Opinion ID: 1180377
Heading Depth: 1
Heading Rank: 1

Heading: Facts, contentions and findings relating to insurance policies.

Text: In 1938 the corporation issued bonds to raise needed capital funds. To make the purchase of these bonds more attractive, and out of concern over what might happen if Mr. Newbern should die, it was suggested that $50,000 in life insurance be taken out on his life, naming the corporation as beneficiary. Two policies, each for $25,000, were then applied for by and issued to Mr. Newbern, and the first premiums were paid by him. These policies both provided that the beneficiary could be changed without notice to the designated beneficiary. In 1940 and 1942 these two policies were converted from term to straight life policies, but the beneficiary was not changed. Most, if not all, of the remaining premiums on the policies, however, were paid by the corporation, totaling more than $50,000. [2] The corporation was not reimbursed by Mr. Newbern for these premium payments. The books of the corporation did not show these payments as business expense. Neither were these policies listed on its books as corporate assets, at least since 1955. There was evidence, however, that Mr. Newbern had given instructions not to do so. There was also evidence that for tax purposes the premium payments were reported as an asset purchase by the corporation. On the other hand, Mr. Newbern did not report these premium payments by the corporation as income to him. In subsequent years these policies were borrowed upon by Mr. Newbern to provide funds for use by the corporation. They were also later assigned to the Small Business Administration as security for a loan by it to the corporation. In early 1968, after the SBA loan had been paid and after negotiations were under way for the sale of defendant's stock, Mr. Newbern changed the beneficiary of these policies to his wife and took them with him when he later left the corporation. He testified, however, that before the stock purchase was completed he informed the representative of the purchasers of his intention to do so. Defendant Newbern contends that he was at all times the owner of these policies, with the right to make a change of the beneficiary, and that the payment of premiums by the corporation was in consideration for the use of the policies by the corporation in the financing of its operations. Defendant also says, without reference to the record, that his conduct with respect to the policies was open and above board and certainly known to the Board of Trustees. Plaintiff denies that its trustees had knowledge of, much less authorized or approved of any such understanding. Defendant has not called attention to any reference in the minute book and records of the corporation which shows the authorization or approval by the trustees of any such understanding and we have found none. At the time of trial plaintiff's position was not entirely clear. Thus, while never abandoning the contention, as alleged in its complaint, that the policies were assets of the corporation, with a cash value of over $32,000, the principal thrust of plaintiff's contentions on trial was that, in any event, and even if the policies belonged to Mr. Newbern, rather than to the corporation, it had paid premiums totaling over $50,000 and was entitled to repayment of that entire sum. After considering these contentions by the parties, the trial court found, in effect, that the insurance policies belonged to defendant Newbern and were not assets of the corporation. The trial court also found, however, that payment of the premiums by the corporation constituted a loan or advance to Mr. Newbern for which he was indebted to the corporation to the extent that such a debt was not barred by the three year Washington statute of limitations. (Rev.Code Wash.Ann. § 4.16.080) Accordingly, the trial court entered a judgment in favor of plaintiff for $1,968.50, representing the premiums paid by the corporation within that three year period, on April 1, 1967, with interest from that date. Mr. Newbern apparently paid the subsequent premiums. As previously stated, that decree also denied all other claims by plaintiff except for the cancellation as of May 1, 1970, of the lease to the so-called tank farm. Plaintiff then appealed from that decree, except for its provisions canceling the lease and entering judgment for $1,968.50 for the 1967 life insurance policy premiums. No cross-appeal was filed by defendant and he paid into court the amount of that judgment. Plaintiff accepted that payment and signed a partial satisfaction of judgment, with a notation purporting to do so without prejudice to that portion of the decree being appealed. Defendant contends that acceptance of the payment of that judgment precludes appellant from any further recovery, particularly on the matter of the insurance policies, upon the ground that a litigant cannot accept the benefits of a judgment and also appeal from it, citing Anderson v. Anderson, 232 Or. 160, 374 P.2d 479 (1962), among other cases.