Vaughan v. Reddick

• Decision Date: 20 December 1907
• Citation: 106 S.W. 292
• Parties: VAUGHAN ET AL. v. REDDICK.
• Court: Kentucky Court of Appeals

106 S.W. 292

VAUGHAN ET AL. v. REDDICK.

Court of Appeals of Kentucky.

December 20, 1907

Appeal from Circuit Court, McCracken County.

"Not to be officially reported."

Action by J. T. Reddick against Solomon C. Vaughan and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

Kendrick Miller & Marble and Crice & Ross, for appellants.

Wheeler Hughes & Berry, for appellee.

CLAY C.

On November 20, 1885, Solomon C. Vaughan took out a life insurance policy in a New York company, known as the "Mutual Reserve Fund Association," on his own life for $5,000, naming as beneficiaries his wife, Julia D Vaughan, and his three daughters, Bessie V. Scott, Bertie Vaughan Dabney, and Mattie D. Vaughan. His wife, Julia D Vaughan, died several years ago. He and the other beneficiaries are still living. The company issuing the policy was an assessment company, and to keep the policy in force there had to be paid certain annual dues amounting to $10, and, in addition thereto, a mortuary assessment every two months, the amount of which was determined by the company and varied from time to time. In the latter part of the year 1895 Solomon C. Vaughan, having paid all annual dues and mortuary assessments to that time, became financially involved, and was unable longer to continue their payment, so for the purpose of providing for their payment he together with the beneficiaries, his wife, Julia D. Vaughan, and his three daughters, Bessie V. Scott, Bertie Vaughan Dabney, and Mattie D. Vaughan (Bessie V. Scott and Bertie Vaughan Dabney being married at the time, and Mattie D. Vaughan being then single, but now married and her name being Mattie D. Boone) executed the following obligation to the appellee, J. T. Reddick: "We the undersigned, the benificiaries named in Policy Number 39114, issued by the Mutual Reserve Fund Life Association of New York, for the sum of five thousand dollars, agree to pay to J. T. Reddick at the rate of two hundred dollars per annum for paying premiums and dues on the above policy from this date. Said policy issued upon the life of Solomon C. Vaughan, and for said J. T. Reddick's protection, the beneficiaries hereby assign the above said policy to the said J. T. Reddick for the payment of all advancements made by him at said rate per annum. Paducah, Ky. Nov. 4th, 1895. Solomon C. Vaughan. Julia D. Vaughan. Bessie V. Scott. Mattie D. Vaughan. Bertie Vaughan Dabney." Pursuant to the above agreement, appellee, J. T. Reddick, paid all dues and mortuary assessments from that time up to and including June, 1901. The amount so paid was $1,126.90. After that time he failed to pay any further dues or assessments, and the policy was lapsed for nonpayment thereof. This state of affairs continued without action on the part of any of the parties until August 8, 1906, when appellee brought suit in the McCracken circuit court against appellants Solomon C. Vaughan and Mattie D. Boone to recover the payments made by him, together with interest thereon from the time of each payment. Among other defenses Solomon C. Vaughan and Mattie D. Boone alleged that, by the terms of the agreement sued on, appellee contracted to pay all dues and assessments to the maturity of the policy; that by his failure to do so, they had been damaged in the sum of $5,000, which they pleaded and relied upon as a counterclaim. At the same time they asserted that the contract in question was signed by Bessie V. Scott and Bertie Vaughan Dabney, who, if any one was bound thereon, were equally bound with the answering defendants, and asked that their answer be made a cross-petition against the said Bessie V. Scott and Bertie Vaughan Dabney. The latter filed a demurrer and an answer pleading suretyship and coverture. Subsequently they withdrew their answer to the cross-petition, and stood upon their demurrer, which was overruled. Appellee in his reply to the answer of Solomon C. Vaughan and Mattie D. Boone first denied that he had agreed to pay all dues and assessments to the maturity of the policy, and then pleaded that all the notices of assessments and dues were sent direct by the company to Solomon C. Vaughan, and were then turned over by said Vaughan to appellee for payment; that this was done up to June 27, 1901, the time of the last payment by appellee; that the reason that appellee failed to make any further payments was due to the fact that said Vaughan failed to notify appellee of the first notice after that time, and appellee had no knowledge of the assessment next due until the same was past due and the policy had lapsed for the nonpayment thereof; and that, even if appellee was bound by the terms of the contract to continue the payments of dues and assessments to the maturity of the policy, he was released from said obligation by the failure of said Vaughan to notify him when the assessments were due and the amount thereof. There was introduced in evidence the policy of insurance, and also an assignment of the policy made about two months and a half after the execution of the original contract on one of the blanks of the company, containing the following: "Being unable financially at this time to pay the amounts necessary to keep the above-mentioned policy in force, I hereby agree to pay to J. T. Reddick at the rate of ($200) two hundred dollars per annum from November 1, 1895, so long as he shall keep in force said policy. In witness whereof I have hereunto set my hand and seal this 22nd day of January, 1896. Solomon C. Vaughan." On the back of said assignment is the following: "Dr. J. T. Reddick is to receive $200.00 per year in the place of what he may pay in mortuary premiums each year--and not $200.00 additional in what he might pay in premiums. S. C. Vaughan. J. T. Reddick." "I hereby consent to the within assignment. Solomon C. Vaughan. Julia D. Vaughan. Bessie V. Scott. Mattie D. Vaughan. Bertie Vaughan Dabney." Appellee also introduced the receipts from...