially to establish insanity of the husband and destroy the will. That accomplished, she took the property, depleted her husband's estate, and established her claim thereto in violation of the statute.
Affirmed.