principle which requires every man to be just before he is generous, or that the requisition of good faith towards his creditors, as imposed either by statute or by the principles of justice and morality, is violated by a gift from a father to his child, suitable to the condition of each, which is neither intended, nor upon any reasonable estimate can be expected, to operate to the injury or hindrance of any existing creditor, or of any contemplated liability. The indebted father has, however, no right to give away his property to the detriment of his creditors, though it be done for the apparent purpose of equalizing one or more of his children with others, who have been fairly advanced. If he do so, the gift is deemed fraudulent and void as to creditors, without any inquiry as to the actual intent, either of donor or donee. The claim even of a child upon his father, except for suitable present education and support while dependent upon him, cannot come in competition with that of the father's creditors. To prefer his children to the injury of his creditors is therefore a fraud upon the creditors; and the donees, being mere volunteers, cannot rely upon their own ignorance or innocence in the reception of the gift, but are absolutely implicated in the fraud of the donor, whether it be intentional, or implied by law, from the nature and consequences of his act." In that case, $300 had in fact been paid in cash; whereas, here nothing was paid, but the consideration was rested upon what amounted, at most, to a moral obligation on the part of James E. Creel to pay to his children money which he received from their mother which he was under no legal obligation to pay. Judgment affirmed. LOGAN et al. v. GILBERT, Judge, et al. (Court of Appeals of Kentucky. Jan. 22, 1913.) 1. COUNTIES (§ 151*)-INDEBTEDNESS SUBMISSION TO VOTERS. an for that year, without the assent of two-thirds of the voters thereof voting at an election to be to the issuance of bonds for the erection and held for that purpose. Ky. St. § 1880, relative repair of public buildings, provides that the fiscal court, shall, by order entered of record, suggest an appropriation and order an election to be held, at which the appropriation suggested by the court shall be submitted to the legal voters of the county for their approval or rejection. Held, that the submission to the they were in favor of an appropriation of $75.voters of a county of the question whether 000 for building a new courthouse was sufficient to authorize the issuance of bonds by the county, although it did not directly submit the question whether an indebtedness should be created, since the question complied literally with the statute; and it would be assumed that the voters knew they did not have on hand derstood that they were, in fact, voting to crein the treasury the amount required, and unate a new indebtedness. [Ed. Note. For other cases, see Counties, Cent. Dig. §§ 166, 218; Dec. Dig. § 151.*] Appeal from Circuit Court, Shelby County. Action by Walter Logan and others against Ralph Gilbert, Judge, and others. Judgment for defendants on demurrer to the answer, and plaintiffs appeal. Affirmed. 'P. J. Beard, of Shelbyville, for appellants. George L. Pickett, of Shelbyville, for appellees. TURNER, J. Appellants, taxpayers and citizens of Shelby county, instituted this action against appellees, who are members of the fiscal court of that county, and the county clerk thereof, alleging that the defendants were threatening to issue bonds of Shelby county to the amount of $75,000, and would do so, unless restrained or enjoined, and that the indebtedness about to be created by them and the interest thereon would exceed the income and revenue for said county for the year 1912, and pray that they be enjoined from issuing said bonds. By their answer the defendants allege that it is true they are about to issue the bonds as set forth in the petition, and that said indebtedness and its interest would exceed the revenue provided for the said county for the year 1912. They further allege: That at the regular term of the Shelby county fiscal court, held on March 13, 1912, said court entered an order that it was necessary for the public convenience and the preservation Under Const. § 157, providing that no county, etc., shall become indebted to amount exceeding, in any year, the income and revenue provided for such year, without the assent of two-thirds of the voters thereof voting at an election to be held for that purpose, it is only necessary that two-thirds of the public records that a new courthouse of the electors voting on the question of contracting such indebtedness shall assent thereto; and it is not necessary that two-thirds of the whole number of voters of the county, or two-thirds of those voting at the election on other questions, should vote in favor of contracting the indebtedness. be built in Shelbyville, Shelby county, Ky., and suggesting an appropriation of $75,000 for that purpose, and ordering an election to be held to take the sense of the voters on that question at the next regular election in November, 1912; and directing the sheriff of that county to advertise said election and the object thereof for at least 30 days next before the date thereof in three newspapers in Const. § 157, provides that no county, etc., lished in said three newspapers for at least that county, and that said notice was pubshall become indebted to an amount exceeding, in any year, the income and revenue provided 30 days preceding the election, said news*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes [Ed. Note. For other cases, see Counties, Cent. Dig. §§ 166, 218; Dec. Dig. § 151.*] 2. COUNTIES (§ 151*)-PROCEEDINGS PRELIMINARY TO ISSUE OF BONDS-SUBMISSION TO VOTERS. papers having the largest circulation in that | Fiscal Court v. Trimble, 104 Ky. 629, 47 S. county, the notice thereof being signed by W. 773, 20 Ky. Law Rep. 827, 42 L. R. A. the sheriff, and that said election in accord- 738, that it was sufficient, under the provisions of that section, if more than two-thirds of the electors voting on the question submitted voted for it, and that it was not necessary that two-thirds of the whole number of voters of the county, or even two-thirds of those voting at that election on other questions, should vote affirmatively; and that opinion has been followed since in the case of the Board of Education v. City of Winchester, 120 Ky. 591, 87 S. W. 768, 27 Ky. Law Rep. 994. [2] 2. Section 157 of the Constitution provides, among other things: "No county, city, town, taxing district, or other municipality shall be authorized or permitted to become indebted, in any manner or for any purpose, to an amount exceeding, in any year, the income and revenue provided for such year, without the assent of two-thirds of the voters thereof, voting at an election to be held for that purpose; and any indebtedness contracted in violation of this section shall be void." Section 1880 of the Kentucky Statutes, which is a part of the chapter providing for the issual of bonds for the erection and repair of public buildings, and providing the manner in which such questions may be submitted, is in part as follows, to wit: "That before the bonds authorized by the first section hereof shall issue, said court shall, by order entered of record, suggest an appro al election to be held in the county which does not occur within less than sixty days after the above orders are made, at which court, as directed above, shall be submitted election the appropriation suggested by the to the legal voters of the county for their We have not been favored with any ex-priation, and designate specifically the obtended brief by either side, the parties hav-ject, purpose and amount thereof, and shall ing contented themselves by filing a joint also order an election to be held, and direct statement, signed by the attorneys of each a poll to be opened at the several precincts side, to the effect that they had endeavored in the county on the day of the next generto meet in these proceedings all requirements of the law so as to make the bond issue valid; but we have carefully examined all the provisions of the statutes, as well as the constitutional provisions, and find that they have all been sufficiently complied with. The only two questions which could possibly be made are: First. Was the necessary number of votes received to carry the proposition by a two-thirds vote, as is required by section 157 of the Constitution? Second. Was the question submitted to the voters in such form as to meet the constitutional require ments? [1] 1. It is alleged in the answer of the defendants that more than two-thirds of the electors voting on the subject of an appropriation for the building of a new courthouse voted in favor thereof; but it is not alleged that two-thirds of the electors of the county voted in favor thereof, or that more than two-thirds of all the voters who voted at that election voted in favor thereof. But whether this is a sufficient compliance with the provisions of section 157 is no longer an open question in this state, it having been held by this court, in Montgomery County approval or rejection." The question might well be raised that the form in which the submission to the voters was had in this case was not a sufficient compliance with the constitutional provision, as it merely submitted to them whether they should make an appropriation, and in no way suggested the creating of a new indebtedness. But as there has been a literal compliance with the provisions of the statutes, and as we must assume that the voters of Shelby county knew that they had not on hand in their treasury as much as $75,000 to be used for the erection of a courthouse, and therefore understood that they were in fact voting to create a new indebtedness, the submission in the form here presented will be treated as sufficient, especially in view of the opinion of this court in the case of Whaley, etc., v. Commonwealth, 110 Ky. 154, 61 S. W. 35, 23 Ky. Law Rep. 1292. That was a case in which the voters of Nicholas county held issued shall become void for nonpayment of Ky. St. § 659, provides that no life policy premiums after three full annual premiums have been paid, but, upon default, the policy shall be binding upon the company for the amount of paid-up insurance which the net value of the policy with all dividend additions will purchase as a net single premium. The policy which was a "deferred dividend" policy, the dividends being payable only at the end of fifteen years, provided that, upon nonpayment of premiums, insurance for the net amount that would have been payable as a death claim automatically continue as term insurance for on the date to which premiums were paid shall such time as any excess of the reserve held by the company over any indebtedness to it will purchase at insured's then age. Held, that a deferred dividend payable under the policy only at the end of the fifteen years could not be used for continuing the policy after default in premi an election under the provisions of the "Free | 3. INSURANCE (§ 367*) — PREMIUMS - INSURED'S RIGHTS ON DEFAULT. Turnpike Act." The question was raised in that case as to the form in which the question was submitted, and the court said: "If the proposition submitted to the voter and printed on the ballot had been, 'Are you in favor of free turnpikes, and of incurring for the county such debt as may be legally necessary to pay for the turnpikes now owned and operated in the county by private owners? and if the majority voting in the affirmative had been as shown by this record, no one would have questioned that the result was a fulfillment of the constitutional requirement. The question submitted, 'Are you in favor of free turnpikes and gravel roads? involved fairly and fully the question of necessary indebtedness to pay for them. No other means were possibly available, save the creation of a present indebtedness to be met by future taxation. The court must indulge the presumption that the voters of Nicholas county both knew and intended the construction herein given the proposition. To deny it is to question, in the first place, their common understanding, as not knowing the necessary and legal results of their action; and, in the next place, it would be to question their honesty or fair purpose to pay for the roads they were voting to acquire, and which by their votes they were authorizing and directing their fiscal representatives to acquire for their use and in their name." But we are constrained to say that in the submission of such questions it would be a much plainer and more satisfactory compliance with the constitutional provision if submitted in such form as to indicate more clearly to the voters that they were voting upon a question of creating a new indebted ness. Judgment affirmed. ums. [Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 935, 938; Dec. Dig. § 367.*1 4. INSURANCE (8367*) - LIFE INSURANCE — "NET VALUE"-"RESERVE." The "net value" of a policy as provided in Ky. St. § 653, is equivalent to "reserve," and means that part of the annual premium paid by insured which, according to the American Experience Table of Mortality, must be set apart to meet or mature the company's obligations to insured, the net value of a policy on a given date being its actual value, its reserve. [Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 935, 938; Dec. Dig. § 367.* For other definitions, see Words and Phrases, vol. 5, pp. 4782-4783; vol. 7, pp. 6146, 6147.Í 5. INSURANCE (8 368*) - DIVIDENDS—“DIVIDEND ADDITION." thing added to the policy in the form of paidup insurance, and does not mean unapportioned assets or surplus. The term "dividend addition" means some [Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 194, 936, 939; Dec. Dig. § 368.*Í 6. INSURANCE (§ 146*)-CONSTRUCTION-POLI CIES. If the provisions of a life policy are complicated or involved, so as to make them susceptible of two constructions, that construction most favorable to insured is adopted, but, if free from ambiguity, the contract must be enforced as written. [Ed. Note. For other cases, see Insurance, JEFFERSON et al. v. NEW YORK LIFE Cent. Dig. §§ 292, 294-298; Dec. Dig. § 146.*] INS. CO. Nunn, J., dissenting. Appeal from Circuit Court, Fayette County. Action by Lizzie Jefferson and others against the New York Life Insurance Company. From a judgment for defendant, plaintiffs appeal. Affirmed. Forman & Forman, of Lexington, for appellants. W. Marshall Bullitt, of Louisville, James H. McIntosh, of New York City, Alex. G. Barrett, and Bruce & Bullitt, all of Louisville, for appellee. LASSING, J. On December 19, 1902, the New York Life Insurance Company issued a policy of insurance for $2,500 on the life of Thomas C. Jefferson, payable to his wife and children. It was an ordinary life, 15 year accumulation or deferred dividend, pol *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes icy. The annual premium was $132.28. The premiums for the years 1902, 1903, 1904, 1905, and 1906 were paid. On March 19, 1907, the insured borrowed from the company $312 executing his note therefor due December 19, 1907. The interest on this loan was paid in advance. The premium, falling due December 19, 1907, was not paid. The policy contains the following provisions, relative to the nonpayment of premiums or interest: "If any premium or interest is not paid on the date when due, and if there is an indebtedness to the company, insurance for the net amount that would have been payable as a death claim on the date to which premiums were paid, will automatically continue from such date as term insurance for such time as any excess of the reserve held by the company under this policy over such indebtedness will purchase at the then age of the insured according to the company's present published table of single premiums for term insurance, and no longer." On December 19, 1907, as admitted by the company, the net reserve on the policy was $329.55. It deducts the debt of $312 from this net reserve of $329.55, which leaves a balance of $17.55 due the insured and applicable, under the terms of the policy, to the purchase of extended insurance, at a single premium rate, in the sum of $2,500. This sum of $17.55, at the company's single premium rate, would serve to keep alive insurance in the amount of $2,500 to March 19, 1908, and no longer. The company pleads that it fully complied with its contract; and that, on and after March 19, 1908, the rights of the insured, under the policy, ceased. The insured died on October 19, 1908. The beneficiaries, under the policy, his wife and children, brought this action to recover the amount of the insurance. Their positica is that when the premium was not paid on December 19, 1907, the policy should have been extended, not merely for the length of time that the net reserve of $329.55 less the debt of $312, or a balance of $17.55 would have carried it, at a single premium rate, but that there should have been added to this net reserve on the policy its proper share of dividend earnings, and this, as well, should have been applied to the purchase of extended insurance. It is conceded that $56 of such additions, if allowed, would have kept the policy alive up to the date of the insured's death. The bene ficiary endeavored to show that the dividends accumulated upon the policy but not apportioned to it were more than this sum. It is shown by the testimony of Mr. Hunter, the actuary of the company, that the dividends paid upon the policies for $2,500, like in age and all respects to that carried by the insured in this case, save that they call for annual, instead of deferred, dividends, were in 1903, $10.57, in 1904, $11.20, and in 1905, $12.35. The amount of dividends on such policies was not fixed by this witness for either of the years 1906 or 1907. C. B. Bul lock, an actuary connected with the insurance department of the state, testifies that upon like basis the dividends upon such a policy would have been for 1906 $13.40 and for 1907 $14.87. The total of these sums is $62.39, or $6.39 in excess of the sum which the company admits would have carried the extended insurance to a point beyond the death of the insured. Under the provisions of the contract, the insured was not entitled to have any dividend earnings applied toward the purchase of extended insurance, but only that portion of the reserve which remained after his indebtedness to the company was deducted. But it is insisted that the contract of insurance is a New York contract, and is therefore controlled and regulated by the statutes in the state of New York; and such statutes must be read in connection with the policy, and, when so read, the dividend additions are to be regarded or treated as a part of the reserve. The company denies that the contract is a New York contract, and insists that the New York statute, not being made a part of the contract of insurance or incorporated in it, has no application. It therefore becomes necessary, first, to determine whether the contract of insurance in suit is, in fact, a Kentucky or a New York contract. It is averred by the company in its answer that the insured at the time he applied for this insurance lived in Kentucky. The agent who solic1ted it likewise lived in Kentucky. The application was made, the policy delivered, and all the premiums were paid in Kentucky. It is insisted that, all of these facts concurring, the policy must be considered a Kentucky contract. The representatives of the insured insist that it is a New York contract, first, because Jefferson paid the initial premium at the time he made the application on December 19, 1902, and that this application was accepted in New York and the policy issued there and forwarded to the agent in Kentucky for delivery, and there was limitation, restriction, or condition, coupled with its delivery to the agent by the company, and that this therefore, makes it a New York and not a Kentucky contract. Upon these two points counsel for the respective parties do not agree. It is insisted by counsel for the company that the evidence does not support the contention of appellants on either proposition. The chancellor upon consideration of the pleadings and proof was of opinion that the fund, applicable to the purchase of extended insurance at the date of the nonpayment of the premium, to wit, December, 1907, was not sufficient to keep the policy in force as extended insurance until the date of the death of the insured, and that the policy prior to said date had become ineffectual and void and dismissed the petition. The plaintiffs appeal. no [1] A determination of the question as to whether the contract is a Kentucky or a New York contract becomes of primary im portance. The position taken for appellants ny, in which he says that on December 26, as to the time of the payment of the initial 1902, the policy was forwarded to the compremium and the instructions and directions, pany's agent in Lexington for unconditional which were given to the local agent at the delivery to the insured, but in a later depotime the policy was forwarded to him for sition this statement is explained as follows: delivery, must both be borne out by the evi- "I should have spoken more accurately if dence, or else the contention that it is a New I said the policy was forwarded without any York, and not a Kentucky, contract must special restrictions to the cashier about its fail. As to the payment of the premium, delivery, other than the standing instructions the only evidence upon this point is that of of the company, for this is what I meant." the witness, T. V. Forman, the soliciting He then explains the standing instructions to agent for the company. He testifies that up-be these: "A policy must, under no circumon the date that he took this application stances, be delivered, unless the premium has he took a note of the insured payable to been paid to the agent. This rule must be himself for the amount of the premium, due rigidly adhered to in all cases; and agents at 60 days, without interest. He also testi- are not authorized to accept premium notes, fies that he had no authority to accept a or anything except cash in payment of the note on behalf of the company, or to deliver whole, or any part, of the premium. The a policy except for cash, and that the tak- agent must not accept the premium and deing of the note was a purely personal trans- liver the policy, if any material change has action between himself and the insured. taken place in the applicant's health since That the note was not taken for the compa- he was examined." ny is made clear by his cross-examination, which is as follows: "Q. 95. That was purely a matter between you as an individual and Mr. Jefferson-the company had nothing to do with that? A. That is so. Q. 96. That was just a private, personal arrangement between you and Jefferson, and the company had absolutely nothing to do with that delivery, did it? A. I think that I would have shown that note to the branch office to see if it was satisfactory, or confer with the cashier or agency director in regard to taking the note. Q. 97. Didn't you say a little while ago that the company would not accept a note, and that you had to furnish the cash to them? A. I said I conferred possibly with Tucker and the agency director as to the advisability of accepting the note. Q. 98. That was from your standpoint, and not from the company's? A. Yes. Q. 99. You mean that you possibly conferred with them whether you could afford to credit Mr. Jefferson with that amount of money? A. That is correct. Q. 100. I say, therefore, the arrangement of taking this note was a purely personal matter between you and Mr. Jefferson? A. I would say it was." Not only does this evidence show that in taking the note of the assured when the application was made the agent was acting in his individual capacity, but the record further discloses the fact that this note was never delivered to the company, or offered to be delivered to it by the agent, but, on the contrary, the agent paid to the company the premium on this policy immediately after the policy was delivered by him, and made no mention of the note. The evidence entirely fails to support the contention of appellants' counsel that the premium was paid when the application for the insurance was made. The claim that the application was accepted in New York and the policy issued and forwarded to the agent in Kentucky for delivery without conditions is rested upon the statement of Mr. McCall, witness for the compa [2] When his first statement is read in connection with his amplified statement, it is the home office to the agent at Lexington, apparent that the policy was forwarded by under the rules and regulations governing them in the conduct of their business, and these rules required, as stated, that the agent was to deliver the policy only under specithe question as to whether or not the policy should be delivered by the local agent could be determined only when the attempted de fied conditions, and not otherwise. So that livery was made. If there was then no material change in the health of the applicant, and the requirements of the company as to the payment of the first premium complied with, he was authorized to deliver the policy, and not otherwise. Under these circumstances, the policy was not forwarded by the home office to the local agent to be delivered by him without conditions or limitation. It was a Kentucky contract; and the New York statutes, having no extraterritorial force or effect, cannot be considered in determining appellants' rights. These rights must be determined by the contract of insurance as expressed in the policy when read in the light of the Kentucky statutes. If the settlement or contract arrangement for settlement, provided for in the policy, is less favorable to the insured than the Kentucky statute provides it should be, then the contract must be so modified as that the company will be required to settle upon terms as favorable as the statute provides the contract shall be made. The only Kentucky statute bearing upon the rights of an insured, when he has ceased to pay his premiums, is section 659, which provides as follows: "All policies hitherto issued by any domes. tic life insurance company shall be subject to the provisions of law applicable and in force at the date of such issue. "Subdivision 2. No policy of life or endowment insurance upon the ordinary plan |