New York Life Insurance Co. v. Nashville Trust Co.

On Petition to Rehear

Burnett, Justice.

A petition to rehear has been filed herein raising four points, to wit: (1) a reargument is had on the main question presented originally that the fraud of the insured Buntin was intrinsic and not extrinsic; (2) that we erred in overruling the defense of the six and ten year statute of limitations; (3); that we inadvertently said that part of the relief sought was “newly discovered evidence” and (4) that we were wrong in saying that Buntin changed his beneficiary “shortly before he left.”

We have very carefully read, and to the best of our ability analyzed, this 34-page petition to rehear as well as all authorities cited therein. To all intents and purposes, and so far as any particular question is raised herein, these questions were raised, briefed, and argued at length at the original hearing. Two questions raised are of no particular significance insofar as the decision is concerned.

The first question that is argued is a reargument of that so ably made originally on the question of whether *547or not tire evidence in this case was intrinsic or extrinsic. This is conceded on page 33 of the brief, bnt it is said that we “made a manifest mistake which rendered the decree of the Conrt manifestly erroneous (Gibson’s Suits in Chancery, Sec. 1319)”.

The main attack by this petition is on' the Hazel-Atlas ease. It is argued that in that case the fraud was practiced by the successful party and its attorney. In the instant case, Buntin, the insured, was the person or man who concocted the scheme and who was successful in it. Buntin reserved the right to change the beneficiary in his policy. When he did so the beneficiary has no interest hut Buntin is the real party in interest. Life Association v. Winn, 96 Tenn. 224, 33 S.W. 1045. In that case this Court said:

“* * * the beneficiary acquires no vested interest until the death of the assured occurs. Until this event takes place, owing to the right of revocation which is by the condition reserved to the assured, the beneficiary has a mere expectancy, depending upon the will and act of the assured. * * * And this expectancy does not rise to the dignity of a property right. * * * The assured in such a policy (that is where the assured has the right to change the beneficiary) being the real party in interest, it follows that ‘no harm can possibly result from giving full effect to his admissions’ ”.

Upon Shepardizing this case we find that it has been followed, down to date, in a number of opinions by this Court during the last 50 or 60 years. In one such case, Merritt v. Scruggs, 172 Tenn. 368, at page 374, 112 S.W. 2d 825, 827, this Court referring to the Winn case, among other things said:

*548“In such, case, the death of the beneficiary before the death of the insured would authorize the company to recognize the insured as sole owner of the policy.”

Every member of this Court has written an opinion in this case. It will not profit anything to reargue this question as we have argued it backward and forward time and time again and we of the majority are well satisfied that our feet are on firm ground and that we have reached the right conclusion. We must overrule the first point raised in the petition.

The nest point raised by the petitioners is that the pleas of the statute of limitations should have been sustained. It seems to us that petitioners have misconceived the rule as it applies to our finding in this case. No attack is made on the finding of the majority that the Bank is holding the funds that it now possesses as a constructive trustee. It is the conception of petitioner that the statute started to run when the funds were received by the Bank. This argument overlooks two well-established facts, (a) that when the bank received this money the Insurance Company had no cause of action and could not come into court then because Buntin’s fraud was not discovered until Buntin was himself located, and (b) that the whole basis of the present lawsuit is the discovery of Buntin alive and thus the uncovering of the fraud which he committed upon the Insurance Company and the Court, and it is for this fraud that wrongful retention of the money that the bank is held as a constructive trustee.

Our case of Akers v. Gillentine, 191 Tenn. 35, 231 S.W. 2d 369, 371, clearly and fully sets forth what the law is under such a situation.

“In most of the cases wherein the statute of limitations has been relied on as a defense the courts ‘have *549applied the statute from the date of actual or imputed knowledge by the cestui of the wrongful holding.’ 4 Bogert, supra, Sec. 953, p. 213; Haynie v. Hall’s Ex’rs, 25 Tenn. 290, 42 Am. Dec. 427; Haynes v. Swann, 53 Tenn. 560.”

And then later on in that same opinion the distinction is again made, and this is particularly applicable in view of the apparent misconception of the matter by the petitioners here. This Court said:

“If we were dealing with creditors in the ordinary sense the date of the recordation of the deed would be applicable. Here though we have determined that under the allegations herein a constructive trust is made out. The very foundation of such trusts is an adverse inequitable holding wherein it necessarily follows that one is not bound until he learns of this wrongful holding or could have learned of it by reasonable diligence. ’ ’ .

In 34 Am. Jur., Limitation of Actions, sec. 165, page 132, it is said:

“By the weight of judicial authority in this country, in actions at law as well as in suits in equity, to obtain relief against or damages for fraud of which the person injured remained ignorant for a time, either because of the concealment of the fraud or because it was of such character as to imply concealment, the bar of the applicable statute of limitations commences to run only from discovery or from when with reasonable diligence, there ought to have been a discovery of the facts constituting the fraud. ’ ’

In this petition the petitioners cite the cases of Boro v. Hidell, 122 Tenn. 80, 120 S.W. 961; Howell v. Thompson, *55095 Tenn. 396, 32 S.W. 309; Barnes v. Barnes, 157 Tenn. 332, 8 S.W.2d 481; and Lee v. Harris, 188 Tenn. 373, 219 S.W.2d 892, as authority for their position. All of these cases are good law and applicable to the facts there ruled on but the facts in none of these cases are in any way similar to or applicable to the facts in the instant case.

In the Boro case the court there found that through an agent the complainant had knowledge of the fraud for 18 years before the suit was brought. This is not a constructive trust case. In the Howell case the statute of limitations is involved but the facts in that case did not involve a constructive trustee and the rights of the cestui against such a trustee. In the Barnes case it is said that in the absence of fraudulent concealment an action to correct a mistake of a deed must be brought within 10 years after the accrual of a cause of action. That is not the case here. In the Lee v. Harris case nothing there involved is similar to that here. That case merely held that in the absence of fraudulent concealment that the 10-year statute applied.

Some intimation is made that we in the present case are attempting to graft on another interpretation of the limitation statute. This is far from true. As'is shown by the citation of authorities, as quoted in the Akers v. Gillentine case, that rule goes back as far as 24 Tenn., or more than 100 years. It is bound to be the right, sensible and equitable rule.

The petition here somewhat attempts to castigate this Court in holding one way in Akers v. Gillentine, supra, and in denying a petition for certiorari in the same case as is reported in 33 Tenn. App. 212, 231 S.W.2d 372. A close and careful analysis of those two cases, as reported, will clearly show the even casual reader that the Court *551of Appeals expressly by clear language held that the case as reported in 191 Tenn. 35, 231 S.W.2d 369, was the law of the case insofar as the frame of the bill in that case was concerned wherein a constructive trust was alleged. In the Court of Appeals case after the allegations of a constructive trust had been alleged and the law applied as they were there alleged the case was remanded and on proof the Chancellor as well as the Court of Appeals found as a fact (1) that the complainants had failed to prove that the proceeds of the note were applied to the purchase of land involved, (2) that the note was not pledged to the bank as collateral security, and (3) there was no constructive trust involved. Thus after such a finding in the Court of Appeals case the Court very properly applied the seven-year statute, dealing with land and its possession, and held that such a statute started running more than a year before the bill was filed. This point must be overruled as we are absolutely confident that it was divided correctly in the original opinion.

The next question sought to be raised is that we said in the outset of our original opinion that among other things that the case was based on was “on newly discovered evidence”. Our recollection is that this question was argued at the bar. Whether it was contradicted or not a casual reading of our original opinion herein clearly shows that this had nothing to do with the opinion one way or the other. It was merely a preliminary statement of the drafts of the opinion. With this statement concerning the matter this point is likewise overruled.

The last point raised in the petition is that this Court in the majority opinion inadvertently said that Buntin had changed the beneficiary “shortly before he left”. A *552casual reading of the majority opinion will show that this fact had nothing in the world to do with the determination of the case. Time of course is a relative proposition. The changing of the beneficiary, which was done some two years prior to the time Buntin left, had no weight one way or the other as far as the determination of this present case was concerned. We did not intend that it have any effect one way or the other in the determination of this case. The only possible purpose that it could have and did have in the determination was to show that Buntin had the right under the terms of his policy to change the beneficiary whenever he saw fit and that exercising this right he did change the beneficiary. As to times and dates they were not mentioned and we did not consider them material and do not now insofar as this is concerned. For as said above in our reference to Life Assurance Co. v. Winn, supra, Buntin having this right to change his beneficiary he was the real party in interest.

We have read and re-read the petition herein and the authorities and carefully reconsidered the matter. As a whole it is nothing but a reargument of a portion of what was so well argued in the first instance. We are satisfied that we have reached the right conclusion. In view of this fact the petition to rehear must be overruled.