Scott v. Miller

STATEMENT BY THE COURT.

This suit was brought to impress the fund realized from an insurance policy with a trust in favor of appellant.

Nancy Katherine Scott, appellant's mother, was twice married, C. I. Miller, the beneficiary in the policy of insurance, being her only child by her first marriage, and appellant, Leona Joe, or Lillian Scott, Floyd Scott, now deceased, and Myrtle King, children of her second marriage, appellant being the youngest child. The mother first took out a benefit certificate in the Woodmen Circle on June 11, 1908, in which all her children and the husband, J. A. Scott, were named beneficiaries. On April 18, 1911, she changed the beneficiary in the certificate, naming only C. I. Miller, her eldest child and son, as beneficiary. She died on November 9, 1923, and the money, $1,100, was paid to the beneficiary, C. I. Miller, subsequent to February 14, 1924. C. I. Miller deposited this fund in a separate bank, the First National Bank of Newport, from the one in which he and his wife deposited their wages in a general checking account. He was a freight conductor on the Missouri Pacific Railroad, and died from injuries received while in his employment on June 15, 1924. He had made several other deposits after he put the insurance money in the bank, amounting to about $450, and had checked out none of his deposits in this bank.

The testimony on the part of the appellant tended to show that Miller, the beneficiary named in the policy on the life of his mother, agreed with her to keep up the dues or assessments and to turn the money over, upon her death, to appellant, his half-sister and the insured's youngest child, who is frail and sickly, afflicted with tuberculosis at this time. One of the sisters testified positively to this agreement and understanding.

The testimony in behalf of appellee was to the effect that the dues had been increased on the insurance, and the insured was not long able to keep them up, and agreed with her son to name him beneficiary if he would keep up the dues and take care of her during her life, and pay her funeral expenses. Miller took appellant into his home at Newport, after the death of his mother, and as a member of the family, paying for her clothing and living expenses.

Appellee, administratrix, who married Miller after he was named beneficiary in the certificate, withdrew the money deposited by him in the First National Bank and deposited it in her account in the Farmers' National Bank, where a general checking account of herself and husband had been kept. She also settled the claim for damages for the injury to her husband, resulting in his death, with the railroad company, on December 8, 1924, for $4,000, $3,000 of which was for the benefit of the widow and next of kin and $1,000 for the benefit of the estate. There were some of her letters introduced, indicating that she was expecting to pay some of the money realized from the railroad company to appellant, that appellant should have some benefit of it.

The chancellor dismissed appellant's complaint for want of equity, and the appeal is prosecuted from the decree. Appellant insists that the chancellor erred in not holding that the fund could be impressed with a trust, and that the testimony warranted a decree in her favor.

It appears to be well settled law, in the absence of statutes providing otherwise, that a trust in personal property may be declared, created, or admitted verbally, and proved by parol testimony. It is said in R.C.L.:

"In some jurisdictions an express trust cannot be created by parol, even as to personal property, but the great weight of authority is to the effect that the statute of frauds does not extend to trusts of personal property, and that such trusts may be created and proved by parol. In accordance with this rule it has been uniformly held that an oral promise by a beneficiary in a life insurance contract to pay the proceeds of such policy or a portion thereof to a third person is a valid and enforceable trust." 26 R.C.L., p. 1194. See also 3 Pomeroy's Equity (4th ed.) 1008, 1009, pp. 2232-39; Chew v. Brumagen, 13 Wall. 497, 20 U.S. (L.Ed.) 663; Hirsh v. Auer, 146 N.Y. 13,40 N.E. 397, 398; Catland v. Hoyt, 78 N.E. 55, 5 A. 775. The rule of evidence for the establishment of such a trust, however, is different from the general preponderance rule insisted upon by appellant, clear, convincing and satisfactory evidence being required. 3 Pomeroy Equity, supra.

It is stated in R.C.L. that the same degree of proof should be required — clear, convincing and satisfactory evidence — to prove such an express trust as to establish a resulting trust. 26 R.C.L., pp. 1203, 1231, 44, 77; see also Colegrave v. Colegrave, 89 Ark. 182,116 S.W. 190, 131 Am. St. Rep. 82; Bray v. Timms, 162 Ark. 247,258 S.W. 338; Scoggin v. Scoggin, 176 Ark. 1009, 4 S.W.2d 953.

The majority of the court is of opinion — in which the writer does not agree — that the proof of appellant is not sufficient to meet the requirements of the rule or establish the trust, and the case must be accordingly affirmed. It is so ordered.