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(154 Minn. 186, 191 N. W. 428.) Nat. Bank v. Hume, 3 Mackey, 360, 51 Mass. 409, 64 Am. St. Rep. 309, 49 N. Am. Rep. 780; Pullis v. Robison, 73 E. 659; Ray v. Simmons, 11 R. I. 266, Mo. 201, 39 Am. Rep. 497; George v. 23 Am. Rep. 447; Pope v. Burlington Williamson, 26 Mo. 193, 72 Am. Dec. Sav. Bank, 56 Vt. 284, 48 Am. Rep. 203; Stitt v. Rat Portage Lumber Co. 781; Hirsh v. Auer, 146 N. Y. 13, 40 98 Minn. 52, 107 N. W. 824.

N. E. 397; Devol v. Dye, 123 Ind. 321, Ross made a valid change of the 7 L.R.A. 439, 24 N. E. 246; Milholland beneficiaries under policy No. 86,518, v. Whalen, 89 Md. 212, 44 L.R.A. 205, and the change, or attempted change, 43 Atl. 43; Marquette v. Wilkinson, so made by him, is binding in a court 119 Mich. 413, 43 L.R.A. 840, 78 N. of equity; and the provision in the W. 474; Martin v. Funk, 75 N. Y. 134, by-laws of the company, or in its 31 Am. Rep. 446; Stone v. King, 7 policy, is for the benefit and protec- R. I. 358, 84 Am. Dec. 557; Field v. tion of the company; and paying the Arrowsmith, 3 Humph. 442, 39 Am. money into court, the company there- Dec. 185; Williamson v. Yager, 34 Am. by waived strict compliance.

St. Rep. 214, note; Coyne v. SuSupreme Conclave, Ř. A. v. Cappella, preme Conclave, I. 0. H. 14 Ann. Cas. 41 Fed. 1; Titsworth v. Titsworth, 40 870 and note, 106 Md. 54, 66 Atl. 704; Kan. 571, 20 Pac, 213; Hall v. Allen, Kerr v. Crane, 40 L.R.A. (N.S.) 692 75 Miss. 175, 65 Am. St. Rep. 601, 22 and note, 212 Mass. 224, 98 N. E. 783; So. 4; Frakes v. Brotherhood of Loco- Silvey v. Hodgdon, 52 Cal. 363; Donmotive Firemen, Mo. App. —, 204 ithen v. Independent Order of ForestS. W. 26; Taylor v. Grand Lodge, A. ers, 209 Pa. 170, 58 Atl. 142; Hirst v. 0. U. W. 45 N. D. 468, 178 N. W. Auer, 79 Hun, 493, 29 N. Y. Supp. 917, 130.

affirmed in 146 N. Y. 13, 40 N. E. 397. Plaintiff was mentioned and named Messrs. Canfield & Michael, for beneficiary in the $6,000 policy for the respondent: purpose of creating a trust in behalf Independently of any statute, a of the creditors of Ross; and, by rea- husband may rightfully devote a modson thereof, she became trustee for erate portion of his earnings to insure said creditors, and has no special or his life, and make reasonable provipersonal interest in the amount due sion for his family after death, withunder said policy.

out being thereby held to intend to Van Dyke v. Johns, 1 Del. Ch. 93, 12 hinder, delay, or defraud his creditors, Am. Dec. 76; Young v. Young, 80 N. Y. even though he is insolvent when he 422, 36 Am. Rep. 634; Doan v. Ascen- effects such insurance and afterwards, sion Parish, 103 Md. 662, 7 L.R.A. provided no such fraudulent intent is (N.S.) 1119, 115 Am. St. Rep. 379, 64 shown to exist or must necessarily be Atl. 314; Witherington v. Herring, 140 inferred from the surrounding cirN. C. 495, 53 S. E. 303, 6 Ann. Cas. 188; cumstances. Ranney v. Byers, 219 Pa. 332, 123 Am. 12 R. C. L. 510; Hise v. Hartford St. Rep. 660, 68 Atl. 971; Clark v. L. Ins. Co. 90 Ky. 101, 29 Am. St. Callahan, 105 Md. 600, 10 L.R.A.(N.S.) Rep. 358, 13 S. W. 367; Central Nat. 616, 66 Atl. 618, 12 Ann. Cas. 162; Bank v. Hume, 128 U. S. 195, 32 L. ed. Coyne v. Supreme Concave, I. 0. H. 370, 9 Sup. Ct. Rep. 41; Pence v. Make106 Md. 54, 66 Atl. 704, 14 Ann. Cas. peace, 65 Ind. 347; Ætna Nat. Bank v, 870.

United States L. Ins. Co. 24 Fed. 770; The use of the word “trust" or Stigler v. Stigler, 77 Va. 163. “trustee" is not an essential to the Testimony of Craford in regard to creation of a trust.

statements made to him by deceased Colton v. Colton, 127 U. S. 300, 32 was inadmissible. L ed. 138, 8 Sup. Ct. Rep. 1164; Clark

Perine v. Grand Lodge, A. O. U. W. v. Callahan, 10 L.R.A.(N.S.) 616 and 48 Minn. 82, 50 N. W. 1022; Peterson note, 105 Md. 600, 66 Atl. 618, 12 Ann.

v. Merchants Elevator Co. 111 Minn. Cas. 162; Nichols v. Allen, 130 Mass.

105, 27 L.R.A.(N.S.) 816, 137 Am. St. 211, 39. Am. Rep. 445; Kendrick v.

Rep. 537, 126 N. W. 534; Adams v. Ray, 173 Mass. 305, 73 Am. St. Rep.

Elwood, 176 N. Y. 106, 68 N. E. 126. 289, 53 N. E. 823; Parrish v. Merchants & M. Sav. Bank, LR.A.1917C, 568,

Quinn, J., delivered the opinion of note; Bath Sav, Inst. v. Hathorn, 88

the court: Me. 122, 32 L.R.A. 377, 51 Am. St. Rep.

Plaintiff and Charles H. Ross, 382, 33 Atl. 836; Gerrish v. New Bed

now deceased, were husband and ford Inst. for Sav. 128 Mass. 159, 35 wife, and resided with their nine Am. Rep. 365; Welch v. Henshaw, 170

children on a farm near Beaver

Creek, in Rock county. The defend- 1921, requested the insurance com-
ant, Minnesota Mutual Life Insur- pany to change the beneficiary in
ance Company, issued two policies the $6,000 policy, so that the plain-
to the deceased, one for $5,000, on tiff would receive $4,000 thereun-
March 29, 1918, and one for $6,000, der, Ivan G. Ross, $1,000, and Or-
on June 30, 1920, in each of which land Ross, $1,000, and that the said
the plaintiff was named as the sole Ivan G. and Orland Ross thereafter
beneficiary. The husband was in- assigned the $2,000 payable to them
solvent at the time the two policies as such beneficiaries to the appellant
were issued, as well as at the time bank; third, that the policy for
of his death, which occurred on July $6,000 was issued to the plaintiff for
15, 1921. This action was brought the purpose of creating a trust in
against the company to recover upon behalf of the creditors of the in-
both policies. The company an- sured, and that she did, by reason
swered and thereafter paid into thereof, become such trustee, and
court, to await the outcome of the that the plaintiff has no special or
litigation, the amount of the face of personal interest in or to the pro-
both policies, less $240, the amount ceeds of said policy.
of the annual premium on the second The annual premium on the policy
policy, which fell due about the time for $5,000 was $174, and the amount
of the death of the insured, and paid on that policy was, in the ag-
asked that the First National Bank gregate, $696. But one annual
of Beaver Creek, Orland Ross, and premium had been paid on the policy
Ivan G. Ross, be substituted as de- for $6,000 prior to the death of the
fendants, and allowed to assert their insured, namely, $240, paid at the
claims to the money so paid into time of the issuance of the policy.
court. An order was accordingly Section 3465, Gen. Stat. 1913, pro-
made, substituting said parties as vides as follows: "Whenever any
defendants, and the insurance com- insurance is effected in favor of an-
pany withdrew from the case. A other, the beneficiary shall be en-
notice of the substitution was then titled to its proceeds against the
served upon the Ross boys, but they creditors and representatives of the
did not appear or answer. The person effecting the same. All
cause was tried to the court upon premiums paid for insurance in
the complaint, answer of the bank, fraud of creditors, with interest
and reply. The court made findings thereon, shall inure to their benefit
of fact, and ordered judgment in from the proceeds of the policy, if
favor of the plaintiff. From an or- the company be specifically notified
der refusing to amend the findings thereof in writing before payment. "
and denying its motion for a new It is not contended that the in-
trial, the defendant bank appeals. sured was guilty of any actual fraud,

The appellant urges three gener- or that he entertained any fraud-
al propositions why the defendant ulent intent in taking out either of
bank is entitled to recover in this the policies in question, or in paying
action and why a new trial should any of the premiums thereon. The
be granted, viz.: First, that during contention of appellant is that, un-
the period from the time of the is- der the statute, and in view of the
suance of the first policy to the time insolvency of the insured, the pay-
of his death, the insured was insol- ment of such premiums amounted in
vent, and that the payment of the law to a fraud on his creditors, with-
premiums on said policies was in out reference to the motive or actual
fraud of his creditors, and that by intention of the insured, and with-
reason thereof the appellant bank, a out regard to the amount of the in-
creditor, is entitled to recover from surance or premiums paid: We are
the proceeds of the policies the unable to agree with this conten-
amount of the premiums so paid; tion.
second, that the insured, on June 29, There being no claim or proof of

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(154 Minn, 186, 191 N. W. 428.) any actual fraud, the question pre- not to accumulate a fund as a persented is whether the obtaining of manent provision, but to devote a the insurance, or payment of the moderate portion of his earnings to premiums, while the insured is in- keep on foot a security for support solvent, is, in itself, necessarily a already, or which could thereby be, fraudulent transfer of his property lawfully obtained; at least to the exwith intent to hinder, delay, and tent of requiring that, under such defraud his creditors, within the circumstances, the fraudulent intent meaning of the statute. It will be of both parties to the transaction observed that the statute does not should be made out." attempt to define what shall consti- In that case it was further held, tute fraud. That it includes both in effect, that an insolvent husband actual and constructive fraud will may insure his life and keep such hardly be questioned. One of the insurance alive for the benefit of his highest duties of a husband and family, without thereby being held father is to provide for his family to intend to hinder, delay, or deduring his life, and to make provi- fraud his creditors; and after his sion for it after his death. To this death they will have no interest in Insurance-for

end he may devote the proceeds of the policy. Baron v. benefit of wite a moderate portion Brummer, 100 N. Y. 372, 3 N. E. fraud,

of his earnings to 474; Pinneo v. Goodspeed, 120 Ill. insure his life, in favor of his wife, 524, 12 N. E. 196; Johnson y. Alexand so make reasonable provision ander, 125 Ind. 575, 9 L.R.A. 660, 25 for the future, without thereby be- N. E. 706; Chapin v. Fellowes, 36 ing held to have intended to defraud Conn. 132, 4 Am. Rep. 49; Harvey v. his creditors, even though he was in- Harrison, 89 Tenn. 470, 14 S. W. solvent when he effected the insur- 1083. ance or paid the premiums. To In the instant case the trial court maintain an action on behalf of the found from the evidence, as matters creditors of a deceased husband, to of fact, that from the time of the recover premiums paid by him, issuance of the first policy to the while insolvent, in order to provide time of his death, the insured was

for his family after insolvent; that the defendant bank Fraudulent

his death,

death, fraud was one of his creditors; that the must not only be al- insured paid premiums on said pol

leged but proved. icies to the amount of $963; that in However, in such cases a fraudulent procuring said insurance and in intent may be shown to exist, or paying the premiums thereon, there may be inferred, from surrounding was no fraudulent intent or purpose circumstances. Notes in 29 Am. St. on the part of the insured to hinder, Rep. 360, and 87 Am. St. Rep. 489; delay, or defraud his creditors, but 12 R. C. L. p. 510. In Central Nat. that he procured the same and paid Bank v. Hume, 128 U. S. 195, 32 L. the premiums thereon in good faith, ed. 370, 9 Sup. Ct. Rep. 41, the Su- for the future protection of his wife preme Court held, speaking through and family; that the amount of such Chief Justice Fuller, that "this ar- insurance was not excessive or ungument in the interest of creditors reasonable for the protection of the concedes that the debtor may right- widow and minor children of the fully preserve his family from suf- insured; that there was no change fering and want. It seems to us beneficiaries in said policies or that the same public policy which either of them; that the writing justifies this, and recognizes the signed by the two individual defendsupport of wife and children as a ants, requesting the payment of positive obligation in law as well as $2,000 of the proceeds of said pol. morals, should be extended to pro- icies to the defendant bank, was tect them from destitution after the without consideration, procured by debtor's death, by permitting him, fraud, and void; and that the plain

31 A.L.R.-4.

conveyance insurance for wite.

tiff was the owner and entitled to ed to as being incompetent, irrelereceive the whole of said insurance. vant, and immaterial, and asking We think the findings are amply for a conversation between the witsupported by the proofs. Plaintiff ness, who was interested in the event

was left without a of the suit, and a deceased person. Evidence home of any sort The evidence was received subject sufficiency. and without

any to a future ruling on its admissibilmeans of support, save her ability ity. It does not appear from the to labor; the children were all mi- record that any ruling was therenors excepting one; six were wholly after made. It is a well-established dependent upon the plaintiff, and rule in this state the other minor ones were partially that, if evidence is dence subject to so. Under such circumstances we admitted subject to future ruling

exceptions. see no reason for disturbing the a future ruling on conclusions arrived at by the learned its admissibility, the party wishing trial court in relation thereto.

to avail himself thereof should re. Under the foregoing holding new his objection at the proper time there is nothing to the second con- and secure a ruling thereon. See tention made on behalf of appellant, cases cited, $ 9737, Dunnell's Dig. that it is entitled to $2,000 of the (Minn.). The evidence offered was

proceeds of the sec- clearly objectionable under the stat-right to proceeds of insur- ond policy through ute. We discover no prejudicial erance policy.

the pretended as- ror in the other rulings of the court signment thereof by the Ross boys upon the admissibility of evidence, September 19, 1921, for the reason to which objection was made. that they had no interest in the in- Affirmed. surance which they could assign. The same is true as to the third con

Dibell, J., concurring: tention with reference to the so

I concur in the result. The tescalled trust. If the insured pro

If the insured pro timony of Crawford, a stockholder cured the policies and paid the

of the appealing bank, relative to his premiums thereon in good faith, for

conversation with the deceased conthe future protection of his wife and

cerning the $6,000 policy, was rechildren, and there was no change in

ceived and the ruling reserved. No the beneficiary, then the wife was in

ruling was subsequently made. His

testimony is either in, to be weighed no sense a trustee for the creditors.

in reaching a conclusion, or not in Upon the trial appellant offered in evidence the reply which plaintiff and not to be considered. There is made to the answer of the insurance

no ruling on the question of compecompany, which was objected to and

tency for review on this appeal. received with the statement from Besides, the plaintiff, who says the the court that he might change his

evidence was incompetent, is not ruling afterward. The record does an appellant. My understanding is not show that any other ruling was that the testimony is in. Considermade thereon. This evidence was ing it so, the court was not in error offered for the purpose of showing in refusing to find as requested by the insolvency of the insured, which the fifth proposed finding, that the was conceded throughout the trial deceased, when he took the $6,000 by both parties.

policy, created a trust for his credUpon the trial P. M. Crawford, a itors, with the plaintiff as trustee. stockholder in the defendant bank, Conceding, without holding, that a was called as a witness by the ap- trust of such character can be crepellant, and was asked to state a ated by parol, at variance with the conversation which he had had with terms of the policy, the testimony of the deceased, relative to the benefi- Crawford, though it be accepted as ciary to be named in the policy for literally true, falls short of requir$6,000. This question was object- ing such a finding. In my judgment (154 Minn, 186, 191 N. W. 428.) it shows no more than an unexecut- ment with anyone, coupled with a ed purpose, when he first negotiated suggestion that "he would name his for the insurance, to protect his wife to pay his creditors," and he creditors, not communicated to his did not do it. creditors, not constituting an agree- Petition for rehearing denied.

ANNOTATION.

Right of insolvent to insure life for benefit of relatives.

I. Introduction, 51. II. In general:

a. Doctrine upholding right, 52.

b. Doctrine denying right, 55. III. Amount of insurance which is reason

able as against creditors, 57. IV. Nature and extent of creditors'

rights, 60. V. Construction and effect of statutes: a. Liberal or strict construction,

62. b. Fraud as to creditors in general,

63.

V.-continued.

c. Question as affected by person

who effects insurance, or who

is beneficiary, 66. d. Amount recoverable by creditors,

68. e. Effect of provisions of policy or

nature of insurance, 72. f. Miscellaneous, 73. VI. Subsequent creditors, 75. VII. Miscellaneous, 77.

1. Introduction. The question under annotation should be distinguished from the general question of statutory exemption of insurance payable to the wife or family of the insured, it being the purpose to include herein only those cases dealing with the effect of the fact that, at the time the insurance was procured or the premiums paid, the assured was insolvent. See, as an example of cases excluded, Jones v. Patty (1895) 73 Miss. 179, 18 So. 794, where the question was as to the amount of the proceeds of insurance which was exempt; but the court said there was no averment that the insured was insolvent when the premiums were paid, and that the bill, which was brought by creditors, proceeded upon the theory that, because the intestate paid the premiums, the policies were his property.

The present annotation does not include cases of assignment of an insurance policy on his life by a husband to his wife or other relatives, these cases being included in the annotation in 6 A.L.R. 1173, on the question of validity, as against creditors, of change of beneficiary of insurance policy from estate to individual. While cases of assignment may be of value on the present question, and

the annotation referred to should be consulted in this connection, yet, in some of the cases, at least, a distinction is made between those cases where the policy of insurance is originally taken out by insolvent for the benefit of his wife or family, belongs to them, and has never been a part of his estate, and cases where the policy was at one time a part of the estate of the insured, but was transferred by him while insolvent. This distinction is recognized in a number of cases. Central Nat. Bank v. Hume (1888) 128 U. S. 195, 32 L. ed. 370, 9 Sup. Ct. Rep. 41; Masonic Mut. Life Asso. v. Paisley (1901) 111 Fed. 32; Hendrie & B. Mfg. Co. v. Platt (1899) 13 Colo. App. 15, 56 Pac. 209; Elliott's Appeal (1865) 50 Pa. 75, 88 Am. Dec. 525; McCutcheon's Appeal (1881) 99 Pa. 133.

In Central Nat. Bank v. Hume (U. S.) supra, the Federal Supreme Court said that the obvious distinction between the transfer of a policy taken out by a person upon his insurable interest in his own life, and payable to himself or his legal representatives, and the obtaining of a policy by a person upon the insurable interest of his wife and children, and payable to them, has been repeatedly recognized by the courts.

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