Kansas City Life Insurance v. Rainey

ON MOTION FOR REHEARING. [5] Friends of the court have joined with appellant in urging a rehearing in this case and its transfer from Division One to the Court en Banc. The arguments for doing so are the same. Our decision is claimed to be in irreconciliable conflict with the decision in Cartall v. St. Louis Union Trust Co.,348 Mo. 372, 153 S.W.2d 370. That decision must be read in the light of the facts considered. The question there for consideration was whether the requirements for making an inter vivos gift had been fully complied with. It was contended that the declarations of a husband who owned bearer bonds were sufficient to pass title to the bonds at his death to his wife although the husband had never relinquished possession of the bonds which were found in his safe deposit box. The court found there was no delivery of the bonds to the wife and therefore no gift in praesenti to her.

Other cases relied on are Trautz v. Lemp, 329 Mo. 580,46 S.W.2d 135; and State ex rel. Union National Bank of Springfield v. Blair, 350 Mo. 622, 166 S.W.2d 1085. The facts in the Trautz case are similar to those in the Cartall case. The question was whether there was an inter vivos gift of shares of stock. The court found the gift was not completed by delivery and the attempted disposition of the stock was testamentary in character. State v. Blair follows the Cartall case and affirmed the principle requiring a delivery to the donee in order to transfer the title of a gift intervivos.

The parties seek to impose the same rule with respect to the policy in question. They argue there was no transfer of title to the beneficiary before Hall's death so that payment to her by the insurance company at Hall's death would be a testamentary disposition. Such rule is not applicable here. We have held the policy is a contract for the benefit of a third person. Hall disposed of his money when he paid it to the insurance company as consideration for the contract. Title was then transferred. The money was no longer Hall's property. It never again became part of his estate to be transferred at his death. Therefore the policy may not be held to be a testamentary disposition.

[6] It is further claimed our ruling that a donee beneficiary is entitled to enforce a contract made for his benefit even[628] though he is a stranger to both the contract and the consideration is in conflict with Howsmon v. Trenton Water Co.,119 Mo. 304, 24 S.W. 784; City of St. Louis v. Wright Contracting Co., 202 Mo. 451, 101 S.W. 6; Forgey v. Macon Telephone Co.,291 Mo. 539, 237 S.W. 792 and Uhrich v. Globe Surety Co.,191 Mo. App. 111, 166 S.W. 845. We do not find this to be so. After announcing the general rule these cases hold to the effect that third persons who are only collaterally and incidentally benefited by the contract are not entitled to enforce it. In the case at bar the contract is for the direct benefit of a third party expressly designated. The fact that performance is postponed until the death of the promisee does not affect the third party's rights.

The motion for rehearing and transfer to the Court en Banc is overruled. All concur.