54 So. 254 | Miss. | 1910
Lead Opinion
delivered the opinion of the court.
By section 2141, Code of 1906, it is provided that: “The proceeds of a life insurance policy not exceeding three thousand dollars, payable to the executor, or administrator of the insured, shall inure to the heirs or legatees, freed from all liability for the debts of the decedent, except premiums paid on the policy by any one other than the insured and debts due for expenses of last illness and for burial,” etc. The policy in controversy in this case is for three thousand dollars. The policy was made payable to the executor or administrator in the very language of the above statute, and while it was a current policy, having only a cash surrender value, or after it matured by reason of the death of the insured, it was never in any way liable for the debts of S. K. Barton. The object of this .statute is to secure to the insured a policy, not to exceed three thousand dollars, from liability to any creditor for any debt. This statute exempts the whole proceeds, or any part of it, whether the value accrues during the life or after the death of the insured. The cash surrender value of the policy is just as-much “proceeds” of the policy, within the meaning of the statute, as would be the full amount after the death of the insured. In other words, when the person insured dies, the proceeds of the policy are exempt; while he lives, if the policy acquires a cash surrender value, this cash surrender value is “proceeds” within the meaning of the statute, and exempt so long as the value in either case does not exceed three thousand dollars. Any other construction of the statute would impair, if it did not destroy in some cases, the object of the statute.
The federal bankrupt law makes no attempt to interfere with the exemption laws of any state, and both by the statutes and decisions of this state a liberal interpretation has always been given to exemption laws. See Bank v. O’Neal, 86 Miss. 45, at page 52, 38 South. 630. This has been the uniform holding of this and all courts upon this subject. The insured had the right to assert the exemption at any time before he actually allowed the value of it to be paid to his creditors, and although he listed it with the bankrupt estate as an asset, and died before asserting the exemption allowed by section 2141 of the Code of 1906, his legal representative had the same right to assert the exemption and effectuate the
Section 70a of the bankrupt law expressly provides that: “The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt,” etc. Act July 1, 1898, c. 541, 30 Stat. 565 (U. S. Comp. St. 1901, p. 3451). The trustee in bankruptcy gets no such title to the exempt property of the bankrupt as to make it indefeasible by the bankrupt, or his legal representative,' until such exempt property has been actually allowed to be distributed to the creditors. That part of section 70a which provides “that when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his' estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and surrendered to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and-continue to hold, own, and carry such policy, free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings,” was held in the case of Holden v. Stratton, 198 U. S. 202, 25 Sup. Ct. 656, 49 L. Ed. 1018, to have no application to insurance policies which were exempt under any statute of a state. In the above case the court held that the cash surrender value of an exempt policy was not liable to be taken by the creditors.
In the case of Holden v. Stratton, supra, the court says: “As section 70a deals only with property which, not being exempt, passes to the trustee, the mission of the proviso was, in the interest of the perpetuation of policies of life insurance, to provide a rule by which,
jReversed and judgment here as above.
Dissenting Opinion
(dissenting).
I dissent from the majority opinion. It is there held that “the above statute (section 2141, Code of 1906) is to secure to the insured a policy, not to exceed three thousand dollars, from liability to any creditor for any debt. This statute exempts the whole proceeds, or any part of it, whether the value accrues during the life or after the death of the insured.” My judgment is there is nothing whatever in the statute indicating a purpose to exempt to the insured, during his life, the proceeds of the policy. On the other hand, its object (plainly expressed, as it appears to me) is to exempt such proceeds alone to the heirs and legatees of the decedent, as against his debts. During the lifetime of the insured the value of this policy was liable to his debts, and therefore by operation of the bankrupt law the title vested in the trustee in bankruptcy for the benefit of his creditors, and, the title having so vested, the proceeds after his death belonged to the trustee. In other words, the insured did not own the policy at his death, and his heirs now have no interest in it.