Appeals, Nos. 258 and 259, March T., 1960, from decree of Orphans' Court of Westmoreland County, No. 255 of 1959, in re estate of Samuel Miller, deceased. Decree affirmed.
Henry E. Shaw, with him Scales and Shaw, for appellants.
Carroll Caruthers, for appellees.
Before Jones, C.j., Bell, Musmanno, Jones, Cohen, Bok and Eagen, JJ.
OPINION BY MR. JUSTICE COHEN.
These appeals are from the decree of the Orphans' Court of Westmoreland County. The facts in the case are not in dispute since the parties have filed an agreed statement.
On September 8, 1920, Samuel Miller obtained a policy of life insurance from the Northwestern Mutual Life Insurance Company and subsequently designated seven beneficiaries. On December 21, 1949, Samuel Miller was adjudicated a weak-minded person and the First National Bank in Greensburg was appointed guardian of his estate.
On September 8, 1950, the Court of Common Pleas of Westmoreland County decreed that the guardian, "... is hereby authorized to borrow the sum of Twenty-four Thousand ($24,000.00) Dollars, from the Union National Bank in Pittsburgh, Pennsylvania, and put up as collateral security the policy of insurance... issued... by The Northwestern Mutual Life Insurance Company...." An assignment of the policy was duly filed with the insurance company and the authorized loan was made to the guardian. Samuel Miller died testate on February 8, 1952. The insurance company paid $24,447.99 to the bank, that sum being the amount then due on the loan made by the guardian.
The several beneficiaries named in the insurance policy filed a claim with the estate for $24,447.99, claiming the estate was indebted to them for the proceeds of the insurance policy used to repay the bank loan. The lower court approved the claim and filed a schedule of distribution which provided for partial payment to the insurance beneficiaries by way of subrogation to the bank's claim. The award consumed the entire balance of the estate and no distribution was available for the appellants.
Exceptions were filed by the three appellants to the allowance of the claim of the insurance beneficiaries. These appeals have been taken from the decree dismissing the exceptions.
These appeals require us to answer - Are the beneficiaries of an insurance policy entitled to recover from the insured's estate, by way of subrogation, the proceeds of an insurance policy on the insured's life, which policy the guardian of the insured, a weakminded person, with court approval assigned to a bank as collateral for a loan for the benefit of the weak-minded person's ...