Chapman v. Scott, No. 17538

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtLEGGE; STUKES
Citation234 S.C. 469,109 S.E.2d 1
Docket NumberNo. 17538
Decision Date01 June 1959
PartiesMrs. Lavinia B. CHAPMAN, Appellant, v. Andrew SCOTT, Executor of the Last Will and Testament of James W. Scott, deceased, Sallie Scott, James W. Scott, Jr., Ruby Ann Scott, Walter Lee Scott and Roy Louis Scott, Respondents.

Page 1

109 S.E.2d 1
234 S.C. 469
Mrs. Lavinia B. CHAPMAN, Appellant,
v.
Andrew SCOTT, Executor of the Last Will and Testament of
James W. Scott, deceased, Sallie Scott, James W.
Scott, Jr., Ruby Ann Scott, Walter Lee
Scott and Roy Louis Scott, Respondents.
No. 17538.
Supreme Court of South Carolina.
June 1, 1959.

Page 2

[234 S.C. 470] Leatherwood, Walker, Todd & Mann, W. E. Bowen, Greenville, for appellant.

Love, Thornton & Arnold, Greenville, for respondents.

[234 S.C. 471] LEGGE, Justice.

James W. Scott died on January 30, 1957, owning a tract of some 17 acres in Greenville County. On February 19, 1957, appellant brought this action to foreclose Scott's mortgage of said premises dated April 26, 1948, securing his note to her of that date in the principal sum of $4,250. After Scott's death appellant, who had been named as beneficiary in three policies of insurance on his life, and who had possession of them, collected their proceeds, amounting to $2,293.29. The only issue before us concerns the executor's claim (disallowed by the Master, but allowed by the Circuit Judge) that Scott's estate is entitled to credit for this amount against his indebtedness to appellant.

In the absence of statutory prohibition, one may in good faith insure his own life for the benefit of anyone, regardless of whether the latter has an insurable interest in his life. 29 Am.Jur., Insurance, Paragraph 355; 44 C.J.S. Insurance § 202. This principle is equally applicable to an assignment or change of beneficiary effected by the insured. 29 Am.Jur., Insurance, Paragraph 357; 44 C.J.S. Insurance § 202. Though not necessary to their decision, it has been affirmed by this court in numerous cases. Crosswell v. Connecticut Indemnity Ass'n, 51 S.C. 103, 28 S.E. 200; Robers v. Atlantic Life Insurance Co., 135 S.C. 89, 133 S.E. 215, 45 A.L.R. 1172; Roberts v. National Benefit Life Insurance Co., 150 S.C. 326, 148 S.E. 179; Henderson v. Life Insurance Co. of Virginia, 176 S.C. 100, [234 S.C. 472] 179 S.E. 680; Warren v. Pilgrim Health & Life Insurance Co., 217 S.C. 453, 60 S.E.2d 891.

Where a creditor has been named as beneficiary of a policy of insurance on his debtor's life, his rights in its proceeds depend largely upon the intention of the parties to the insurance contract, and particularly upon that of the insured. Ordinarily he is entitled only to reimbursement for the debt due him, together with such sums as he may have paid to keep the policy in force. 29 Am.Jur., Insurance, Paragraph 1289; 46 C.J.S. Insurance § 1162. But the fact that he is a creditor is not in itself conclusive of that issue, because, as before stated, the insured may, if so minded, make his creditor the absolute beneficiary though the amount of the policy far exceed the amount of the debt.

Because the intention of the parties, which is the key to the problem, must often be gleaned from the circumstances of the particular transaction, the numerous decisions involving conflicting claims of creditor-beneficiary and insured's executor in the proceeds of such policies are of little help in the solution of the issue now before us. Most of them concern the proceeds in excess of the debt; here the beneficiary, holding an obligation of the deceased insured much larger than the proceeds of the policies, claims the right to collect that obligation in full and to retain also the full proceeds of the policies.

Page 3

Mrs. Chapman and her husband, lately deceased, operated a dairy farm, and also raised and exhibited show horses. They had no children of their own, but adopted and raised four, in addition to three nephews. James W. Scott, a colored boy, entered the Chapmans' employ about 1924, when he was some fifteen years old. He lived on their place, took care of their horses, and did other domestic and farm work. He was a faithful servant. In 1944 he bought, for $3,200, the tract of land in question, with a small house on it, near the Chapmans' farm. In 1948 he borrowed from Mrs. Chapman $4,250, on the security of the mortgage before mentioned; and about the same time he moved with his family [234 S.C. 473] to the tract that he had purchased, constructed on it a horse barn, and went into the business of boarding and training show horses and ponies. He continued to do occasional work for the Chapmans, and kept their horses for them. His venture into the business of a boarding and training stable met with success for a time, and he soon increased the capacity of his barn from four to seventeen stalls. His weakness, however, was draink; and as he became more and more addicted to it his clientele left him. By the summer of 1956 he was out of the horse business and back doing occasional work for the Chapmans. On January 30, 1957, at the age of forty-eight, he fell into an...

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6 practice notes
  • Froiland v. Tritle, No. 17659
    • United States
    • Supreme Court of South Dakota
    • February 11, 1991
    ...(1924); Amick v. Butler, 111 Ind. Page 313 578, 12 N.E. 518 (1887); Rittler v. Smith, 70 Md. 261, 16 A. 890 (App.1889); Chapman v. Scott, 234 S.C. 469, 109 S.E.2d 1 (1959). Other courts have noted that this rule applies only where there is not such a disproportion between the debt and the a......
  • Dibble v. Dibble, No. 18533
    • United States
    • United States State Supreme Court of South Carolina
    • July 14, 1966
    ...of the evidence. Twitty v. Harrison, 230 S.C. 174, 94 S.E.2d 879; Simonds v. Simonds, 232 S.C. 185, 101 S.E.2d 494; Chapman v. Scott, 234 S.C. 469, 109 S.E.2d 1; Watson v. Wall, 239 S.C. 109, 121 S.E.2d As pointed out in the circuit court decree family settlements are favored by the courts ......
  • Davis v. Southern Life Ins. Co., No. 18616
    • United States
    • United States State Supreme Court of South Carolina
    • March 8, 1967
    ...interest in his life and this principle is equally applicable to a change of beneficiary effected by the insured. Chapman v. Scott, 234 S.C. 469, 109 S.E.2d 1. It is the contention of the appellant that the change of the beneficiary in the insurance policy here involved was invalid, null an......
  • Mass. Mut. Life Ins. Co. v. Randall S. Hiller & A.E. Pennebaker Co., Civil Action No.: 6:16-cv-01643-JMC
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • September 29, 2017
    ...life for the benefit of anyone, regardless of whether that beneficiary has an insurable interest in the insured's life. Chapman v. Scott, 234 S.C. 469, 471 (1959). Moreover, a defense of lack of insurable interest can only be raised by the insurer. Bynum, 77 F. Supp. at 60. "When an insuran......
  • Request a trial to view additional results
6 cases
  • Froiland v. Tritle, No. 17659
    • United States
    • Supreme Court of South Dakota
    • February 11, 1991
    ...(1924); Amick v. Butler, 111 Ind. Page 313 578, 12 N.E. 518 (1887); Rittler v. Smith, 70 Md. 261, 16 A. 890 (App.1889); Chapman v. Scott, 234 S.C. 469, 109 S.E.2d 1 (1959). Other courts have noted that this rule applies only where there is not such a disproportion between the debt and the a......
  • Dibble v. Dibble, No. 18533
    • United States
    • United States State Supreme Court of South Carolina
    • July 14, 1966
    ...of the evidence. Twitty v. Harrison, 230 S.C. 174, 94 S.E.2d 879; Simonds v. Simonds, 232 S.C. 185, 101 S.E.2d 494; Chapman v. Scott, 234 S.C. 469, 109 S.E.2d 1; Watson v. Wall, 239 S.C. 109, 121 S.E.2d As pointed out in the circuit court decree family settlements are favored by the courts ......
  • Davis v. Southern Life Ins. Co., No. 18616
    • United States
    • United States State Supreme Court of South Carolina
    • March 8, 1967
    ...interest in his life and this principle is equally applicable to a change of beneficiary effected by the insured. Chapman v. Scott, 234 S.C. 469, 109 S.E.2d 1. It is the contention of the appellant that the change of the beneficiary in the insurance policy here involved was invalid, null an......
  • Mass. Mut. Life Ins. Co. v. Randall S. Hiller & A.E. Pennebaker Co., Civil Action No.: 6:16-cv-01643-JMC
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • September 29, 2017
    ...life for the benefit of anyone, regardless of whether that beneficiary has an insurable interest in the insured's life. Chapman v. Scott, 234 S.C. 469, 471 (1959). Moreover, a defense of lack of insurable interest can only be raised by the insurer. Bynum, 77 F. Supp. at 60. "When an insuran......
  • Request a trial to view additional results

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