Amy Jo Stone, et al., v. Regions Bank

This is a dispute over life insurance proceeds. Plaintiffs' mother was indebted to defendant-bank and entered into a contract with the bank and the plaintiffs to secure past and future indebtedness by assignment of a life insurance policy on her life. The policy was duly assigned pursuant to the contract with the bank. Subsequently, plaintiffs' mother filed a bankruptcy proceeding, and her liability to the bank on her indebtedness was discharged, but the insurance policy was not affected. The bank continued paying the annual premiums on the policy, and several years after the bankruptcy proceeding, the plaintiffs' mother died. The insurance company, by virtue of the assignment of the policy, paid the insurance proceeds to the bank which then satisfied its indebtedness and paid the balance of the proceeds to the plaintiffs pursuant to the contract. Plaintiffs sue to recover the full amount of the insurance proceeds, contending that there was no existing indebtedness as specified in the contract. The trial court entered judgment for bank, and plaintiffs have appealed. We affirm.