Pavy v. Peoples Bank & Trust Co.

• Citation: 135 Ind.App. 647,195 N.E.2d 862
• Decision Date: 04 February 1964
• Docket Number: No. 19773,No. 1,19773,1
• Parties: Arnold R. PAVY, American Fletcher National Bank and Trust Company, Appellants, v. PEOPLES BANK AND TRUST COMPANY, Administrator with the Will Annexed of John G. Pavey, Deceased, et al., Appellees
• Court: Court of Appeals of Indiana

Page 862

195 N.E.2d 862

135 Ind.App. 647

Arnold R. PAVY, American Fletcher National Bank and Trust Company, Appellants, v. PEOPLES BANK AND TRUST COMPANY, Administrator with the Will Annexed of John G. Pavey, Deceased, et al., Appellees.

No. 19773.

Appellate Court of Indiana, Division No. 1.

Feb. 4, 1964.

Rehearing Denied March 2, 1964.

Gustav H. Dongus, Henry J. Elias, Indianapolis, Fansler, Fauvre, Dongus & Gemmer, Indianapolis, of counsel, for appellants.

Harold E. Hutson, Indianapolis, for appellees.

COOPER, Judge.

This matter comes to us from the Probate Court of Marion County, wherein the appellee, Peoples Bank and Trust Company, as Executor of the Will of John G. Pavey, deceased, and also as Trustee under said Will, filed a petition with said Court requesting instructions from the Court as to the proper application of the proceeds of a certain life insurance policy in the amount of Fifty Thousand ($50,000.00) Dollars, paid to said appellee as Trustee and also as the beneficiary named in said policy.

It appears from the record that after various proceedings, the trial court entered the following pertinent final order:

'Comes now the parties; Peoples Bank and Trust Company, Executor of the last will and testament of John G. Pavey, deceased and as trustee, Lucille E. Pavey, widow of said John G. Pavey, deceased, and Arnold A. Pavy, American Fletcher National Bank and Trust Company, Peoples Bank and Trust Company, Thomas and Alice Teller creditors of the estate of John G. Pavey, and the Court now finds:

'1. That on the 3rd day of February, 1961, the Peoples Bank and Trust Company, Executor of the last will and testament of John G. Pavey, and as Trustee, filed in this Court its petition seeking instructions as to the disposition of proceeds received from Empire Life and Accident Insurance Company, in the amount of Fifty Thousand ($50,000.00) dollars, which proceeds were payable under terms of a policy on the life of deceased, John G. Pavey, to Peoples Bank and Trust Company, as trustee; and that on March 7, 1961, a hearing was held on said petition for instructions.

'2. That on March 7, 1961, this Court ordered and ruled in the matter of said petition for instructions that the said proceeds received by the Peoples Bank and Trust Company, as Trustee, were not a part of the estate of John G. Pavey, deceased, but were to be held in trust by said Trustee.

'3. That on April 7, 1961, Arnold R. Pavy, a creditor in the estate of said John G. Pavey, deceased, filed in this Court his petition to vacate and set aside the previous order of this Court of March 7, 1961, for the reason that creditors of said estate had no notice of the filing of Executor's petition for instructions and the hearing held thereon; and that a summary hearing was held on April 25, 1961, on said petition of Arnold R. Pavy, creditor, and that at such summary hearing this Court ordered said petition set down for a formal hearing thereon upon due notice to all creditors.

'4. That on June 14, 1961, on formal hearing held on said petition of Arnold Pavy, creditor, at which proof of notice to all creditors was filed by the executor, this Court vacated and set aside its order of March 7, 1961, and reset Executor's and Trustee's said petition for instructions for hearing on June 28, 1961; and that on June 28, 1961, a hearing was held on said petition for instructions, which said hearing was continued until July 11, 1961, and the June Term of Court was duly extended by the Court so that this matter might be heard and disposed of in term time; and that on July 11, 1961, this matter was finally heard and argued orally by counsel, concluded, and taken under advisement by this Court.

'5. That in the Court's previous order of March 7, 1961, said peoples Bank and Trust Company, as Trustee, was allowed and authorized to pay out of the insurance proceeds a certain sum of creditors, Thomas and Alice Teller, as a charge against said trust for the care and maintenance of said widow.

'6. That at a time more than five (5) years before his death, John G. Pavey took out a policy of life insurance on his life, with Empire Life and Accident Insurance Company, in the amount of Fifty Thousand ($50,000.00) dollars naming and making his wife, Lucille E. Pavey, the beneficiary thereon.

'7. That he paid the premium due on said policy until his death, and that on the 26th day of April, 1960, three (3) days prior to making his last will and testament and seven (7) days prior to taking his own life, he changed or attempted to change the beneficiary of said policy to Peoples Bank and Trust Company, as Trustee.

'8. That on April 29, 1960, he executed his last will and testament leaving his entire estate to Peoples Bank and Trust Company, trustee, in trust for the benefit of his wife, Lucille E. Pavey for life and then to their four (4) children.

'9. That on the 5th day of May, 1960, said John G. Pavey, took his own life.

'10. That prior to the date on which said deceased attempted to so change the beneficiary of said policy, his wife, Lucille E. Pavey had been committed to Larue Carter Hospital for treatment of a mental disorder and was released therefrom shortly prior to the execution of said change of beneficiary and the last will and testament of said deceased.

'11. That upon taking his own life said deceased left a suicide note in which he stated that Peoples bank and Trust Company would have control of all property and insurance money for the family.

'12. The Court further finds that said insurance was taken out by deceased for the benefit of his said wife and four (4) children.

'13. That due to the mental illness of his wife, said deceased intended when he changed or attempted to change said insurance beneficiary to protect his said wife and their children as evidenced by the statement contained in said 'suicide note and testator's last will and testament' and that therefore the proceeds of said policy should be for the use and benefit of said wife and children in keeping with the terms of said policy and the last will and testament of deceased and the intent of testator.

'Upon the foregoing findings of fact the Court new enters its conclusions of law as follows:

'1. That the proceeds from said insurance policy should be received and held by said Peoples Bank and Trust Company as Trustee for the use and benefit of said wife and children, free and clear of all claims of creditors of the estate of John G. Pavey, deceased, in keeping with all the terms of said insurance policy, testator's last will and testament, and the obvious intent of the testator.

'2. That therefore, the previous order of the Court in the matter dated March 7, 1961, should stand and be reinstated as the order of this Court.

'IT IS THEREFORE ORDERED, ADJUDGED AND DECREED by the Court that the order of this Court heretofore entered on March 7, 1961, in this matter be, and now is reinstated and restated as the order, judgment and decree of this Court in this matter, and that said Peoples Bank and Trust Company shall receive and hold said proceeds of fifty Thousand ($50,000.00) dollars from said insurance policy as trustee, in trust to be administered and carried out in accordance with the provisions of the said last will and testament of said John G. Pavey, deceased, and that the action of said Peoples Bank and Trust Company, as Trustee, in regards to these matters, including the payment of said sum of Six Thousand six Hundred ($6,600.00) dollars to said Tellers and their attorney fees, are all hereby confirmed, ratified and approved by the Court.'

Thereafter, it appears that within the proper time, the appellants filed their motion for new trial, averring therein, in substance, that the decision of the trial court is not sustained by sufficient evidence and is contrary to law. The motion for new trial was overruled and the trial court's ruling on said motion is the error assigned in this appeal.

The facts in this cause are not conflicting as the record reveals that most all of the evidence was stipulated. A concise statement of the facts are as follows:

The decedent, John G. Pavey, died testate, a resident of Marion County on May 5, 1960, and Peoples Bank and Trust Company was appointed and qualified as administrator with the will annexed on May 20, 1960. The will was executed on April 29, 1960, or six days before his death by suicide. Item First of his will directs the payment of all his debts and...