Spalding, Etc., v. Miller

• Decision Date: 16 April 1898
• Citation: 103 Ky. 405
• Parties: Spalding, Etc. v. Miller.
• Court: Kentucky Court of Appeals

103 Ky. 405

Spalding, Etc. v. Miller.

Court of Appeals of Kentucky.

April 16, 1898.

APPEAL FROM MARION CIRCUIT COURT.

LAFE. S. PENCE FOR APPELLANTS.

J. P. THOMPSON FOR APPELLEE.

JUDGE Du RELLE DELIVERED THE OPINION OF THE COURT.

In 1890, appellee Miller was awarded a homestead in his wife's land, consisting of some ten acres of land and the buildings thereon. In August, 1891, he took out a policy of insurance, running for three years, with the Phoenix Insurance Company, of Hartford, for $4,000, of which $850 was on household furniture, and the remainder on the house, outbuildings, hay, etc. A slip was attached to the policy as part thereof, on April 30, 1892, signed by the agent of the company, stating that "The interest of the assured in the land on which the dwelling and other buildings are situated is an estate during his natural life." In 1892, the appellant Spalding bought the remainder interest in the property. In October, 1892, appellants took out a policy of insurance with the same company, running one year, for $1,000, it being stated in the policy that "This policy is subject to the homestead of James M. Miller, and subject to the lien of unpaid purchase money." Appellants claim that after the expiration of this policy it was renewed, but subsequently cancelled by the company, and T. B. Spalding states that the agent told him they were amply protected by Miller's policy. The agent, however, states that he refused to renew the policy, and informed Spalding of Miller's policy, and told him that if it was endorsed in the usual form it would protect his interests; but that he did not make the statement claimed by Spalding. On August 1, 1894, the house and part of the outbuildings, upon which the insurance amounted to $2,500, were destroyed by fire. The Spaldings asserted some claim to a part of this insurance, but it was paid, together with the insurance upon the furniture, etc., to appellee; and appellants brought suit against the company and Miller, claiming in the original petition that Miller, in obtaining the insurance, was the trustee, bailee and agent of the plaintiffs; that the fee simple of the property did not exceed in value $2,750, and that Miller's homestead rights therein did not exceed $833.80. They prayed judgment against both defendants for $1,916.20. By an amended petition, they prayed that Miller should be compelled to expend the money received from the company in erecting new buildings, or to pay it over to them (appellants), or required to execute bond for the payment of the entire sum at his death.

A demurrer by the Phoenix Insurance Company was sustained, and properly, as it had paid the amount of the insurance to the person whose interest it had agreed to insure.

Miller was required to answer, and upon final hearing the trial court dismissed the petition.

It is very earnestly contended by counsel for appellants that the property in which Miller was allowed a homestead was, by that judgment, valued at $1,000, and such valuation was conclusive as to the value of the property; that he ought not to be allowed to put himself in a position in which he would have no motive to properly preserve and care for the estate, by obtaining insurance to the full value of the fee simple estate therein; and further, that where a total loss results from fire, and the interest of the life-tenant is less than the amount of the insurance, then the insurance recovered should be used in rebuilding, or should go to the remainderman, reserving the interest to the life-tenant during his life.

As to the first two propositions stated it may be suggested, that they would have more weight if urged by the insurance company in answer to a suit by the life-tenant for the amount of the insurance. It seems quite probable that Miller received far more than the value of his life-estate in the property, and that if the company had resisted payment of the policy (which was issued before the act of December 3, 1892, "to regulate the liability of insurance companies in this State in certain cases"), it would have been successful in greatly abating the amount of the claim. But the question here presented is, whether in a case where the life-tenant has insured his life interest for an amount equal to the value of the fee, a trust results, either in the whole amount or in that part of it in excess of the value of the life-estate, for the benefit of the remainderman.

It is conceded that if Miller in insuring his life-estate had not placed an excessive value upon it, he would be entitled to the entire insurance. What ground, therefore has the remainderman to complain that Miller, by placing an excessive valuation upon his interest, obtained from the company a greater sum than in equity and good conscience he was entitled to. It is not pretended that there was any actual agency or express trust in Miller for the benefit of the remaindermen, or that he acted as their agent in obtaining the insurance; on the contrary, all the circumstances tend to show directly the opposite. The insurance was taken out before these remaindermen had any interest in the property. By the alteration in the contract of insurance, Miller expressly limited the interest insured to his life-estate. No payment of any part of the premium was made, or offered to be made, by the appellants.

But appellants claim that a trust resulted for the benefit of the remainderman, because of the excessive insurance obtained by the life-tenant upon his interest. There are cases in which it has been held that where a life-tenant intended to insure not only his own interest, but that of the remainderman, but the contract was, by the fault of the agent of the company, erroneously drawn for the benefit of the life-tenant alone, he could recover the entire insurance, but by assuming to insure the remainder as well as the life estate, he became trustee for the remainderman as to the excess of the judgment over the value of the life-estate. To this class belongs the case relied on by appellants of Welsh v. London Assurance Corporation (151 Penn. St., 618), where it was held that it was the intention of the party to insure the whole property, for the benefit not only of the plaintiff as life-tenant, but also of the remainderman. That case followed Miltenberger v. Beacom (9 Penn. St., 198), in which it was said:

"The contract of assurance, like other contracts, may be effected by the agency of a third person, without the authority of the person to be benefited, if he subsequently recognize it. It is true that to enable the beneficiary to sue upon it directly he must be expressly named."

But in the case at bar every circumstance appearing in the record tends to rebut the presumption that Miller, in effecting the insurance, intended to do so for any other than himself. Under the contract into which he entered after obtaining the advice of counsel he, and he only, was to be the insuree or beneficiary of the insurance contract. There was no assumption of agency. There is not a scintilla of evidence tending directly or indirectly to show that he intended to act for the benefit of any other. The trust for the remainderman's benefit, if any exist, must be a resulting trust, arising from a contract which was either actually or...