Irons v. U.S. Life Ins. Co.

• Decision Date: 26 March 1908
• Citation: 128 Ky. 640,108 S.W. 904
• Parties: IRONS et al. v. UNITED STATES LIFE INS. CO. OF NEW YORK et al.
• Court: Kentucky Court of Appeals

108 S.W. 904

128 Ky. 640

IRONS et al. v. UNITED STATES LIFE INS. CO. OF NEW YORK et al.

Court of Appeals of Kentucky.

March 26, 1908

Appeal from Circuit Court, Grayson County.

"To be officially reported."

Action by Mary E. Irons and others against the United States Life Insurance Company of New York and others. From a judgment of dismissal, plaintiffs appeal. Reversed as to defendants Jess T. Gosnell and another, and affirmed as to defendant the United States Life Insurance Company of New York.

G. W Stone and J. S. Wortham, for appellants.

Charles Carroll, J. C. Graham, Jess T. Gosnell, and W. O. Jones, for appellees Gosnell and Jones.

Augustus E. Wilson and M. K. Yonts, for appellees U.S. Life Ins. Co.

LASSING J.

In 1890 Benjamin Wells, an unmarried man, caused his life to be insured for the sum of $2,500 in the United States Life Insurance Company of New York, the premiums to be paid in 10 annual installments, and the money, at his death, to go and be payable to his sister, Lydia Spriggs Bunch, and her surviving children, share and share alike. At that time Mrs Bunch was a widow, with three small children, six, eight, and ten years old, and all dependent upon her brother, Benjamin Wells, for a support. The premiums were regularly paid, when due, during each year until the year 1900, when the last of the 10 payments called for under the terms of the policy was paid, and the policy became a paid-up policy. At that time the children of Mrs. Bunch were 16, 18, and 20 years of age respectively. They had no estate whatever; and their mother, for the alleged purpose of raising money to complete their education and to support them, instituted an equitable action in the Grayson circuit court for the purpose of securing an order for the sale of the paid-up policy of insurance. Prior to the institution of this suit she had appeared in the Grayson county court, and had been, on her motion, appointed and qualified as guardian for her three children. She caused her brother, Benjamin Wells, and the United States Life Insurance Company of New York, to be made parties defendant to this equitable action. In this equitable suit she set forth fully the needs and necessities of her children, alleged that the policy of insurance was the only estate of any kind whatever owned by them, and that a sale of it was necessary in order to raise the funds needed to support and educate them. Her brother, Benjamin Wells, filed an answer, consenting to said sale, and joining in the prayer of the petition. The insurance company answered, asking that its interest be protected. Proof was taken by affidavits in support of the allegations of the petition, and it was also shown by the affidavit of Lydia Spriggs Bunch that she was 45 years of age, and had passed the change of life, and could not bear further issue. Thereafter the case was submitted, and judgment was rendered in conformity with the prayer of the petition. The plaintiff, Lydia Spriggs Bunch, was appointed a special commissioner for the purpose of selling the policy. At the following term of court she, as special commissioner, filed her report, setting forth the fact that she had sold same to appellees Gosnell and Jones for the sum of $731.18. No exceptions having been filed to this report of sale, it was confirmed, and, acting under the direction given in the judgment ordering the sale, the company transferred to Gosnell and Jones as purchasers the policy of insurance. In May, 1906, Benjamin Wells died. Proofs of loss were promptly furnished the company by Gosnell and Jones, and on the 17th of May, 1906, the insurance company paid to them in satisfaction and settlement of the policy the sum of $2,500, the full face value thereof. On August 16, 1906, Mary E. Irons, Minnie M. Dense, and Benjamin Bunch brought suit in the Grayson circuit court against the United States Life Insurance Company of New York, Jess T. Gosnell, W. O. Jones, and their mother, Lydia Spriggs Stevenson, she having married again, setting up the facts as to the issuing of the policy of insurance in their favor, the judgment of the Grayson circuit court directing its sale, and the sale and transfer thereof to appellees Gosnell and Jones, the death of their uncle, Benjamin Wells, and the payment of the money, as above recited, to them. The circuit court dismissed the petition, and the plaintiffs appeal.

Neither Gosnell nor Jones, when they purchased the policy, had any insurable interest in the life of Benjamin Wells. In a long line of decisions this court has held that the purchaser of a policy of insurance on the life of another in which he has no insurable interest except as creditor will hold the proceeds of the policy over and above his debt in trust for the...