Judson v. Walker

• Decision Date: 14 March 1900
• Citation: 55 S.W. 1083,155 Mo. 166
• Parties: JUDSON v. WALKER et al. HAX et al. v. SAME. FIRST NAT. BANK v. SAME. SCHUSTER-HAX NAT. BANK v. SAME. SPENCER v. SAME.
• Court: Missouri Supreme Court

55 S.W. 1083

155 Mo. 166

JUDSON v. WALKER et al.

HAX et al. v. SAME.

FIRST NAT. BANK v. SAME.

SCHUSTER-HAX NAT. BANK v. SAME.

SPENCER v. SAME.

Supreme Court of Missouri, Division No. 1.

March 14, 1900.

CREDITORS' SUIT — ACTION AGAINST CURATOR — NECESSARY AND PROPER PARTIES — PLEADING — ESTOPPEL — INSURANCE POLICIES — INSOLVENT HUSBAND'S ASSIGNMENT TO WIFE — VALIDITY — RIGHTS OF CREDITORS — EQUITABLE ASSETS — DISTRIBUTION.

1. A minor is a necessary party to an action against his curator affecting funds in the curator's hands belonging to the estate, as the title thereto is in the ward alone, and under Rev. St. 1889, § 5297, the curator has only the custody, care, and management thereof; and though, under section 5298, it is the curator's duty to represent his ward in all legal proceedings, the ward is in all cases the party, while his curator is his representative only.

2. Where life insurance policies, payable to the insured or his assigns, were assigned by him to his wife and children, the children have an interest therein, so as to make them proper parties to an action by a creditor of the insured seeking to subject to the payment of his claim proceeds of the policies in the hands of their curator, and claimed by them under the assignment.

3. Creditors of a decedent, seeking to subject to their claims insurance money in the hands of the curator of his minor children, cannot deny that, as between the curator and his

wards, the money belongs to the latter, where the creditors aver that he collected it and holds it as curator.

4. Where an insolvent husband voluntarily assigned to his wife insurance on his life, payable to himself and his assigns, and also surrendered a policy, and had the same reissued in her favor, the insurance being made payable to her in each case, without saying "to her sole and separate use," Rev. St. 1889, § 5851, authorizing her in her own name to insure his life for her sole use, applies, to entitle her to such insurance to the extent to which, under such section, it is exempt from the claims of his creditors where he pays the premiums: the married woman's law (Act March 25, 1875) entitling a wife to take transfers of personal property for her sole and separate use without the intervention of a trustee, and without technical words of limitation.

5. Rev. St. 1889, § 5851, entitles a wife to insure her husband's life for her own benefit, free from the claims of his creditors, but provides that, when the premiums paid in any year by the husband exceed $500, the exemption shall not apply to the excess, which, with interest, shall inure to the benefit of his creditors. Held, where an insolvent husband transferred policies payable to himself, so as to make them payable to his wife and children, that his creditors were entitled, under such section, to recover the amount paid for the insurance at the time it was effected for the benefit of his wife and children, plus premiums thereafter paid, minus the sum he was authorized by the statute to pay, and legal interest on the same.

6. Where creditors of a decedent brought separate actions to subject life insurance money claimed by his wife and children to the payment of their claims, the money recovered is equitable assets distributable among all the creditors pro rata in proportion to their respective claims.

Appeal from circuit court, Buchanan county; Thomas H. Parrish, Judge.

Five separate actions by Emily C. Judson, executrix of the estate of Winslow Judson, deceased, by John P. Hax and others, by the First National Bank of Buchanan county, by the Schuster-Hax National Bank, and by Oliver M. Spencer, respectively, against Mary V. Walker and others. By consent of parties, the five causes were consolidated; and from the judgment the plaintiffs in the first two causes, and the defendants in all, appeal. Reversed and remanded, with directions.

The above five suits were begun in the circuit court of Buchanan county on December 18, 1895, in the order above named. The plaintiffs in all the suits are creditors of James W. Walker, deceased; and the object of the suits is to subject to the payment of plaintiffs' debts the proceeds of three insurance policies on the life of James W. Walker, which were originally taken out by him for the benefit of himself, his executors, etc., or assigns, and afterwards assigned by him, — two of them to his wife and children, and the third surrendered and exchanged for a policy in favor of his wife. The defendants are the widow, one of the children, and the curator of the other children, of James W. Walker, deceased. The plaintiffs in the last three suits filed intervening petitions in the first, setting up their respective claims as in their petitions stated, and praying a pro rata application of the funds in question to their debts. By consent of parties the five causes were consolidated or tried together, and all disposed of in one decree. The petition in the first case states, substantially, that in January, 1895, plaintiff obtained judgment for $5,118.36 against James W. Walker upon a promissory note made by him the 28th of July, 1893, at which date he was owner of a large amount of property, was interested actively in large mercantile enterprises, and reputed to be a man of great wealth, but was in fact then, and continued thereafter to be, insolvent; that in 1888 Walker took out two policies on his own life in the New York Life insurance Company, — one for $10,000, and the other for $15,000, — payable at his death to his estate, both containing endowment features, under which, should he be living at a certain period, and the premiums have been paid, certain sums in cash, for the surrender of the policies, were to be paid to him, or in lieu, at his option, paid-up insurance would be issued to him; that about the same time he took out a policy in the Equitable Life Assurance Society for $10,000, with like provisions, and payable as the others; that on the ____ day of ____, 1894, with knowledge that he was hopelessly insolvent, voluntarily and without consideration, and with intent to hinder, delay, and defraud the plaintiff and his other creditors, he procured a transfer of the two New York Life insurance policies, with consent of the company, payable at his death to his wife and children, and at the same time, and with the same intent, surrendered to the Equitable the policy he held in that company, and in exchange took from it a policy for same amount and like terms, payable to his wife; that afterwards, on the ____ day of August, 1895, Walker died insolvent, leaving defendants Mary V., his widow, Anna, his daughter, and four other children, minors, for whom defendant Woodson is guardian and curator; that defendants Mary V., Anna, and Woodson, curator, have collected from the New York Life Company the amount due on those two policies ($27,625), and Mary V., widow, has collected the $10,000 of the Equitable; that Walker died intestate, and no administration has been taken on his estate, for the reason that he left no estate. The prayer of the petition is that the transfer of the policies be set aside, and the proceeds applied to the payment of plaintiff's debt, until it is satisfied. The petitions in the other cases were similar in their statements and purpose, varying in amounts as to the alleged indebtedness to the respective plaintiffs. The intervening petition stated, also, that the amount of annual premiums paid on the three policies was more than $2,000. Defendants answered by general denials. Upon the trial the evidence showed that the two New York Life policies, for $15,000 and $10,000, respectively, as above described, were issued to Walker in December, 1888, and the Equitable policy, for $10,000, January 8, 1891. They were all payable to James W. Walker, his executors, administrators, or assigns. The annual premiums of the two New York Life policies were $562.50 and $375, and that of the Equitable was $263. On January 22, 1894, Walker surrendered the Equitable policy to that company, and took in its place a policy identical with the one surrendered, except that it was payable to Mary V. Walker, if living; if not, then to James W. Walker, his executors, administrators, or assigns. On January 26, 1894, Walker, with the consent of the New York Life Company, assigned the two policies in that company to his wife, Mary V. Walker, and her children. At the time of the transfer of the two New York Life policies, and the surrender and reissue of the Equitable policy, the annual premiums had been paid as they fell due, and the policies were in full force. After the transfer and reissue above mentioned, the premium ($375) on the $10,000 New York Life policy due December 3, 1894, and that on the Equitable policy ($263) due December 2, 1894, were paid, presumably, by Walker; but the premium on the $15,000 policy due at same time seems not to have been paid, but in lieu thereof, in 1895, the policy, in accordance with one of its provisions, was extended, as a paid-up policy for the full amount, to a definite date, — November 3, 1908. The total amount paid for premiums on the three policies was $7,312, of which $6,674 had been paid before the assignment and reissue. At the date of the assignment and reissue these policies had each a surrender cash value, viz.: The $15,000 New York Life, $1,092.20, the $10,000 New York Life, $728.13; the Equitable, $204.85; total, $2,025.18. The trial court found that at the date of the transfer of these policies, January, 1894, Walker was indebted to the plaintiffs in the several amounts stated in their petitions, and that he was then insolvent, and we think the evidence sustains the finding; for, although his credit at that time was excellent, and the mercantile concerns with which he was connected had all the appearances of successful business, and doubtless, but for the untoward conditions that befell the internal commerce of the country at that period, would have...