Pullis v. Robison

• Decision Date: 31 October 1880
• Citation: 73 Mo. 201
• Parties: PULLIS et al., Appellants, v. ROBISON.
• Court: Missouri Supreme Court

73 Mo. 201

PULLIS et al., Appellants,

v.ROBISON.

Supreme Court of Missouri.

October Term, 1880.

Appeal from St. Louis Court of Appeals.

REVERSED.

Cline, Jamison & Day for appellant Pullis.

1. Even though Robison may have been solvent when the policies were first taken out, and may have so remained for several years, yet, as the annual premiums are the life, essence and consideration of the contract, and as he was insolvent when he made the last annual payment, which money was that of his creditors, and the said payment gave the right of recovery against the insurance companies, his creditors are in equity entitled to have the proceeds of said policies applied to the payment of their debts, as the widow is a mere volunteer, and the insurance was procured with the creditors' money to the same extent as though the policies had been first taken out when the last annual premium was paid. The money that was paid in any one year only procured the insurance for that year, and the insurance for each succeeding year was procured by the payment of the premiums for that year. The payment of the premiums was an annual renewal of the contract--that is, they are contracts from year to year in consideration of the payment of the annual premiums.

2. The proper construction of the statute is, if the husband pays the premium and it exceeds $300 annually, the proceeds of the policy are liable for the debts of the husband; but if the widow with her separate estate, or if a friend or third party pays the premium, then the proceeds of the policy or policies are not subject to the payment of the debts of the husband. The law will not allow the husband to approrpriate more than $300 annually out of his means for insurance for the benefit of his wife, as far as his creditors are concerned. The premiums being over $300 annually, no portion of the policies in this case is free from the claims of creditors. Bliss Life Ins., p. 504, § 322; Charter Oak Life Ins. Co. v. Brant, 47 Mo. 425; Baker v. Young, 47 Mo. 456.

3. Even if Robison was not embarrassed, still as he died owing debts, and the annual premiums paid by him exceeded $300, the proceeds of said policies are liable for his debts, and any creditor may sue for the same.

4. The creditor who first files his bill obtains a priority. George v. Williamson, 26 Mo. 193; U. S. Bank v. Burke, 4 Blackf. 141; Hills v. Sherwood, 48 Cal. 393.

Rudolph Schulenburg for appellants Schulenburg & Boeckeler.

1. The court ought to have subjected to the claims of the creditors, not only the amount of the premiums, but so much of the total insurance money as is represented by the total premiums appropriated by Robison in fraud of his creditors. Bliss Life Ins., (2 Ed.) p. 353; Landrum v. Knowles, 22 N. J. Eq. 594.

2. The court ought to have subjected the whole insurance money to the claims of the creditors, although Robison was solvent until 1875 or 1876. (1) It was the premiums paid while he was insolvent which alone made the companies liable to pay the policies. (2) The insurance being procured by premiums out of the funds of Robison, the contract, in each case, was an executory contract on his part, and since it was supported, as between him and his wife, by consideration of love and affection only, it did not vest any interest whatever in her, as long as it was merely executory, to-wit: up to the time of his death. All the interest in such contract remained in him, subject to his power of disposition over the same; and since such his interest and power of disposition was at the time of his death subject to the claims of his creditors, the interest of his wife, when it became executed and vested on the husband's death, was subject to such creditors' claims also. Pennington v. Gittings, 2 Gill & J. 208; Stone v. Hackett, 12 Gray 227; Clark v. Durand, 12 Wis. 223 Kerman v. Howard, 23 Wis. 108; Landrum v. Knowles, 22 N. J. Eq. 594; Lemon v. Phœnix M. L. Ins. Co., 38 Conn. 294; Universal L. Ins. Co. v. Cogbill, 30 Gratt. 72; Barry v. Equitable L. Ins. Co., 59 N. Y. 587; Continental L. Ins. Co. v. Palmer, 42 Conn. 60; Worthington v. Curtis, Law Rep, 1st Ch'y Div. 419. This is certainly the law in Missouri. Charter Oak L. Ins Co. v. Brant, 47 Mo. 419; Gambs v. Covenant M. L. Ins Co., 50 Mo. 48; In re Murrin, 2 Dill. 120.

3. Pullis was not entitled to a priority. The decisions warranting such a priority have done so partly on the ground that a creditor's bill, which afterwards ripens into a decree, amounts to an equitable lien, and, like judgments, must date from the date of filing, and partly as a reward to the creditor most diligent. Under the laws of Missouri, judgments rendered at the same term enjoy no preference as between the parties plaintiff; and regarding the question of diligence these appellants beg leave to refer to the affidavit in support of a motion for new trial in the trial court.A. W. Slayback for respondent.

Mrs. Robison is alone entitled to the proceeds of the policies. Wag. Stat., p. 936, § 18; Loos v. The John Hancock Co., 41 Mo. 541; Myers v. Keystone L. Ins. Co.,27 Pa. St. 268; Chaplin v. Canada, 8 Conn. 286; Fellows v. Gilman, 4 Wend. 414, 419; Campbell v. New England M. L. Ins. Co., 98 Mass. 381; Bliss on Life Ins., 225, 317, 320, 323; In re Murrin, 2 Dill. 120, 126.

The policy effected by the husband on his life for the wife's benefit may be considered as a voluntary settlement; but even then, if made when he was solvent--and in the case at bar, the court finds this to be so--the creditors could not claim anything beyond what he paid after he became insolvent. Estate of Trough, 8 Phila. 214.

No court has been willing to go to the extent of holding that after several years of lawful and proper payments of the premiums, the one last payment, during a season of questionable solvency, would retro-act upon previous valid transactions, and vitiate all the dealings prior thereto. Such a doctrine seems monstrous. 17 Am. Law Reg., (N. S.) 1 to 11 and 73 to 83.

If the creditors had wished insurance on Robison's life, they should have procured it. They cannot take the widow's policies. Succession of Hearing, 26 L. Ann. 326. They are her absolute property. Barron v. Barron, 24 Vt. 375; Barry v. M. L. Ins. Co., 49 How. Pr. 504; Swan v. Snow, 11 Allen 224.

The policies were in force as the wife's property at the time the last payment was made. They were non-forfeitable, and, therefore, the act or intent of the husband at that time could not avoid her title. McAllister v. N. E. M. L. Ins. Co., 101 Mass. 558. The manifest purpose is not only to prevent creditors from reaching the fund by proceedings in law or equity, but to restrain the debtor from revoking in a moment of caprice or embarrassment the trust which he has once created upon a meritorious and by the statute a sufficient consideration. Gould v. Emerson, 99 Mass. 156; Lemon v. Phœnix M. L. Ins. Co., 38 Conn. 294; Chapin v. Fellows, 36 Conn. 132. These cases from Massachusetts and Connecticut were decided under statutes substantially the same as our own. They all were intended to create a separate provision for the wife, not subject to the husband's control and free from the clutches of creditors; but even before the statute, a husband or his creditors or representatives, were not entitled to the choses in action of the wife, unless reduced by him into possession during her life. Leakey v. Maupin, 10 Mo. 368. In regard to these policies such a thing could not be, and it is, therefore, not the husband's, or his creditors' or his representatives' right to enjoin the widow from collecting them. Under our statute a husband is permitted to withdraw funds not exceeding $300 for premiums on life insurance for the benefit of his wife. In re Yeager, 8 West. Ins. Rev. 378; Smith v. Mo. Valley Ins. Co., 3 Cent. Law Jour. 386.

The creditors are not entitled to the premiums paid by the deceased during his lifetime, while insolvent. Sess. Acts 1851, p. 296; Conn. M. L. Ins. Co. v. Burroughs, 34 Conn. 305; Burroughs v. State M. L. Ins. Co., 97 Mass. 359; Landrum v. Knowles, 22 N. J. Eq. 594; Unity M. L. Asso. v. Dugan, 118 Mass. 219; West v. Reid, 2 Hare 249; Burridge v. Row, 1 Young. & C. 183; Succession of Hearing, 26 La. Ann. 326; Stone v. Knickerbocker L. Ins. Co., 52 Ala. 592; Continental Ins. Co. v. Palmer, 42 Conn. 60; In re Bear, 1 Cent. Law Jour. 607; Gould v. Emerson, 99 Mass. 154; Cables v. Prescott, 67 Me. 582.

NORTON, J.

This is a proceeding in the nature of a creditor's bill, instituted by certain creditors of James P. Robison, deceased, whose claims had been allowed by the probate court against his estate, to subject to the payment of said debts the proceeds of certain policies of insurance taken out on the life of said Robison, and made payable to his wife. The creditors suing are three in number, and each having brought a separate action, the three suits were consolidated and tried together. Three of the policies, the proceeds of which constitute the subject matter of controversy, were issued by the Mutual Benefit Life Insurance Company, each of them being for $5,000, and dated respectively February 26th, 1867, February 21st, 1868 and May 12th, 1870. The amount of annual premiums was as follows: $283 on the one dated in 1867, $263 on the one dated in 1868, and $289 on the one issued in 1870. The plaintiffs claim and allege in their bill that Robison was in embarrassed circumstances, and at the time the premiums were paid he was insolvent, and that said policies were donated to his wife, and were procured for the purpose of hindering, delaying and defrauding creditors. Defendant, Mrs. Henrietta Robison, to whom said policies were made payable, denies all the allegations of the bill, and asserts her right to the proceeds of the same.

Upon the trial of the issues thus tendered, the court found that said Robison was solvent at the time said policies were taken out, and remained solvent till about the year 1876; that the payment of the two...