Millard v. Beaumont

• Decision Date: 15 April 1916
• Docket Number: No. 1776.,1776.
• Citation: 194 Mo. App. 69,185 S.W. 547
• Parties: MILLARD et al. v. BEAUMONT et al.
• Court: Missouri Court of Appeals

185 S.W. 547

194 Mo. App. 69

MILLARD et al. v. BEAUMONT et al.

No. 1776.

Springfield Court of Appeals. Missouri.

April 15, 1916.

Rehearing Denied May 9, 1916.

Appeal from Circuit Court, Texas County; L. B. Woodside, Judge.

Suit by Homer S. Millard and others against Charles M. Beaumont, executor of the estate of E. M. Millard, and others, to determine the interests of plaintiffs and defendants in the proceeds of a fire insurance policy. From the judgment rendered plaintiffs appeal. Reversed and remanded, with directions.

Barton & Impey, of Houston, for appellants. Lamar, Lamar & Lamar, of Houston, for respondents.

STURGIS, J.

This is a suit to determine the respective interests of plaintiffs and defendants in the proceeds of a fire insurance policy. The insured property, both real and personal, belonged to Elizabeth M. Millard, who insured the same in her favor. The policy makes no provision whatever as to the loss being paid to her administrator or executor. During the life of the policy, but after the death of the insured, the property was destroyed by fire. The insured left a will, duly executed and probated, disposing of the property insured by this clause:

"Second: I give, devise and bequeath to my nephew Homer S. Millard, during his life, the house, household furniture and grounds and all the appurtenances thereto belonging which constitute my home place, where I now reside in Houston, Texas county, Missouri, to have, hold, occupy and enjoy during his natural life; but without the power of incumbrance or alienation, and it is my will that he have full use and benefit of the same to occupy as his home if he so desires, and if not, to have the rents and income therefrom during his lifetime, and at his death, it is my wish and I hereby direct that said property real and personal shall pass to and become vested in the bodily heirs of the said Homer S. Millard, but without the power to incumber, alienate, lease or otherwise transfer or burden the title to said property until after the expiration of twenty-one years after the death of the said Homer S. Millard."

After the death of the insured, and before the fire, the said Homer S. Millard procured the insurance company to add a clause to the policy, providing that "the loss, if any, is payable to Homer S. Millard as his interest may appear." On the proofs of loss being presented, the insurance company raised no question as to the validity of the policy, but paid same, making the payment, for its own protection, to Homer S. Millard, beneficiary under the will, and Charles M. Beaumont, executor of the said will of E. M. Millard, deceased, who had owned and insured the property. The insurance company paid, as loss, $1,500 on the house and $200 on the furniture. An arrangement was then made by which the proceeds of the policy was placed in the hands of the executor, who yet holds the same. The plaintiffs here are the said Homer S. Millard and certain creditors of his, to whom he assigned his interest in the fund and who claim only through him. We shall speak of Homer S. Millard as plaintiff. The defendants are the said executor of the will of Elizabeth M. Millard, and the minor children, the bodily heirs of the plaintiff, Homer S. Millard. The facts are not disputed. The trial court rendered judgment that:

"Said insurance policy was to indemnify those interested in the property described therein, according to their interest in said property, that under and by virtue of the terms of the last will and testament of Elizabeth M. Millard, Homer S. Millard, the assignor of the plaintiffs herein, took and had at the time of said fire a possessory interest only in said property, and that the only right the said Homer S. Millard had to said insurance money, and the proceeds of said policy, was to have the executor of the said Elizabeth M. Millard use and expend said money in rebuilding and replacing a house on said land, in the place and in lieu of the house destroyed by said fire, and to use and occupy said house, or to enjoy the rents thereon in the same manner and in the same extent as he might have enjoyed the original house had it not been destroyed, and that the remainder, in and to the said house and land, after the expiration of the interests of the said Homer S. Millard, is vested in the defendants Thomas Franklin Millard and Wade Millard, and any other children and heirs at law of Homer S. Millard that may hereafter be born; and it is ordered, adjudged, and decreed that the said Charles M. Beaumont, executor of the estate of Elizabeth M. Millard, use the money now in his hands, collected from the insurance on the buildings destroyed by said fire, in rebuilding a dwelling house on said lands, and that defendants recover of and from the plaintiffs herein their costs in this suit laid out and expended, and that they have execution therefor."

The plaintiff has appealed.

The decree just mentioned narrows too much the plaintiff's interest in the property covered by the insurance policy in question. We think the will clearly gives a life estate in such property to plaintiff, with remainder to his bodily heirs. The will attempts to deprive the life tenant, this plaintiff, of all power to incumber or alienate his interest in this property. But whether such restrictions be void or not, the plaintiff is given a vested life estate. His interest in this land, under the will, is more than that of a beneficiary of a spendthrift trust. Here the life tenant has title and ownership, and is given the possession of the property and the right to collect the rents and receive the income, and no trustee is appointed. There is no trust estate created, and the restrictions as to alienation or incumbrance of his interest in the property are void. Kessner v. Phillips, 189 Mo. 515, 524, 88 S. W. 66, 107 Am. St. Rep. 368, 3 Ann. Cas. 1005.

Viewing the land as being vested in the plaintiff for life and remainder to his bodily heirs, what interest does such life tenant have in the proceeds of this policy? The plaintiff contends that on the death of the insured the policy was forfeited, as it was a mere contract of indemnity with the insured personally, and that the clause making the loss payable to him was in effect a new contract with him, and therefore the amount paid on the policy belongs solely to him. To the contrary, several authorities are cited as holding that a policy of insurance, unless expressly so provided, is not forfeited by the death of the insured, but continues for the benefit of the heirs or beneficiaries under the will. 19 Cyc. 743; Forest City Ins. Co. v. Hardesty, 182 Ill. 39, 55 N. E. 139, 141, 74 Am. St. Rep. 161; Planters' Mutual Ins. Ass'n v. Dewberry, 69 Ark. 295, 62 S. W. 1047, 86 Am. St. Rep. 195; Pfister v. Gerwig, 122 Ind. 567, 23 N. E. 1041; Richardson v. Ins. Co., 89 Ky. 571, 13 S. W. 1, 8 L. R. A. 800. An examination of the above cases discloses, however, that each contains some provision for payment of the loss to the administrator or executor. These cases deal with the question of whether a policy is forfeited by reason of the change of ownership occasioned by death of the insured where the policy provides for a forfeiture in case of any change or transfer of the title, and hold the negative of that proposition.

The general, if not universal, rule is that fire insurance contracts are purely indemnity contracts, in favor of the insured only, do not run with the land, and, in the absence of some special provision to the contrary, the loss recovered, if any, must be a loss to the person insured, and excludes any loss after the insured's death, or after he parts with his title and interest in the property. 19 Cyc. 583, 591; 13 Enc. of Law (2d Ed.) 100; Quarles v. Clayton, 87 Tenn. 308, 10 S. W. 505, 3 L. R. A. 170; Hine v. Woolworth, 93 N. Y. 75, 45 Am. Rep. 176; Sauner v. Phœnix Ins. Co., 41 Mo. App. 480, 486; Doggett v. Blanke, 70 Mo. App. 499, 502; Trabue v. Ins. Co., 49 Mo. App. 331, 335.

But in the present case the insurance company recognized its liability as continuing after the death of the insured, both by the loss payment clause added thereto after the death of the insured, and later by the actual payment of the loss, so that the question of the indemnity being personal to the insured is out of the case. Nor do we think there was any new contract entered into with the life tenant for his personal indemnity against loss, as there might have been, since he had an insurable interest. Dick v. Ins. Co., 10 Mo. App. 376; Kempf v. Ins. Co., 41 Mo. App. 27, 33. The plaintiff life tenant paid no premium or consideration for a new contract, and the continuation of the policy in favor of the owners of the property was based on the premium previously paid by the insured in her lifetime. The loss payment clause, making the loss payable to plaintiff, the life tenant, "as his interest may appear," should not be construed to have the effect of giving him the entire fund absolutely as an indemnity for his loss. It should be construed rather as merely perpetuating the policy in favor of the successors to the title of the property insured. In Ridge v. Ins. Co., 64 Mo. App. 108, the facts showed the insurance of property in which one Sallie Ridge had a life estate, with remainder to the plaintiff in that case. The policy contained a clause making the loss payable to the life tenant "as her interest may appear." The court held that:

"Under the evidence Mrs. Ridge was not the sole beneficiary in the policy. She was only a life tenant, and as such her interest in the amount of the insurance at the date of the loss was to be determined according to her `expectancy' as shown by the life tables. The remainder of the fund belonged to the plaintiff as the owner of the fee. By the terms of the policy the loss was...