Court Opinion

ID: 6694327
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:45:47.941569+00
Date Added: 2024-06-11T12:04:57.662570
License: Public Domain

Oook, J.,
dissenting: I do not concur with the Court in its opinion in this case. The report of the referee shows a clear and distinct agreement between the obligor of the bond, B. F. Sutton, Jr., and Junius E. Sutton, one of his sureties ■on behalf of himself and co-sureties. He signed the same and assumed the liability upon the inducement and promise that he, the guardian, would insure his life for the protection ■of his wards and bondsmen. In compliance with this agree*111ment. be did take out a life-policy for the sum of $2,000 with the declared purpose of protecting said wards and bondsmen against any loss which might occur to the estate of said wards. The indemnity was required because the guardian was not a man of means. The policy was issued in the names of John and Laura. The guardian died after having squandered the wards’ funds, and the present plaintiffs qualified as their guardians, collected the amount of the insurance policy, and now sue upon breach of the bond for the penalty, to be discharged upon payment of about $1,500, the amount of default.
Defendants contend that John and Laura became trustees of the insurance policy for the benefit primarily of defendants, and that the fund when collected should be applied first to discharge the liabilities of the sureties upon the guardian bond. This contention seems to me to be sound in law and equity. In giving effect to it, the guardian fund is protected and made whole, and a great wrong and hardship to the sureties averted.
There was a contract entered into between the guardian and sureties based upon a valuable consideration, viz, the assumption of an obligation to pay money for him, which became executed when the policy was taken out. The legal title to the policy was placed in John and Laura, but the record shows that it was done with the expressed intention and purpose of the assured to create a fund in compliance with his agreement with Junius E. Sutton, to secure the money due said wards and protect his said sureties. The language and acts of the parties were unequivocal, and there can be no doubt about the intention of the parties that the policy should be held in trust, which they had a right to create by parol. Adams Eq., 28; Beach on Mod. Eq. Jur., sec. 161. And there can be no question as to the right of an obligor to in*112sure his life for the protection of a surety upon an official bond. Scott v. Dickson, 108 Pa. St., 6, 56 Am. Rep., 192.
In creating this trust by parol, it was not material whether the trustees accepted or declined — in fact, they were infants and incapable of accepting, declining or acting — for a court of equity will not allow a trust to fail for want of a trustee, nor be vitiated by reason of the incapacity of the trustee named, on account of infancy, lunacy or otherwise; any defect of this character would be supplied by the Court.
The plaintiff further contends that the funds arising from the jDolicy belong to his wards, John and Laura, because they were the children of the assured, and that the father is entitled by law (Constitution, Art. N, sec. 7) to insure his life for the benefit of his (wife and) children, and the amount thus insured shall be paid over “free from all claims of his representatives or any of his creditors.” This contention would be sound if the insurance had been effected solely for their benefit. But the record shows that it was not so effected. The assured had four children besides John and Laura, two of whom were still younger — and for neither ol Aese was any benefit provided by the policy. John and Laura were his creditors, and the insurance was obtained for them as his wards, who, as such wards and creditors, had an insurable interest in his life, independent of the relationship, which clearly appears to have been the sole motive prompting the parties in taking out this insurance.
The Constitution (Art. X, sec. 7) does not impose any obligation upon the father to insure his life for the sole use of his children (and wife), but simply licenses him to do so. “The husband may insure his own life for the sole use and benefit of bis wife and children, and in case of the death of the husband the amount thus insured shall be paid over to the wife and children, or to the guardian, if under age, for her or their own use, free from all the claims of the reprc-*113sentatives of lier husband, or any of his creditors.” He may so insure his life, or otherwise, as he may deem fit. He may insure it for the benefit of creditors, or in part for creditors and in part'for wife and children. Am., etc., Insurance Co. v. Robertshaw, 26 Pa. St., 189. In effecting the insurance, he has the right to do so for the benefit of any one who may have an insurable interest in his life. The only guarantee given him by our Constitution is that, having insured for the benefit of his wife and children, the amount thus insured shall be their property and no part of his estate; or he may insure it for his own benefit so as to make it assets in the hands of his personal representative.
It is true a presumption of law arises when a father takes title to property in the name of a child, that he intended co make a provision for the child and not to create a trust, which presumption becomes still stronger when the child is an infant and legally incapable of acting as a trustee for the father. But in this case it was not the intention or purpose that the beneficiaries named should have an absolute estate and in-teres^ii* the policy, which is clearly shown by the facts found and rebuts the presumption of law raised in their favor. The C ict that it was placed in the names of John and Laura gives them no greater right or interest than was intended by the party creating the trust. They paid nothing for the policy, and obtained only such title as was intended by the creator of the trust — being infants, they did not and could not consent or act. It became their property charged with such in-cumbrance as their father had seen fit to place upon it; and, in this instance, it was a proper and honest charge, and the contention of the plaintiff ought not to prevail. All that the plaintiff could in good conscience expect and require from the sureties on the bond of his wards’ father, was the full amount of their money which they had obligated to secure *114and make good to them, and this they have received, for it was at the instance of Jnnius E. Sntton that the policy was taken ont, and the condition upon which he signed the bond and became liable, and it has enured to the full benefit of his wards, for which they should be content.
After receiving every dollar of their money from the source provided for that purpose by Junius on behalf of himself and co-sureties, it would be unconscionable as well as gross injustice for the plaintiff to recover the amount again out of the property of the sureties. I therefore think that the proceeds of the policy ought to be applied, first, to the discharge of the liability of the sureties upon the bond.