Nature of the Case
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Facts
Eugene Ryan, was a licensed mortician and president of Ryan Funeral Home, Inc. D was licensed as a mortician doing business in Arnold, Nebraska, as owner of the Quig-Tickle Funeral Home. In October 1971 they went into business together. In March 1972 Ryan and D were offered an opportunity to purchase the Mullen Funeral Home. They purchased the funeral home together for $20,000, as equal partners. They borrowed $7,000 for the downpayment and arranged to finance the balance over a period of 5 to 6 years. Ryan and D decided to purchase life insurance policies on each other's lives, their ultimate business goal being to acquire ownership of the Ryan and Mullen funeral homes and to provide a fund by which the survivor could purchase the homes upon the death of one of the partners. It was their estimate that if one died, the survivor would need $20,000 to $25,000 to purchase the other's interest in the Mullen Funeral Home and an additional $75,000 to purchase the outstanding stock of the Ryan Funeral Home from the owners thereof under the option agreement. They purchased decreasing term life insurance policies on their joint lives in the total amount of $100,000. D was designated the owner of one policy which had a face value of $50,000, and Ryan was designated the owner of a second policy, also valued at $50,000. Both policies insured the joint lives of Ryan and D so that the entire proceeds were payable to the survivor of them. The premiums for the insurance were paid by an automatic bank withdrawal arrangement through a partnership bank account maintained for the Mullen Funeral Home. Ryan had cancer and died on October 25, 1975. D collected a total of $88,000 as the beneficiary of the two life insurance On September 22, 1976, D and P entered into a settlement agreement in which D purchased the decedent's interest in the Mullen Funeral Home for the sum of $15,000. D agreed to pay an additional $3,000 to D in full and complete distribution of any sum of money claimed to be distributable to the decedent as undistributed earnings from the Mullen partnership. D also agreed to assume and pay the unpaid balance due on the Mullen Funeral Home in the amount of $9,000. He also purchased all the assets of the Ryan Funeral Home from the board of directors and shareholders of the corporation for the sum of $147,000. P instituted this action alleging that the estate was entitled to all insurance proceeds paid claiming that D did not have an insurable interest in the life of Eugene Ryan. D argued that the insurance contract was not a 'wagering' contract but, rather, was a valid and enforceable contract of insurance. The trial court dismissed P’s petition. P appealed.
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