Howe's Exr. v. Griffin's Admr.

• Decision Date: 28 June 1907
• Parties: Howe's Exr. v. Griffin's Admr.
• Court: Kentucky Court of Appeals

126 Ky. 373

Howe's Exr. v. Griffin's Admr.

Court of Appeals of Kentucky.

June 28, 1907.

Appeal from Montgomery Circuit Court.

A. W. YOUNG, Circuit Judge.

Judgment for plaintiff, defendant appeals. — Reversed.

ROBERT H. WINN for appellant.

COPYRIGHT MATERIAL OMITTED

JOHN A. JUDY and HAZELRIGG, CHENAULT & HAZELRIGG for appellee.

OPINION OF THE COURT BY WM. ROGERS CLAY, COMMISSIONER — Reversing.

This is an action by John Hays, as administrator of Morris Griffin, deceased, appellee against John G. Winn, executor of C. W. Howe, appellant, to recover the proceeds of a policy of insurance for $9,500. which was issued upon the life of Morris Griffin by the Equitable Life Assurance Society and made payable to Howe & Johnson, a firm composed of J. G. Johnson and C. W. Howe.

The petition alleges that on the ____ day of April, 1893, Morris Griffin made a written application to the Equitable Life Assurance Society for a policy of insurance to be issued upon his life for the sum of $9,500, to be made payable to Howe & Johnson, which firm was composed of C. W. Howe and J. Gano Johnson, and that upon said application to said Equitable Life Assurance Society a policy of insurance upon the life of said Morris Griffin was issued, by which and in which it, in consideration of the advanced payment of $266 and of an annual payment of $266 to be made thereafter at the office of the society in the city of New York on or before the 24th day of April of each year during the continuance of the contract, promised to pay the sum of $9,500, upon satisfactory proof of the death of Morris Griffin of Mt. Sterling, Ky.; that all of the premiums upon said policy were paid for and in the name of said Morris Griffin, but were paid by said Howe & Johnson and the premiums were all paid upon the 24th day of April up until said Griffin's death; that, while the application stated on its face that said Howe & Johnson were creditors of Griffin, they were not in fact creditors of his except in the sum of about $300, of which amount $266 was loaned him to pay said premium, and the balance was for merchandise furnished said Griffin; and that the said Howe & Johnson had no insurable interest in the life of said Griffin other than as creditors, and had no greater insurable interest in his life than the sum so loaned and the value of the merchandise so furnished; that said policy was held by said Howe & Johnson in trust for said Griffin and his estate, and to secure to them the amount owing them by said Griffin with legal interest thereon; that after the death of said Griffin satisfactory proof was presented of the death of said Griffin to the Equitable Life Assurance Society, whereupon it paid to the said Howe & Johnson on the 15th day of August, 1900, the proceeds of said policy in the sum of $9,361.58, found to be due on said policy, all of which said sum was paid to said Howe & Johnson in trust for said Griffin's estate, except to the extent of the money loaned and the value of the merchandise so furnished, which amounts were due to Howe & Johnson; that the said Howe and Johnson, nor either of them, have ever paid the appellee the proceeds of said policy or any part thereof, and wrongfully withhold said sum from this plaintiff. After certain preliminary motions, which it will not now be necessary to consider, appellant filed a demurrer to the petition, which was overruled by the court. Thereafter appellant filed an answer in eight paragraphs. Paragraph 1 is a traverse, based upon appellant's want of information and belief of the facts set out in the petition. In view of the conclusion reached by the court, it will not be necessary to set forth the defenses contained in paragraph 2, 3, 4, 5, 7, and 8. Paragraph 6 is a plea of fraudulent conspiracy on the part of Griffin, Howe, and Johnson, by which they deceived the Equitable Life Assurance Society and induced it to believe that said Howe & Johnson were creditors of said Griffin, when in truth they were not his creditors in any sum. Said paragraph further states that the consideration which moved Morris Griffin to enter into said conspiracy was the issuance of an insurance policy on said Griffin's life in the sum of $500, to be made payable to said Griffin or his wife and children, who were dependent on him, and that the said Howe & Johnson agreed to and did maintain and keep alive said $500 policy until it became a claim against the Equitable Life Assurance Society which issued it. Demurrers were sustained to the second, third, fifth, sixth, and eighth paragraphs of appellant's answer. A motion to make more specific paragraph 4 was sustained and appellant declined to plead further, and the fourth paragraph was stricken from his answer. The net result of these steps was to eliminate all defensive matter, save the traverse of the petition and the counterclaim and set-off of the premiums paid. By agreement the case was then transferred to the equity docket, and an agreed state of facts was filed. From the agreed state of facts we gather the following undisputed points: (a) "On the 24th day of April, 1893, Morris Griffin made a written application for a policy of insurance to be issued upon the life of said Morris Griffin, for the sum of $9,500, payable to Howe & Johnson." Then the aplication is inserted in full. (b) In answer to question 1 on page 2 of the application, as to the relationship of the beneficiaries, Howe & Johnson, to Griffin, the latter's answer is "Creditors." (c) Then the following question: "Has the person in whose favor the assurance is to be effected an interest in the life of the assured equivalent to the amount of the assurance applied for?" Griffin's answer is "Yes." (d) A policy of insurance for $9,500, upon the life of Griffin was issued by the Equitable, and made payable to Howe & Johnson. This policy is set forth in the agreed facts. (e) The amount of premiums paid by Howe & Johnson and the dates when the payments were made are fixed. (f) The proceeds of the policy amounting to $8,728.22 were paid to Howe and Johnson (Griffin having died) on August 15, 1900. (g) Neither Howe nor Johnson was a creditor of Griffin, and neither had any insurable interest in his life. From the above it will be seen that Griffin made a written application for the insurance; that he represented Howe & Johnson, not only as creditors, but creditors to the full amount of the insurance applied for. Griffin's consent was necessary in order to obtain the insurance. When he signed the application and stated that Howe & Johnson were creditors to the full amount of the policy, when they were in fact not creditors at all, he knew as well as they that it was a lie and a fraud upon the Equitable Assurance Society. These facts taken alone are sufficient to show the fraudulent character of the scheme which they had devised for the purpose of cheating the insurance company. With this view of the record, it will not be necessary to discuss the propriety of the trial court's action in sustaining the demurrer to the sixth paragraph of appellant's answer, but the rights of the parties to this action may be determined by the agreed...