125 Ind. 575 | Ind. | 1890
— William D. Alexander, in his lifetime, in 1886, procured from the Mutual Life Insurance Company, of New York, a policy of insurance upon his own life for the sum of five thousand dollars, payable at his death to his executors, administrators or assigns. On the 8th day of April, 1887, said Alexander being indebted to Welburn, Rause,
The appellees, the widow and children of said William D. Alexander, and being his sole heirs, file their petition in this case, in the Posey Circuit Court, alleging the facts and asking an order upon the administrator to pay to them the said sum of $1,115.10 in his hands so received on said policy; also alleging that appellant, Johnson, claimed to have a lien upon said money by virtue of an execution issued from the circuit court of Posey county for $2,500 in his favor.
Appellant demurred to the complaint, which was overruled and exceptions reserved. Appellant, Johnson, also-
The administrator does not appeal, but Johnson alone appeals and assigns as error the overruling of his demurrer to the complaint, and the sustaining of a demurrer to his first and third paragraphs of answer.
It is contended on the part of the appellant that there was not such a disposition of the policy as to give to the widow and children, who are the heirs of the deceased, the right to the excess above paying the amount due the assignees; that it was in the nature of a gift to the heirs, and by the terms of the agreement Alexander retained the right to make some other disposition of the surplus and order it paid to other persons, hence the donor did not release all control over the fund, and it did not constitute such a delivery as to make a valid gift; also that the policy having been made payable to the personal representatives of the deceased, Alexander being insolvent, a gift of any portion of it to his heirs is in fraud of his creditors, and, therefore, void. It is upon this theory that it is contended that the court erred in its rplings.
The law favors the making of a reasonable provision by a man for his family, and those who are dependent upon him, and it is not a violation of the statute, and in fraud of creditors for a debtor, though insolvent, to contribute and pay a reasonable amount for insurance for the benefit of his family. In Pence v. Makepeace, 65 Ind. 345, it is held that only on the clearest proof of fraud, if at all, can the premiums paid by an insolvent debtor on a policy of insurance upon his life, for the benefit of his wife and children, be recovered by his creditors, and in no event can any excess over the amount of the premium so paid be recovered.
In Central Bank, etc., v. Hume, 128 U. S. 195, it is held that a man may rightfully devote a moderate portion of his earnings to insure his life, and thus make reasonable provision for his family; and, though he be insolvent, such payment
In McCutcheon’s Appeal, 99 Pa. St. 133, it is held that where a person takes out a policy of insurance upon his own life, in his own name, and subsequently assigns the same to his wife, child, or other dependent relative, the mere fact that the assignor in such case is insolvent at the time of making the assignment does not warrant the inference that the • assignment was in fraud of creditors.
In 2 Bigelow Fraud, p. 129, it is said : “ A debtor though insolvent may use his earnings to pay for insurance on his life, in favor of his family.”
The authorities recognize a distinction between policies when in the name of the debtor, and afterwards when they have become valuable choses in action, assigned, and those taken originally in the name of the wife, child, or other dependent, but hold that in either case the assignment is valid if made in good faith.
In this case it is not shown what amount of premiums was paid by Alexander before the transfer; at most it was not kept up by him but a few months, after that the premiums were paid by the assignees. The unsecured creditors were injiired by the transfer only to the extent of the amount paid by him in premiums, or, at least, not to exceed the value of the policy at the time of the transfer, and what such value was is not shown. The deceased took out the policy and held it but a short time until he transferred it to secure certain creditors whose claims then amounted to near thirty-four hundred dollars, and took an agreement from them by which they were to pay the premiums from that time forward, and from the proceeds, when paid, retain the amounts due them, including principal and interest of their claims and all premiums paid and expense incurred on account of the policy, and pay any surplus over to his heirs. Had the insured lived but a few years there would have been no surplus to be accounted for. It was no doubt by reason
In our opinion the transfer was not in fraud of creditors, and was valid, and transferred the surplus to his heirs.
As to the point made that it was an incomplete transfer, we do not think it is well taken; The policy was assigned by an indorsement in writing, and delivered. The agreement provided, in effect, that any surplus remaining should be paid to his heirs, unless he made some further order in regard to it; he died, making no further order, and the legal liability of the assignees was to pay the surplus to his heirs. Upon this question the case of Supreme Lodge, etc., v. Schmidt, 98 Ind. 374, is in point. In that case it was held that when one takes a life policy on his own life in a mutual
Some question is made as to the complaint, on the ground that the agreement taken by Alexander from the assignees is not properly an exhibit to the complaint; that it is not the basis of the action, but that the proper form of action is upon a common count for money had and received.
We can not agree with this theory. The action is properly an application to the court for an order requiring the administrator to turn over to the appellees the money received on the policy, and the agreement is the basis of the appellee’s right to have such order made.
There is no error in the record.
Judgment affirmed, with costs.