200 A. 55 | Pa. | 1938
Michael Gibbons left his residuary estate in trust to pay the income to his wife for life, and after her death *38
to his five children and the issue of deceased children, share and share alike, the issue taking their parent's share by representation. If any child died without leaving issue, his or her share of the income was to be divided equally among the other children. It was held by this court (Gibbons v. Connor,
Michael Gibbons died in 1896, and his wife in 1903. In 1911 one of his children, Charles J. Gibbons, who was then receiving one-fourth of the income1 but was indebted on judgments in an amount exceeding $50,000, executed an assignment of all his right, title and interest in and to the estate of his father2 to Real Estate Title Insurance and Trust Company of Philadelphia (now merged in Land Title Bank and Trust Company), as trustee for the benefit of certain certificate holders who contributed $30,000 in the transaction. Of this sum approximately $23,000 was used to purchase the judgments against Charles J. Gibbons, which were thereupon restricted of record to his interest in the estate, and the balance was paid to him. At the same time he assigned to the Trust Company insurance policies which he took out upon his life in the sum of $30,000, the premiums, as they became due, to be paid by the trustee out of the income received from the estate. That income amounted to about $2,500 per annum.
Charles J. Gibbons died in 1916, without issue, and the trustee collected the amounts due on the policies and distributed the proceeds among the certificate holders. Of course, no further income was thereafter received by the trustee. Catherine Gibbons, the last surviving child, died in 1933, and the trust under the will then terminated. *39
In Gibbons' Estate,
Several questions present themselves for consideration. Did the Trust Company, as trustee, acquire an insurable interest in the life of Charles J. Gibbons by virtue of the assignment of his interest in his father's estate, and, if so, in what amount would the law permit an assignment of insurance for the purpose of protecting such interest? Did the trustee, by reason of its purchase of the judgments against Charles J. Gibbons, and notwithstanding its subsequent restriction of them to his interest in the estate, obtain, as a creditor, an insurable interest in his life? If the assignment of the insurance policies were to be held illegal, would the assignment of the interest in the estate nevertheless remain unimpaired, and would that interest be recoverable in the present proceedings without diminution? Would the statute of limitations defeat appellant's claim, *40 twenty-one years having elapsed since the Trust Company received the insurance money? Is any right she otherwise might possess destroyed because of the fact that the proceeds of the policies were actually distributed by the Trust Company among the certificate holders? An affirmative answer to any of these questions would prevent a reversal of the decree of the court below, and in view of the conclusion we have reached in regard to the first of them it will be unnecessary to consider the others.
On May 17, 1921, the legislature passed the Insurance Company Law, P. L. 682, section 412 of which forbids any person from causing to be insured the life of another, unless the beneficiary named in the policy has an insurable interest in the life of the insured, and the term "insurable interest" is defined as meaning, "in the case of persons related by blood or law, an interest engendered by love and affection, and, in the case of other persons, a lawful economic interest in having the life of the insured continue, as distinguished from an interest which would arise only by the death of the insured." The transaction here in controversy occurred before the passage of that statute, but the definition quoted is but a broader expression of what in effect had been declared by the Pennsylvania cases: United Security Life Insurance Trust Co.v. Perugini Union Mutual Relief Association (No. 1),
The trustee for the certificate holders had a reasonable expectation of advantage or benefit from the continuance of the life of Charles J. Gibbons. In Taussig v. United Security LifeInsurance Trust Co.,
Decree affirmed; costs to be equally divided between the parties.