Before MAJOR, LINDLEY and SWAIM, Circuit Judges.
The plaintiff, Robert Wilhoit, instituted this action against the defendants, Peoples Life Insurance Company (sometimes referred to as the company) and Thomas J. Owens, for the recovery of money held by the company. Roley Oscar Wilhoit was the insured and Sarah Louise Wilhoit, his wife, the beneficiary in a life insurance policy in the amount of $5,000, issued by Century Life Insurance Company and later reinsured in Peoples Life Insurance Company of Frankfort, Indiana. Mr. Wilhoit died prior to October 22, 1930 (the exact date not disclosed by the record), without having changed the beneficiary designated in the policy, and the proceeds thereof became due and payable to Mrs. Wilhoit. The amount due was paid to her and the policy surrendered, as is evidenced by the following receipt appearing on the back of the policy:
Received from Century Life Insurance Company Forty Seven hundred forty nine Dollars in full for all claims under the within policy, terminated by death of Roley O. Wilhoit.
The main body of the policy contained a provision entitled "The Investment," as follows:
"Upon the maturity of this policy, the amount payable hereunder, or any portion thereof, not less than One Thousand Dollars, may be left on deposit with the Company, and the Company will pay interest annually in advance upon the amount so left on deposit at such rate as the Company may declare on such funds so held by it, but never at a rate less than three per cent, so long as the amount shall remain on deposit with the Company. The said deposit may be withdrawn at the end of any interest year; or upon the death of the payee the amount of said deposit will be paid to the executors, administrators or assigns of said payee."
On November 14, 1930, Mrs. Wilhoit (twenty-three days after she had acknowledged receipt of the amount due her under the policy) from her home in Indiana signed and addressed a letter to the company in the same State, which in material parts reads as follows:
"i hereby acknowledge receipt of settlement in full under Policy No. C172 terminated by the death of Roley O. Wilhoit, the Insured, and I direct that the proceeds of $4,749.00 be held in trust by the Peoples Life Insurance Company under the following conditions:
"(1) Said amount or any part thereof (not less than $100.00) to be subject to withdrawal on demand of the undersigned.
"(2) While on deposit, said amount or part thereof shall earn interest at the rate of 3 1/2%, compounded annually, plus any excess interest authorized by the Board of Directors of the Company. Interest may be withdrawn at the end of each six months period or whenever the principal of the fund is withdrawn or may be allowed to accumulate ...