Pope v. Carter

• Decision Date: 17 January 1924
• Docket Number: 6 Div. 968.
• Citation: 98 So. 726,210 Ala. 533
• Parties: POPE ET AL. v. CARTER ET AL.
• Court: Alabama Supreme Court

98 So. 726

210 Ala. 533

POPE ET AL. v. CARTER ET AL.

6 Div. 968.

Supreme Court of Alabama

January 17, 1924

Appeal from Circuit Court, Jefferson County; William M. Walker Judge.

Suit by Benjamin Carter, trustee, and others against Sada H. Pope and others. From a decree overruling demurrer to the bill respondents appeal. Affirmed.

W. H Woolverton and Thomas J. Wingfield, both of Birmingham, for appellants.

Benj. Carter, of Washington, D. C., for appellees.

BOULDIN J.

Life insurance, taken out, and premiums paid by the insured, and payable to his estate, is property subject to the payment of his debts. A voluntary conveyance or transfer of such policies of insurance is constructively fraudulent and void, as against the existing creditors of the insured.

Proceeds of policies so carried by the husband, payable to his estate, and transferred to his wife by a change of the beneficiary named in the policies made after the husband has become insolvent, without valuable consideration, are subject to the claims of the husband's creditors existing at the time of such transfer. Such transaction is subject to all the rules governing fraudulent conveyances. The wife, in such case, cannot hold the funds as exempt under section 4502 of the Code of 1907.

A creditors' bill in equity is the proper remedy to reach and subject such funds to the payment of the husband's debts. The personal representative of the insolvent estate of the deceased husband is a proper party to such bill, and also trustees who hold the funds for investment for the use of the wife. Friedman Bros. v. Fennell, 94 Ala. 570, 10 So. 649; Fearn v. Ward, 80 Ala. 555, 2 So. 114; Tompkins v. Levy, 87 Ala. 263, 6 So. 346, 13 Am St. Rep. 31; Hall & Farley v. Ala. Ter. Imp. Co., 143 Ala. 464, 39 So. 285, 2 L. R. A. (N. S.) 130, 5 Ann. Cas. 363; Lehman v. Gunn, 124 Ala. 213, 27 So. 475, 51 L. R. A. 112, 82 Am. St. Rep. 159; McCrory v. Donald, 192 Ala. 312, 68 So. 306; Beall & Coston v. Lehman Durr Co., 110 Ala. 446, 18 So. 230; Martin v. McDaniel, 170 Ala. 270, 53 So. 790.

In Kimball v. Cunningham Hdwe. Co., 192 Ala. 223, 68 So. 309, Id., 197 Ala. 631, 73 So. 323, the policies were, in the first instance, made payable to the wife as required by the exemption statute. The gross premiums paid by the husband exceeded the amount allowable under section 4502 of the Code. It was held that only the excess was subject to the husband's debts. That case...