Atkinson v. Reynolds (In re Reynolds' Estate), 29507.
| Decision Date | 24 July 1936 |
| Docket Number | No. 29507.,29507. |
| Parties | IN RE REYNOLDS' ESTATE. ATKINSON ET AL. v. REYNOLDS ET AL. |
| Court | Nebraska Supreme Court |
IN RE REYNOLDS' ESTATE.
ATKINSON ET AL.
v.
REYNOLDS ET AL.
No. 29507.
Supreme Court of Nebraska.
July 24, 1936.
[268 N.W. 481]
1. A declaratory judgment duly entered under the provisions of sections 20-21,140 to 20-21,155, Comp.St.1929, confirming in all respects the validity of a trust agreement, and in particular directing the trustee therein designated to pay the said trust funds, together with interest thereon, to the parties entitled thereto, as set forth therein, is final, controlling, and binding upon the parties to that proceeding, their privies and their successors in interest, and precludes such parties from further litigating the points and questions put in issue and there decided.
2. A right of action for a tort affecting the property of a bankrupt passes to the trustee in bankruptcy.
3. “The proceeds of a life insurance policy in which a third person is named beneficiary belong exclusively to such beneficiary as an individual; they are not the property of the heirs of insured, are not subject to administration, and cannot properly be claimed or received by the administrator or other legal representative of insured as assets of his estate.” 37 C.J. 566.
4. The proceeds of a policy, by its terms payable to a creditor, inure to him, at least to the extent of his debt, free from the claims of other creditors or the representatives of the insured's estate. Such creditor takes the insurance money, if at all, directly by the terms of the contract, and not derivatively, or in the capacity of heir or legal representative of the insured. It forms no part of the insured's estate and is not subject to the jurisdiction of the probate court administering the same.
5. It is not required that the beneficiary of a life policy be designated by name, other proper description suffices. Trustees may be designated in the policy to hold for beneficiaries ultimately intended to receive the proceeds thereof.
6. “An ‘insurance trust’ is an agreement between a person whose life is insured and a trustee, usually a trust company, whereby the insurance money, the cash proceeds of the policy, is paid directly to the trustee for its investment and distribution to designated beneficiaries in any such manner, or at any such time or times, as the insured has directed in his trust agreement with the trustee.” 2 Couch, Cyclopedia of Insurance Law, 1048, § 355.
7. The trust agreement in suit, held to create an “insurance trust.”
8. The beneficiaries of this insurance trust, identified in the third clause of the contract, are creditors of the insured whose claims are within the limitations there prescribed and expressed.
9. “No one except a beneficiary or one suing on his behalf can maintain a suit against the trustee to enforce the trust or to enjoin or obtain redress for a breach of trust.” Restatement, Trusts, § 200.
10. The duty of the trustee of an insurance trust is to take and keep exclusive control of the trust funds, and perform the duties enjoined, without delegating to others the doing of acts which the trustee can reasonably be required to perform personally.
11. “In executing the trust, the trustee must pay over the trust estate or proceeds thereof to the person or persons entitled thereto, directly or through his or their representatives, and his liability to the beneficiaries is not discharged by payment to a person not entitled thereto, even though he acts under advice of counsel, unless the beneficiary elects to proceed against the payee.” 65 C.J. 838.
12. The legal remedies for breach of the terms of this insurance trust are confined to the beneficiaries thereof, named and identified therein, and do not include the representatives of the estate of C. E. Reynolds.
13. Under the facts in this record, the executors and representatives of the estate of C. E. Reynolds were never entitled to claim, demand or receive any part of the trust funds from the insurance trust, the same were not assets which they were required to inventory and administer, and the law enjoined upon them no duties with reference thereto.
Appeal from District Court, Lancaster County; Shepherd, Judge.
Proceeding in the matter of the estate of C. E. Reynolds, deceased, wherein H. B. Reynolds, as sole surviving executor of the last will and testament of C. E. Reynolds, deceased, filed a final report, to which objections were filed by Ann M. Reynolds, as widow, devisee, and legatee, which were duly adopted by Ira E. Atkinson, as administrator de bonis non of the estate of C. E. Reynolds, deceased, and Francis V. Robinson, administrator of the estate of E. C. Wilson, deceased, who was coexecutor of the last will of C. E. Reynolds, deceased, filed a final report which was objected to by Ann M. Reynolds and H. B. Muffly, as trustee in bankruptcy of the Federal Trust Company. From a judgment of the county court in favor of the objectants, H. B. Reynolds, surviving executor of the last will and testament of C. E. Reynolds, deceased, and Francis V. Robinson, administrator of the estate of E. C. Wilson, deceased, appealed to the district court, and, from a judgment of the district court for the objectants, H. B. Reynolds, executor of the last will and testament of C. E. Reynolds, deceased, and Francis V. Robinson, administrator of the estate of E. C. Wilson, deceased, appeal.
Reversed and remanded, with directions.
[268 N.W. 482]
George R. Mann, Dwight W. Dahlman, and George I. Craven, all of Lincoln, for appellants.
John J. Ledwith and B. S. Gradwohl, both of Lincoln, for appellees.
Heard before GOSS, C. J., and ROSE, GOOD, EBERLY, DAY, PAINE, and CARTER, JJ.
EBERLY, Justice.
This is an appeal from a judgment or decree rendered by the district court for Lancaster county on December 1, 1934, in a case entitled, “In the Matter of the Estate of C. E. Reynolds, Deceased,” then and there pending on appeal from the county court of Lancaster county, Nebraska, and also from the order of that court overruling the motion for a new trial addressed to the aforesaid judgment.
H. B. Reynolds (formerly executor of the last will of C. E. Reynolds, deceased), and Francis V. Robinson, as administrator of the estate of E. C. Wilson, deceased (said Wilson also having been a coexecutor of the last will of C. E. Reynolds, deceased), are the appellants.
The judgment appealed from, in addition to a general finding against the appellants, contained as a specific finding, “that the former executors of this estate, H. B. Reynolds and E. C. Wilson, have failed to account for, and should be required to account for, property and estate of $10,446.” The judgment entered thereon recited that appellants “and each of them, be and they hereby are ordered and required to deliver and pay to Ira E. Atkinson, administrator de bonis non herein, unadministered property and estate of $10,446, with interest thereon at 6 per cent. per annum from this date, * * * that the foregoing is additional to those assets shown in the final account filed by H. B. Reynolds, all of which the said H. B. Reynolds is specifically ordered and directed to turn over and deliver to the said administrator de bonis non.”
The record discloses that H. B. Reynolds, as sole surviving executor of the last will and testament of C. E. Reynolds, deceased, filed his final report as such, in the county court of Lancaster county, Nebraska, on January 18, 1934. Objections were filed thereto by Ann M. Reynolds, as widow, devisee and legatee, which were duly adopted by Ira E. Atkinson, as administrator de bonis non of said estate. Francis V. Robinson, administrator of the estate of E. C. Wilson, deceased, in behalf of his decedent (who was in his life time coexecutor of the last will of C. E. Reynolds, deceased), filed, in behalf of the estate represented by him, a final report which was also challenged by Ann M. Reynolds. There were also objections filed to said final reports by H. B. Muffly as trustee in bankruptcy of the Federal Trust Company. A hearing was had which resulted in a finding and judgment by the county court of Lancaster county against H. B. Reynolds and the estate of E. C. Wilson, deceased, and ordering and requiring each of them to deliver and pay to Ira E. Atkinson, administrator de bonis non, unadministered property and estate of $10,000 together with interest thereon. An appeal from this judgment to the district court for Lancaster county, Nebraska, resulted as hereinbefore stated.
A careful consideration of the pleadings and evidence discloses that the proceedings were prosecuted by the objectors exclusively on the theory that the proceeds of a certain life insurance policy on the life of C. E. Reynolds, or at least sufficient part thereof to pay the claims allowed against his estate, constituted assets of the estate of C. E. Reynolds, which it was the duty of his executors, as such, to...
To continue reading
Request your trial