West Coast Life Insurance v. Crawford

The plaintiff in these three consolidated cases appeals from a judgment providing not only that it take nothing by virtue of its endeavor to rescind five life and accident insurance policies, but that, in its role as cross-defendant, it should pay the sums set forth in the policies it had sought to have cancelled. We have reached the conclusion that the judgment should be reversed because of the rejection of an exhibit important to the proof of plaintiff’s cases and to its defense against the cross-actions brought upon the policies.

In each of the three consolidated actions resulting in the judgment appealed from it was alleged and found to be true that Laurel Harvey Crawford had applied for, and the plaintiff had issued, life insurance policies on Crawford’s three minor children, and accidental death policies on the two of the three who were old enough to be the subjects of such policies. In each of these policies Crawford was named as beneficiary. Some seven months after receiving the last of these policies Crawford murdered his three children. Plaintiff’s position was that there had been on Crawford’s part a fraudulent concealment of a material fact, that fact being Crawford’s intention, in existence at least by the time the policies were issued, himself to take the lives of his children. The trial court found that no such intention existed, and as a necessary consequence decreed that the plaintiff take nothing. No one is questioning plaintiff’s position that if Crawford had the intention to murder his children, his concealment of that intention, up to the time that the policies were issued, was fraud warranting a rescission of the policies. (Pierre v. Metropolitan Life Insurance Co., (1937) 22 Cal.App.2d 346 , 350 [ 70 P.2d 985 , 987].)

In each of the policies Crawford was named as beneficiary, his wife to be the beneficiary if he should fail or not survive. Crawford forfeited all his rights as a beneficiary when he murdered the insured, so that neither he nor the defendants who claim through him have any right to the proceeds of the policies. (Meyer v. Johnson, (1931) 115 Cal.App. 646 , 647

Plaintiff’s attack upon that part of the judgment decreeing that it take nothing is made, not upon the ground that the evidence received does not support the finding upon which the judgment was based, but upon the ground that the trial court erred in refusing to admit in evidence, and then in rejecting an offer of proof respecting, a piece of paper which would have supported a finding in plaintiff’s favor. We shall call this piece of paper exhibit 7 although it was not received in evidence but only so marked for identification.

Looked at in the light of the evidence which was before the court when exhibit 7 was rejected, this exhibit might have been seen to cast a most sinister shadow across all five of the policies issued to Crawford on the lives .of his children. In making this statement we are not substituting our viewpoint of the facts and the inferences which should be drawn therefrom for that of the trial judge. It is true that “whether [an] inference shall be drawn, in any given case, is a question of fact”; but it is also true that “Whether a particular inference can be drawn from certain evidence is a question of law, ’ ’ both quotations being taken from Blank v. Coffin, (1942) 20 Cal.2d 457 , 461 [ 126 P.2d 868 , 870], All that we are stating is that as a matter of law inferences favorable to the plaintiff could have been drawn from exhibit 7 had it been received in evidence. The possibility that the trial judge would not have drawn such inferences does not retrieve from error the ruling rejecting the exhibit (Mashbir v. Mashbir, (1938) 29 Cal.App.2d 733 [ 85 P.2d 482 ].) Obviously, a re

To one not familiar with the admissions of the pleadings and with the evidence which had been received, this exhibit would have little meaning.

Exhibit 7.

What of the other figures in the two columns ? By a strange coincidence these too are the same as the amounts of insurance for which he had made application. A Mr. Primeaux had testified that in response to Crawford’s written request to the plaintiff he, the agency manager of plaintiff’s Pasadena branch office, had called upon Crawford early in September, 1938. Crawford had been shopping around for the lowest rates, he told Primeaux, and found plaintiff’s to be the best. Four applications for insurance were signed by Crawford on September 14. One was for a life policy on his seven-year-old daughter Helen. (This policy, in the amount of $3,500 is the policy involved in the action with the superior court number 456,584.) The second application resulted in the issuance of a life policy in the sum of $4,000 upon nine year old

What other conclusion does common sense permit than this ? Crawford, having obtained some insurance, having applied for more, and planning to apply for still another policy, all of which would become payable to him should an automobile accident snuff out the lives of his wife and three children, employed exhibit 7 to figure out what sum the several policies would bring him, and the answer was $45,500. If it be said that other conclusions are possible, it remains true that the conclusion we have expressed is certainly one that could logically have been made.

We find other computations on the exhibit. Under the words “cash refund annuities per 1000—45.93 for life,” written by Crawford, we find the figure “40,000” encircled, and then the figures “45.93” multiplied by 40. The ‘ ‘45.93 ’ ’ must have rung a bell in the trial court’s memory. This was the figure given to Crawford by Primeaux, in response to the latter’s request for information concerning what he would receive as an annuity each year for life for each $1,000 he paid the plaintiff. If he took $40,000 of the $45,500 insurance he would collect if all his dear ones should die in an automobile accident and invested it in annuity contracts, what would his yearly take be? $1,837.20, according to the calculations Crawford made on exhibit 7. How much would this amount to each month? Divide $1,837.20 by 12, as Crawford did, and you have the answer: $153.10.

The picture is not complete without some other bits of evidence. Crawford, at the time Primeaux first called on him, casually said “he had some funds that probably he would invest into an annuity later on.” The business at hand, on that occasion, however, had to do with a discussion of rates, leading to the making of the applications for the policies on his wife and three children, on September 14, 1938. Ten days or two weeks later Crawford came to Primeaux’s office and inquired about single premium annuities. It was at this interview that he obtained the figure “45.93” which he used in his computations, on exhibit 7, and at this • interview “he mentioned . . . that he possibly might come into a large sum of money and might invest into this annuity.” The fact was, according to Crawford’s testimony at the murder trial, that he had no $40,000 to invest in annuities, but that he did figure the possible returns on this basis.

All the policies applied for on September 14 were issued on October 11, except that the policy of $8,000-$16,000 covering his wife’s life was issued for $8,000 only; it did not double in case of accidental death. Crawford did not like the rejection of his application for double indemnity on his wife, according to Primeaux, and on November 22, 1938, requested the company to cancel the policy, which was done. It was before November 22 that he did the figuring on exhibit 7, according to his reported testimony (an earlier date was of no importance at the murder trial). On the exhibit, however, the figures “8-16” top the list, and without the “16” the total would fall below $40,000. The conclusion would be

It is true, there is other evidence, which we have not reviewed, which might cast doubt upon some of that which we have mentioned, and there are some figures on the exhibit that remain unexplained and some which may have been added even after November 22. But, we reiterate, our thesis has not been that if exhibit 7 had been introduced the finding would have been required that Crawford had defrauded the plaintiff. We do insist, however, that a person of ordinary common sense, with the exhibit and the evidence before him, could with reason say: It appears clear to me that before Crawford received the policies on the lives of his children, months before applying for and receiving the additional dismemberment policy on his son Paul, he intended to cash in on those policies by doing that which he ultimately accomplished ; that is, he intended himself to cause their deaths.

Occasionally a conflict appears to exist between a rule of law and the dictates of common sense. Such conflicts are at times inescapable, but more often justify a careful reexamination of the rule of law; it may be either unsound or other than it seems to be. We have discussed somewhat fully the matters involved in and surrounding the rejected exhibit because of the possibility that in them is enmeshed such a conflict, a conflict between the rule governing in everyday affairs and that which is sometimes offered as a rule of evidence, the rule that “an inference may not be based upon an inference.” We have reached the conclusion that there is no such rule in this state save where the second inference does not follow logically from the fact established by the first inference.

An interpretation of the rule that would result in its forbidding the use of exhibit 7 in a chain of reasoning, would make it conflict with the rule of daily experience. Let us suppose a man is found dead, with a cut in his heart an inch wide. At his side is a bloody knife with a blade an inch wide, and a blood stained handle bearing fingerprints. An

In only two cases in this state, so far as we are aware, has there been any discussion of the so-called rule. The first of these is the case of People v. Graves, (1934) 137 Cal.App. 1 [ 29 P.2d 807 , 813, 30 P.2d 508 ], where the conviction of the defendant on a charge of bribery was upheld, although the evidence was entirely circumstantial. The court said (p. 14): “Courts have sometimes used the expression that an inference cannot be based upon an inference and appellant has sought to apply this principle as a reason for rejecting the

The second case in California, coming to our attention, which discusses the epigram that one inference may not be based on another is Paiva v. California Door Co., (1925) 75 Cal.App. 323 , 330 [ 242 P. 887 ]. This quotation sets forth the problem before the court, and the court’s comments upon it: “From the extent to which this stump had been burned it is evident that it must have commenced to burn at a time prior to September 18th. Since no fires were kindled on defendant’s premises on the 17th, it logically follows that it must have been burning on the morning of that day and prior thereto. Taking it, then, as a justifiable inference that the stump was burning on Monday morning and giving consideration to the further proved fact that a strong wind was blowing past the stump in the general direction of the place where the fire started, it would not be unreasonable, in the absence of other explanation, to infer that the fire was caused by sparks from the burning stump. [Citing eases.]

“Respondent contends that the foregoing reasoning is faulty in that ‘an inference cannot be based on another inference.’ The second inference is not based upon the first inference alone, but upon the inferred fact that the stump was burning and the further fact, proved by direct evidence, that a strong wind was blowing from the stump toward the origin of the fire. The statement that an inference cannot be based upon another inference appears itself to be based upon an unsub

Hearings in the Graves case and in the Paiva case were denied by the Supreme Court, and in no subsequent case has an expression of doubt about the soundness of the conclusion there reached been voiced. We do have, however, some eases in this state where the rule there criticized is apparently used as the yardstick by which a chain of reasoning is measured and found wanting. We do not consider ourselves bound by the reference to the “rule” in these cases, however, because in none of them was there a sound chain of reasoning. For example, in the only Supreme Court case which mentions the rule, Hamilton v. Pacific Elec. Ry. Co., (1939) 12 Cal.2d 598 , 601 [ 86 P.2d 829 ], it appears in this setting: “Indeed, considering the fact that at 8:30 o ’clock p. m., many persons were making use of the waiting room, it is not improbable that during the time that plaintiff was an occupant thereof, several persons either did enter or leave it,—in which event it would haye been possible that at any given moment of such time any one of them might have caused the oil to be depos

We conclude, therefore, that upon the entire evidence the finding would have been justified, had exhibit 7 been before the trial court, that Crawford entertained the intention of killing his children, before the policies were issued, for our decisions illustrate rather than deny the soundness of basing an inference on a fact established by a reasonable inference. Nevertheless it is possible that on a retrial the finding will be made that he did not at that time have such an intention. Respondent, relying upon a statement in Estate of Moore, (1923) 65 Cal.App. 29 , 33 [ 223 P. 73 ], argues that if conflicting inferences may be drawn from the evidence, “then there is nothing for the jury, or the trial court sitting without a jury, but mere guesses or conjectures.” This, of course, is not the law. {Medico-Dental etc. Co. v.

The possibility of a finding adverse to plaintiff, on a new trial, warrants us in considering some further points presented upon this appeal. Part of the evidence touching upon exhibit 7, and furnishing the basis for our recital of the facts, was incompetent, and had a proper and timely objection been made it would doubtless have been excluded. We have in mind the testimony by Deputy District Attorney Barnes as to what Crawford said had been done by him. This was, of course, direct evidence that Crawford had so stated, but of the facts which were contained in Crawford’s statements the testimony was hearsay. Insofar as it constituted admissions against Crawford’s interest it was admissible, as we are about to see, against Crawford and the defendants who claimed by assignment from him, but not against the administrator. However, no objection was made, and it is established that evidence, though incompetent, received without objection is sufficient to support a finding. (Powers v. Board of Public Works, (1932) 216 Cal. 546 , 552 [ 15 P.2d 156 ], Nelson v. Fernando Nelson & Sons, (1936) 5 Cal.2d 511 , 518 [ 55 P.2d 859 ]) so we did not hesitate to use it in our recital of the facts. An offer of proof was made, after exhibit 7 was rejected, consisting in large measure of further statements made by Crawford when a witness. To this offer, however, objection was made and sustained. As to Crawford himself and the defendants claiming under him, his statements as a witness in the criminal trial might well have been received as admissions against his interest (sees. 1853, 1870, subd. 2, Code Civ. Proc.; Griffin v. Jacobsen, (1936) 17 Cal.App.2d 68 , 70 [ 61 P.2d 350 , 351]) but of the effect of the ruling in this regard plaintiff has voiced no complaint, doubtless because it recognizes that in reality it is not hurt by it. Crawford’s statements, however, were inadmissible against the respondent. (Griffin v. Jacobsen, supra.) “The rights of a party cannot be prejudiced by the declaration, act, or omission of another, except by virtue of a particular relation between them ...” (See. 1848, Code Civ. Proc.) No “particular relation” existed between Crawford and the respondent administrator at the time Crawford made the statements that plaintiff offered to prove. Any interest the administrator has in the proceeds of the life or accident

The plaintiff also complains of an adverse ruling on its offer of a letter written by Crawford to it, under date of November 30, 1938, containing this statement: “Mr. Primeaux will tell you that at the time I applied for these policies I also talked with him about putting $40,000.00 into one of your life Annuity policies.” This letter would have warranted the drawing of an inference, against Crawford and his assignees only, that at the time he applied for the policies he talked about the annuity, but it is not competent evidence of anything against the respondent administrator, who objected to its introduction. Nor was it error to refuse to admit in evidence a $2,000 to $4,000 policy which Mr. Primeaux testified had been issued upon the life of Crawford’s wife in the fall of 1939.

. The plaintiff, now to be referred to as the cross-defendant, makes the contention, applicable alike to the life and the accidental death policies, that “There is no evidence in the case that there is anybody entitled to take the benefits of the policies involved except the murderer beneficiary who is barred from taking,” citing these eases: McDonald v. Mutual Life Ins. Co., supra, 178 Iowa 863 [ 160 N.W. 289 ]; Johnston v. Metropolitan Life Ins. Co., (1919) 85 W.Va. 70

By way of defenses to the cross-actions on the two accident policies the cross-defendant alleged that the provisions of the policies, that affirmative proofs of loss had to be furnished within ninety days after the date of loss, were not complied with. The trial court found these allegations to be not true. This finding is not only not supported by but it is contrary to the evidence; the date of loss was December 11,

The judgments appealed from are reversed.

Shinn, Acting P. J., and Wood (Parker), J., concurred.

A petition for a rehearing was denied June 22, 1943, and the following opinion was thereupon rendered:

At one point in our opinion we made the statement that “it is established that evidence, though incompetent, received without objection is sufficient to support a finding,” having already noted that to the admission of the evidence which we were discussing, no objection had been made. • In his petition for a rehearing respondent represents that he in fact did make objections but that they were omitted from the bill of exceptions, although he sought to have them included. If it would avail respondent aught we would grant a rehearing in order that such steps as might be found proper be taken to supplement the record now before us so that the objections he made during the trial would be included. However, the correction of the record requested would not be of benefit to the respondent, for “Where, as here, the insufficiency of the evidence is the question to be determined, full weight must be given to evidence which would have been excluded had objection been made, and even to evidence erroneously admitted against objection provided it be relevant. Evidence may tend to prove the issues and yet be incompetent.” (Holzer v. Read, (1932) 216 Cal. 119 , 123 [ 13 P.2d 697 ]. To the same effect: Wright v. Roseberry, (1889) 81 Cal. 87 , 91 [ 22 P. 336 ] ; Archibald Estate v. Matteson, (1907) 5 Cal.App. 441 , 446 [ 90 P. 723 ]; Globe Grain & Milling Co. v. Drenth, (1919) 41 Cal.App. 604 , 606 [ 183 P. 285 ]; Hanrahan-Wilcox Corp. v. Jenison Machinery Co., (1937) 23 Cal.App.2d 642 , 644 [ 73 P.2d 1241 ].) See, also,

In his petition for a rehearing respondent agrees with us that an inference may be based on an inference, but argues that this is only so when the inference is the only one that can logically be drawn, quoting in support of his argument these words (and others) from Estate of Wallace, (1923) 64 Cal.App. 107 , 110, 111 [ 220 P. 682 ] : “An inference cannot be said to be established by circumstantial evidence, either in a civil or a criminal case, unless the circumstances relied upon are of such a nature and so related to each other that it is the only inference which can fairly or reasonably be drawn from them. If other inferences may reasonably be drawn from the facts in evidence, the evidence does not support the inference sought to be deduced from it.” The Supreme Court denied a hearing in the Wallace case, but in doing so disapproved of the statement we have quoted, a fact to which attention was called in Robertson v. Weingart, (1928) 91 Cal.App. 715 , 723 [ 267 P. 741 ], in Strock v. Pick wick Stages System, (1930) 107 Cal.App. 298 , 301 [ 290 P. 482 ], and in Lejeune v. General Petroleum Corp., (1932) 128 Cal.App. 404 , 416 [ 18 P.2d 429 ]. From Katenkamp v. Union Realty Co., (1940) 36 Cal.App.2d 602 , 617 [ 98 P.2d 239 ] we quote these words (the emphasis is the court’s): “It is not necessary, in order to establish a theory by circumstantial evidence, that the facts be such and so related to each other that such theory is the only conclusion that can fairly or reasonably be drawn therefrom. ...” Among the authorities cited is “opinion of Supreme Court denying a hearing in Estate of Wallace. . . .”

The petition to augment the record on appeal is denied; the petition for a rehearing is denied.

Respondent’s petition for a hearing by the Supreme Court was denied July 22, 1943. Shenk, J., and Curtis, J.,, voted for a hearing.