In this case, however, there is the fact which alters and colors the whole transaction, and is fundamental and controlling in its nature, and that fact is that the moneys which procured the insurance were trust moneys, and, although invested in the policies, they were subject at the very moment of such investment to the right of the owner of the funds to follow them into whatever change of form they might assume, and to claim the thing into which they were changed as if it were the original fund. In the case in the federal court the whole matter was discussed with reference to the violation of the statute of Connecticut, based upon the statute of Elizabeth (13 Eliz. c. 5) prohibiting the transfer of the property of an individual in fraud of his creditors. We have a statute to the same effect, 2 Rev. St., p. 137, §1. The learned chief justice said that the statute was passed to prevent debtors from dealing with their property to the prejudice of their creditors, but dealing with that which creditors irrespective of such dealing could not have touched was within neither the letter nor the spirit of the statute. This was spoken of the insurable interest of the wife, and it was spoken in regard to creditors as that term is generally used. In this case it is not in the simple character of a creditor of Mr. Gilman, or of the defendant Mrs. Gilman, that the plaintiff asks relief. He seeks the aid of a court of equity to enable him, in the character of a cestui que trust, to follow his property which was wrongfully converted by one bearing towards him the obligations of a trustee, and by such trustee invested in these policies, and such cestui que trust now asks, in substance, for his own property, or for the property into which his trust funds were wrongfully converted, and we think he has the right to recover the property which represents and stands in the place of the original trust fund. The case in the federal court is not at all parallel, and is, therefore, no authority against our contention. Whether at common law or under the provisions of our statute the procurement of policies of insurance in the wife's name, under the facts developed in this case, does not prevent the cestui que trust from following and claiming the trust funds or their proceeds. If the proceeds of these policies had been greater than the whole amount of the indebtedness of the husband to the cestui que trust, arising out of the husband's breach of trust, we do not decide what might in equity be the different rights of the wife and such cestui que trust in the balance, or whether any different rule could be logically applied. The husband in this case converted over $200,000 of what stood in the nature of a trust fund, and the plaintiff recovers only a little over one-fourth thereof in case the judgment on the referee's report be affirmed. We simply decide the case now before us. Creditor as the Insured. * AMICK v. BUTLER. Supreme Court of Indiana, 1887. 111 Ind. 578, 12 N. E. 518. MITCHELL, J. This is a case in which a debtor, presumably at the solicitation of his creditor, effected an insurance on his own life for the benefit of his creditor, the latter being designated in the policy as the beneficiary, and agreeing to pay the expense of effecting the insurance, and of keeping the policy in force. It was also agreed that the debtor might at any time pay the debt, and reimburse the creditor for outlays in effecting and maintaining the insurance, and thereby entitle himself to an assignment of the policy. It was entirely at the option of the debtor whether or not he would reimburse the creditor for the sums expended in procuring the insurance. Whatever the creditor might have done in respect to the collection of his debt, it was beyond his power to compel the insured to reimburse him for his advances in procuring and maintaining the policy. The debtor had not agreed to repay advances voluntarily made. The advances having been made for the creditor's own benefit, he had no remedy against the debtor, or his legal representatives, to recover them. The rule in cases involving analogous principles is that where the owner of property vests the title absolutely in another, in pursuance of an agreement which gives the grantor the option to repurchase or not at his election, the transaction does not create a mortgage. Voss v. Eller, 109 Ind. 260, 10 N. E. Rep. 74; Hays v. Carr, 83 Ind. 275. The right to the policy, and to the benefits to be derived therefrom, were absolute in the beneficiary until both the debt and the advances were paid, even conceding that the oral agreement referred to would have been enforceable in the lifetime of the insured. The beneficiary in a life policy who has an insurable interest in the life of the insured at the inception of the policy may enforce payment for the full amount, notwithstanding the debtor on whose life it runs may have paid the debt. "Any interest sufficient to justify the insurance, and relieve it of the gambling aspect, will render it valid, and such policy will continue valid in the hands of a beneficiary or assignee, regardless of the cessation of interest, provided the facts show entire good faith and a sufficient justification." Hine & N. Life Ins. 82; Olmsted v. Keyes, supra; Connecticut Mut., etc., Co. v. Schaefer, supra. Perhaps owing to the particular nature of contracts, such as we are considering, if the debtor in his lifetime had tendered the amount of the debt and the advances, the claim of the legal representative might be supported. But, in the absence of an offer to comply with his agreement, we can discover no rational ground upon which the court can now compel the appellant to surrender money to which, according to every principle of law, he has a perfect title, and in which neither the debtor nor his representatives ever had any interest, legal or equitable. A distinguishing element in the determination of cases of this character is whether the one whose life is insured so contracts himself to pay the premiums that an action could be maintained against him by the creditor for that amount. If such a contract is shown, then the policy is to be regarded as a collateral security, and the debtor is entitled to it upon the extinguishment of the principal debt; while, on the other hand, if the creditor pay the premiums, and the debtor is under no obligation to repay them, the right of the creditor is absolute. Freme v. Brade, 2 De Gex & J. 582; Knox v. Turner, L. R. 5 Ch. 515; Gottlieb v. Cranch, 4 De Gex, M. & G. 440; Godsal v. Webb, 2 Keen 100. TABLE OF CONTENTS FORMS (The figures refer to those at the foot of the pages.) CHAPTER I. COMMERCIAL FORMS. NO. PAGE 1. Agreement for Submission to Arbitration... 3. Agreement Not to Engage in Same Business.. 4. Agreement for Erection of Building... 5. Agreement for Church Subscription... 6. Agreement for Agency and Commissions. 583 584 584 585 586 587 14. Agreement for Purchase of Realty on Installment Plan.. 594 21. Assignment of Patent Before Issuance of Letters.. 22. Assignment of Patent After Issuance of Letters. 23. Assignment of Wages Due and to Become Due.. 24. Bill of Lading... 26. Check 601 602 603 603 604 605 |