The effect of the statute (section 8445 of the Code) is construed to mean that the insured cannot by contract create a vested right to any extent in a beneficiary of a policy within the operation thereof, and exempts such contracts from the rule permitting an assignment thereof, referred to in the case of McDonald v. McDonald, supra; Slaughter v. Grand Lodge, 192 Ala. 301,68 So. 367. When the policy was procured, it was with the presumed knowledge of the statute. Parker v. Mosaic Templars,212 Ala. 471, 103 So. 65; Mosaic Templars v. Raife, 215 Ala. 159,110 So. 67; Baldwin v. Begley, 185 Ill. 180, 56 N.E. 1065.
As pointed out above, if appellant has no vested right in the policy, she has nothing in it out of which she could be defrauded. In addition to the citations above, the following may be noted as directly in point: Alfsen v. Crouch, 115 Tenn. 352,89 S.W. 329; Brown v. Grand Lodge, 80 Iowa, 287,45 N.W. 884, 20 Am. St. Rep. 420.
It is insisted that complainant has an equitable lien in the nature of a trust, because her money was wrongfully obtained with which the premiums were paid, citing Cooley's Briefs on Ins. vol. 7, p. 6492 (Ed. 1928). The authorities cited there apply when trust funds are used by the insured to pay the premiums. It is upon the principle "which allows a cestui que trust to follow trust funds, and to appropriate to himself the property into which such funds have been changed," as where a partner wrongfully abstracts partnership funds, with which he pays premiums on a policy payable to his wife, Holmes v. Gilman, 138 N.Y. 369, 34 N.E. 205, 20 L.R.A. 566, 34 Am. St. Rep. 463; Dayton v. Claflin, 19 App. Div. 120,45 N.Y. S. 1005; or where "the premiums were paid from funds stolen or embezzled," Truelsch v. N.W. Mutual Life Ins. Co.,186 Wis. 239, 202 N.W. 352, 38 A.L.R. 914; Vorlander v. Keyes (C. C. A.) 1 F.(2d) 67; Mass. Bonding Ins. Co. v. Josselyn,224 Mich. 159, 194 N.W. 548; Anno. page 930, 38 A.L.R. There is no reason why this principle may not be extended to an instance where a person by fraudulent concealment is induced to pay out *Page 424 money on a mistaken assumption of an interest in the policy. By such concealment, a trust ex maleficio, constructive in nature, is created to the extent of the funds so paid. The effect of the transaction is that the insured obtained the funds of appellant by fraud, and they were used in paying the premiums on the policy sued on, thereby tracing such trust funds into said property. Royal Arcanum v. McKnight, 238 Ill. 349,87 N.E. 299; Allen v. Cunningham, 143 Tenn. 11, 223 S.W. 450.
In the case of Kent v. Dean, 128 Ala. 600, 30 So. 543, this court quotes from 2 Pom. Eq. §§ 1053, 1055, as follows:
"Whenever the legal title to property, real or personal, has been obtained through actual fraud, misrepresentation, concealments [or etc.], or through any other similar means or under any other similar circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same; * * * and a court of equity has jurisdiction to reach the property * * * until a purchaser of it in good faith and without notice acquires a higher right." Fields v. Fields, 211 Ala. 649, 101 So. 588; Deming v. Lee, 174 Ala. 410, 56 So. 921; Browning v. Kelly,124 Ala. 645, 27 So. 391; Parker v. Jones, 67 Ala. 234; 39 Cyc. 528; 26 R. C. L. 1348; 2 Beach on Trusts, 1624.
It will be impressed upon property in the hands of a married woman, though she is under certain disabilities. Manning v. Pippen, 86 Ala. 357, 5 So. 572, 11 Am. St. Rep. 46. As soon as the property is acquired by a bona fide purchaser, it then ceases as such property and attaches to the proceeds received from such purchaser. 2 Beach on Trusts, 1625.
To create a constructive trust, "actual fraud is not necessary; but such a trust will arise whenever the circumstances under which property was acquired make it inequitable that it should be retained by him who holds the legal title." 39 Cyc. 169.
"One who acquires land or other property by fraud, misrepresentation, concealment, or under any other circumstances as render it inequitable for him to retain it, is, in equity, regarded as the trustee of the party who suffers by reason of the fraud or other wrong and who is equitably entitled to the property." 39 Cyc. 172.
It is well settled that the payment of the premiums by appellant does not without fraud impress upon the policy any right to reimbursement when she has presumed knowledge of the right to change the beneficiary. 45 C. J. 258; Spengler v. Spengler, 65 N.J. Eq. 176, 55 A. 285; Supreme Lodge v. Hine,82 Conn. 315, 73 A. 791.
The bill may not be sufficient in its averment of fraud; but there was no ground of demurrer for such insufficiency. While the court will not consider the bill as amended to the extent of adding new matter in the nature of independent facts essential to be averred, it will, for the purpose of determining its equity, view the bill as if the matters stated were properly pleaded. Slaughter v. Grand Lodge, supra. While fraud is not sufficiently alleged, there is an allegation of fraud, and a general demurrer for want of equity should not be sustained, but to reach that defect the demurrer must specifically point it out. Seeberg v. Norville, 204 Ala. 20,85 So. 505; McDuffie v. Lynchburg, 178 Ala. 271, 59 So. 567; Shannon v. Long, 180 Ala. 128, 60 So. 273; Whitman v. Taber,203 Ala. 496, 83 So. 595.
We hold, therefore, that the demurrer should not have been sustained, and that the bill has equity for the purpose of tracing appellant's funds alleged to have been fraudulently obtained, consisting of the payments of the premiums and interest from date of each payment, and of impressing upon the proceeds of the policy a trust to the extent of such funds so obtained with the interest thereon.
Application for rehearing granted, and the cause reversed and remanded.
ANDERSON, C. J., and THOMAS and BROWN, JJ., concur.