State Of West Va. v. Phoenix Mut. Life Ins. Co.
Citation | 114 W.Va. 109 |
Decision Date | 26 September 1933 |
Docket Number | (CC 475) |
Parties | State of West Virginia v. Phoenix Mutual Life InsuranceCompany, a corporation, et al. |
Court | Supreme Court of West Virginia |
The pure contractual rights arising out of an insurance policy are ordinarily determined by its provisions, but it is a basic rule of construction that all general legal principles affecting contracts enter by implication into and form a part of every contract as fully as if specifically expressed therein.
It is a fundamental rule of the common law that no man shall be permitted to profit by his own wrong, and it is a settled expedient of equity to impress a constructive trust on whoever acquires property rights by the commission of a wrong to hold the same as a trustee for the one equitably entitled thereto.
A resulting trust is raised by a court of equity only to remedy the position of one having an equitable interest in the trust property.
"Where the beneficiary in a life insurance policy murders the insured, the doctrine of public policy will extend no further than to denying to such beneficiary the right to recover. Johnston Adm'r. v. Ins, Co., 85 W. Va. 70, 100 ©. E. 865.
Upon the murder of an insured by the beneficiary of a life insurance policy, the beneficiary being the sole distributee of the insured, the State may not escheat the sum named in the policy as derelict.
Case Certified from the Circuit Court, Kanawha County.
Suit by State of West Virginia against Phoenix Mutual Life Insurance Company and others. Sufficiency of original and amended bills certified to Supreme Court of Appeals after Circuit Court had sustained them on demurrers.
Reversed.
L. 8. Trotter and John T. Copenhaver, for the state.
Brown, Jackson & Knight and Geo. 8. Couch, for defendant Insurance Company.
This suit involves the right of the State of West Virginia to escheat the proceeds of an insurance policy as derelict and without a rightful owner (bona vacantia).
The State by T. C. Townsend, tax commissioner, filed bills (original and amended) which contain the following allegations: In April, 1926, Albert F. 0 'Dell secured an insurance policy on his life for the sum of $5,000 from the defendant, the Phoanix Mutual Life Insurance Company; the beneficiary in the policy was O'Dell's wife, Elsie, with the right reserved to him to change the beneficiary; in September, 1926, (while the policy was in full force) Mrs. O'Dell feloniously killed her husband and two days afterwards took her own life; O'Dell died intestate and M. M. Wickline was appointed his administrator; Mrs. 0 'Dell left a will naming B. J. Pettigrew as executor; Wickline as administrator prosecuted a suit against the insurance company to recover the proceeds of the policy but was denied recovery by this Court in Wickline, Adm'r. v. Ins. Co., 106 W. Va. 424, 145 S. E. 743; O'Dell left no blood relatives, and his wife was his sole distributee; there are no unpaid creditors of his estate; the heirs of Mrs. O'Dell are not entitled to the insurance (because of her crime), the insurance company is not entitled to keep it, it is without rightful owner, and is accordingly escheated to the State.
Upon demurrers of the insurance company the circuit court sustained the bills and certified their sufficiency to this Court.
The insurance company makes the point that murder of the insured by the beneficiary is a risk impliedly excepted from the policy. As I am not in accord with my brethren on this point Judge Maxwell has very kindly furnished a statement of the position of the Court thereon, as follows:
The "trust fund" doctrine was adopted by this Court in Johnston v. Ins. Co., 85 W. Va. 70, 100 S. E. 865, 867, which is similar in all material respects to this suit. That case held that (a) public policy would not permit a beneficiary who had murdered the insured to recover the insurance; (b) the crime of the beneficiary does not extinguish the insurance fund but "a trust results in favor of the estate of the insured"; and (c) where the beneficiary is the sole distributee of the insured, his personal representative will be denied a recovery of the insurance, in order to prevent the beneficiary securing the fund by indirection under the law of descents and distributions. The trust fund doctrine under subsection (b) seems to have radiated in the states from the case of Schmidt v. Life Ass'n., (1900) 112 Iowa 41, 83 N. W. 800. Some misgiving has arisen because of the precedents relied upon in that decision, which were the English case of Cleaver v. Mutual Ass'n., (1891) 1 Law Rep. Q. B. Div. 147, and certain state decisions. The English decision was in conformity with the Married Woman's Property Act of 1882 which provided that a policy payable to a wife (no trustee of the fund having been appointed) should vest in the assured or his legal representatives in trust for her. The several state decisions cited in...
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