New York Life Insurance v. Occidental Petroleum Corp.

MARKS, J. This is an action in interpleader in which the New York Life Insurance Company sought to have determined which of two adverse claimants, Occidental Petroleum Corporation or Leal Garbett, were entitled to the benefits of two insurance policies on the life of Leonard Garbett. The trial court awarded the money to the Occidental Petroleum Corporation and Mrs. Garbett has appealed from the judgment.

The appeal is on the judgment roll. We must assume that all findings of fact were supported by ample evidence. Certain findings of fact were mistakenly placed in the conclusions of law but this does not detract from their efficacy as findings.

The following facts are gleaned from the findings: Leonard and Leal Garbett were husband and wife at all times material here and up to the time of the death of Leonard on August 2, 1937. On May 14, 1919, and on April 24, 1924, the New York Life Insurance Company issued its insurance policies on the life of Leonard Garbett, with Leal Garbett as beneficiary.

On April 30, 1930, and for a number of years prior thereto, Leonard Garbett was secretary and member of the board of directors of the Occidental Petroleum Corporation; on that day he was indebted to that company in a sum in excess of $90,000 which he had “embezzled and misappropriated” from the funds of the company; the embezzlement was discovered on April 30, 1930; on May 2, 1930, Leonard and Leal Garbett, for the purpose of liquidating the indebtedness of Leonard Garbett, assigned the policies to the Occidental Petroleum Corporation.

On May 14, 1930, as part of the same transaction, the Occidental Petroleum Corporation entered into a contract in [749]writing with Leonard and Leal Garbett wherein they acknowledged the indebtedness and jointly and severally promised to pay it with interest at the rate of five and one-half per cent per annum, guaranteed the validity and sufficiency of the assignments of the insurance policies and covenanted that they would warrant and defend the title of the Occidental Petroleum Corporation as assignee thereof and to all proceeds and benefits therefrom. Leonard and Leal Garbett promised to pay all of the premiums on the policies and to keep them in full force and effect for the benefit of the Occidental Petroleum Corporation. They failed to do this after 1931, and, to keep the policies in effect, the Occidental Petroleum Corporation paid all premiums on the policies after that date, together with interest on the indebtedness of Garbett secured by the policies. This was done with the knowledge of Leal Garbett and without any reimbursement by her. She made no claim of any kind to any interest in the policies after May 2, 1930, and gave no notice of her repudiation of her assignment thereof until about May 18, 1937, after the death of her husband.