Herring v. . Sutton

COOK. J., dissenting. This is an action on a guardian bond given by B. F. Sutton, Jr., in the sum of $2,600 as guardian of his two minor children, J. H. Sutton and Annie L. Sutton, with Junius E. Sutton, Thomas Sutton and Flavius Allen as his sureties. The guardian is dead, and Mary F. Sutton is his executrix.

The case was referred to Mr. Ormond to find the facts, declare the law and report the same to the Court, which he did. Besides finding the amount due on said guardianship, he further found as follows: "That B. F. Sutton, deceased, had no insurance for any of his other children or widow, and at the time of taking out said insurance policy, in the name of his said wards, John Hardy Sutton and Annie Laura Sutton, it was his purpose, and he so declared it to be, to protect said wards and his bondsmen against any loss which might occur to the estate of said wards."

He also found: "That when the defendant Junius E. Sutton signed the guardian bond of said B. F. Sutton, Jr., he was influenced to do so by the promise of said B. F. Sutton to have his life insured for the protection of his wards and sureties."

The referee then declares as a matter of law that these facts did not constitute the said John H. and Annie L. Sutton trustees of the insurance policy, or the money collected thereon. The defendants excepted to the facts and the law as found and declared by the referee. But upon the hearing of the report before the Judge, the same in all things was confirmed, and judgment given for the plaintiff, from which defendants appealed.

Upon B. F. Sutton's taking out this policy of insurance, naming his two children, J. H. and Annie L. Sutton, the beneficiaries therein, it became theirs. They had a vested right of property therein, of which they could not be divested without their consent. Burton v. Farinholt, 86 N.C. 260;Bank of Washington v. Hume, 128 U.S. 195. This is so, unless they took and held it in trust as contended by defendants. And this contention seems to be settled against them by the case of Wood v. Cherry, 73 N.C. 110. We quote with approval the introduction of Chief Justice PEARSON'S opinion in that case as especially applicable to this case: "According to justice, using the word in its broadest sense, as distinguished from law or equity, the defendant ought not to be disturbed in her occupation of the premises during her lifetime or widowhood, and we have considered the case in every point of view to see if we could sustain the decision of his Honor in her favor. But we can find no ground on which to do so."

The Court then says: "The promise of Wood can not be enforced on the ground of its creating a trust, for the trust can only be created in one of four ways:

"1. By transmission of the legal estate, when a simple declaration will raise the use or trust.

"2. A contract, based upon valuable consideration to stand seized to the use or in trust for another.

"3. A covenant to stand seized to the use or in trust for another upongood consideration.

"4. When the Court, by its decree, converts a party into a trustee on the ground of fraud."

The allegation of the defendants in this case is that John H. Sutton and Annie L. Sutton are trustees of the $2,000 collected upon this policy of insurance out of the insurance company, for the benefit of the defendants. And if they are, it is because they fall within one of the four reasons stated above.

It can not be that they are trustees under the first ground, as there is no transmission of a legal estate. The policy of insurance is only a chose — a promise to pay the defendants $2,000 upon certain conditions and contingencies, which might be defeated by B. F. Sutton's not paying the premiums, and by the company's cancelling the policy.

It can not be under the second ground, as there is no contract on the part of John and Laura to stand seized to the use of the defendants.

It can not be under the third ground, as there is no covenant on the part of John and Annie to stand seized to the use of, or in trust for, the defendants.

It can not be under the fourth ground, as it is not alleged that there is any fraud in the transaction on the part of B. F. Sutton, John H. Sutton, or Annie L. Sutton.

It therefore seems plain to us that neither John H. nor Annie L. Sutton, nor their guardian, are trustees for the benefit of the defendant of the money collected from the insurance company, and the judgment below must be affirmed.

Affirmed.