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VOLUME X VIII.
NEW YORK :
TENDERED IN INSURANCE CASES, IN THE UNITED STATES
STATE SUPREME COURTS.
From certified transcripts in our possession.
UNITED STATES SUPREME COURT.
OCTOBER TERM, 1888.
Appeals from the Supreme Court of the District of Columbia.
CENTRAL NATIONAL BANK, OF WASHINGTON CITY,
ET AL, Appellants,
CENTRAL NATIONAL BANK, OF WASHINGTON CITY,
ET AL. *
Policies on the life of a husband were issued for the benefit of his wife and
children. Two of them were issued upon applications in the name of the wife, and they were all made payable to her or to her and the children. Decision rendered, November 12, 1888.
Held, That when one takes out policies on his life for the benefit of his es
tate, the assignment of such policies for the benefit of his wife when insolvent is void as to creditors, but this rule applies only to that which the debtor could have made available for payment of debts. This case, however, is clearly distinguishable from policies taken out for the benefit
of the wife and children on their interest in his life. Held, That it is a general rule that a policy, and the money payable under it,
belong the moment it is issued to the beneficiary. Held, That even though the premiums were paid by the husband when in
solvent, the policies and the money payable under them belonged to the wife and children, not to the creditors. The latter could have no claim
to anything except the premiums paid. Held, That to recover the premiums from the insurance companies or the wife,
it must appear that they had constructive knowledge of the insolvency. Held, That where an insolvent husband receives the proceeds of his wife's
separate estate for her benefit, the wife is as equitably entitled to an ac
counting from the creditors as are the creditors from her. Held, That public policy permits an insolvent husband to devote a moderate
portion of his earnings to keep on foot a security for the benefit of his family in the absence of proof of fraudulent intent on the part of the
wife or insurance company. Held, Where it appeared that the husband had received for the benefit of his
wife and family from her relatives a sum more than sufficient to pay the premiums on policies procured for their benefit, creditors of the husband cannot in the absence of a fraudulent intent on the part of the wife or the
companies recover any part of the premiums. On the 23d of April, 1872, in consideration of an annual premium of $230.89, the Life Insurance Company of Virginia issued at Petersburgh, in that commonwealth, a policy of insurance on the life of Thomas L. Hume, of Washington, D. C., for the term of his natural life, in the sum of $10,000, for the sole use and benefit of his wife, Annie Graham Hume, and his children, payment to be made to them, their heirs, executors, or assigns, at Petersburgh, Virginia.
The charter of the company provided as follows : “Any policy of insurance issued by the Life Insurance Company of Virginia on the life of any person, expressed to be for the benefit of any married woman, whether the same be effected originally by herself or her husband, or by any other person, or whether the premiums thereafter be paid by herself or her husband or any other person as aforesaid, shall enure for her sole and separate use and benefit and that of her or husband's children, if any, as may be expressed in said policy, and shall be held by her free from the control or claim of her husband or his creditors, or of the person effecting the same and his creditors.” (Sec. 7.)
The application for this policy was made on behalf of the wife and children by Thomas L. Hume, who signed the same for them.
The premium of $230.89 was reduced by annual dividends of $34.71 to $196.18, which sum was regularly paid on the 23d of April, 1872, and each year thereafter, up to and including the 23d of April, 1881.
On the 28th of March, 1880, the Hartford Life and Annuity Company, of Hartford, Connecticut, issued five certificates of insurance upon the life of Thomas L. Hume, of $1,000 each, payable at Hartford, to his wife Annie G. Hume, if living, but otherwise to his legal representatives. Upon each of these certificates a premium of ten dollars was paid upon their issuance, amounting in all to $50, and thereafter certain other sums, amounting at the time of the death of Hume to $41.25.
On the 17th of February, 1881, the Maryland Life Insurance Company, of Baltimore, issued at Baltimore, a policy of insurance upon the life of Thomas L. Hume, in the sum of $10,000, for the term of his natural life, payable in the city of Baltimore to “the said insured, Annie G. Hume, for her sole use, her executors, administrators, or assigns;" the said policy being issued, as it recites on its face, in consideration of the sum of $337.20 to them duly paid by said Annie G. Hume, and of an annual premium of the same amount to be paid each year during the continuance of the policy. The application for this policy was signed "Annie G. Hume, by Thomas L. Hume," as is a recognized usage in such applications, and in accordance with instructions to that effect printed upon the policy.
The Charter of the Maryland Life Insurance Company provides as follows: Section 17. That it shall be lawful for any married woman, by herself or in her name, or in the name of any third
person, with his consent, as her trustee, to be caused to be insured in said company, for her sole use, the life of her husband, for any definite period or for the term of his natural life, and in case of her surviving her husband the sum or net amount of the insurance becoming due and payable by the terms of the insurance shall be payable to her to and for her own use, free from the claims of the representatives of her husband or of any of his creditors. In case of the death of the wife before the decease of the husband, the amount of the insurance may be made payable, after the death of the husband, to her children, or, if under age, to their guardian, for their use; in the event of there being no children, she may have power to devise, and if dying intestate, then to go [to] the next of kin.”
The directions printed on the margin of the policy called especial attention to the provisions of the charter upon this subject, an extract from which was printed on the fourth page of the appli