Corder v. McDougall

WASTE, C. J.

Appeal on judgment-roll alone from judgment for defendant in an action brought to determine whether the personal representative of a deceased life tenant had exclusive right to the proceeds of a $2,000 fire insurance policy taken out by the life tenant and the insurance thereafter paid to him and deposited in bank with his other funds. The appellant remainderman opposed the claim of the personal representative, and brings this appeal.

The deceased was the life tenant of a small piece of property and improvements. The appellant remainderman is the owner of the fee, subject and subordinate to the life estate of the deceased. The deceased insured the dwelling and improvements and paid the premiums. The insured property was destroyed by fire, and the amount of the policy was paid to the deceased and deposited by him in a bank. The identity of the insurance money was not lost, and, as so

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identified, passed into his estate. The appellant remainder-man demanded of the personal representative the payment of all moneys paid to the deceased by the insurance company, contending that the insurance fund was substituted for the destroyed property, and, after the death of the life tenant, was payable to the remainderman, inasmuch as the status of the two estates had not been changed by the conversion, and that the life tenant was a trustee for the remainderman.

While the exact question presented is novel in California, respondent’s position that the life tenant had the exclusive right to the benefit of insurance taken out by him, and that there had been no transmutation of the destroyed buildings into money as a substitute, must be sustained. There are facts in

Thompson

v.

Gearheart,

137 Va. 427 [35 A. L. R. 36, 119 S. E. 67, 68], sufficiently analogous to those here under review to render the decision in that case an authority here. The court said: “The life tenant was under no obligation to insure the property for the benefit of the remaindermen. Each of them had an insurable interest in the property, but a policy in the name of one could not cover the interest of the other. The nature and effect of an insurance contract is to indemnify the