Felrath v. Schonfield, 76 Ala. 199

Felrath v. Schonfield

76 Ala. 199 | Ala. | 1884

SOMERYILLE, J.

— The bill is filed by the appellant, Felratli, as a creditor of one Yogel, to reach the proceeds of certain policies of insurance taken out by him on his own life, and payable to his wife as beneficiary. The theory of the suit is, that the investment by the deceased husband was a fraud on the appellant and other creditors.

The main inquiry, upon which the case depends, is, as to whether these policies can be properly construed to come within the influence of section 2733 of the present Code. This section declares, that “ any married woman, by herself and in her name, or in the name of any third person with his assent as her trustee, may cause to be insured, for her sole use, the life of her husband ; ” and that the proceeds of the policy, or policies, shall be payable to her, if she survives him, to her own use, free from the claims of creditors of the husband. The amount of premiums allowed to be invested in this manner, however, from the moneys of the husband, is not permitted to exceed the sum of five hundred dollars annually.

The facts, as admitted, show that the policies were obtained at the instauce of the husband, and that the wife had no agency in procuring them ; and it is insisted that, for this reason, they do not come within the statute. This construction of the statute is, in, our opinion, entirely too narrow and rigid. The policy of such legislation finds its origin in the duty of maintenance and protection which every husband owes to his family, and the importance to the State that as few widows and orphans as possible should be cast as paupers upon the public charity. Continental Life Lns. Co. v. Webb, 54 Ala. 688; Stone v. Knickerbocker Life Ins. Co., 52 Ala. 589. In Fearn v. Ward, 65 Ala. 33, we said, that this statute was “ in the nature of a law' exempting property from liability to execution.” It has been uniformly held in this State, that exemption laws are to be liberally construed ; and the application of this principle forbids the strict construction contended for by the counsel of the appellant. A similar statute prevails in the State of Illinois and Missouri, each, like our owm, being copied substantially from the New York statute of 1840. So far as affects the question before us, the phraseology of these various law's seems to be essentially the same. The courts of these States have held, that the statute is remedial in its character ; that it is founded on *203charity, and intended to subserve a beneficent purpose ; and that it is in the nature of, though not strictly, an exemption law ; and, for these several reasons, that it should be liberally construed to effect the legislative policy contemplated in its passage.— Cole v. Marple, 98 Ill. 58 ; Charter Oak Life Ins. Co. v. Brant, 17 Mo. 419 ; Brummer v. Cohn, 86 N. Y. 11.

We do not think it was ever contemplated that a policy of insurance should have been taken out by the wife exclusively, or through her agency, in order to receive the protection of the statnte. Under the rules of the common law, the wife was disabled to make, or cause to be made, a contract of this nature; and even to any contract made by a third person, for the benefit of the wife, the assent of the husband was required. — 1 Pars. (Jontr. (6th Ed.) 369. The statute must be construed, therefore, to be enabling in its purposes, designed to remove from the wife the shackles of coverture imposed by the common law, which served to paralyze her independent authority to contract — so far, at least, as this particular subject-matter is concerned. When the husband undertakes to procure for her a policy of insurance on his own life, in accordance with its provisions, he acts for her, as her self-constituted agent; and in as much as he is conferring a benefit upon her, in the nature of a gift, her acceptance of it will be presumed, especially in view of her subsequent assertion of claim to it. The creditors of the husband are no more injured where the husband acts for the wife, than where the wife acts for herself. The injury, if any, lies in the appropriation of the husband’s money to the use of the family. It would be a narrow view of the law to say, that it authorizes the husband to hand over money for premiums to the wife, and that she could lawfully take out the policy, but that, if he should take the same money, and procure the issue of the policy for her use, and in her name, it would be vitiated by reason of her ignorance of, or want of agency iu the negotiation. There can be no more fraud against creditors in the one case -than in the other.

The policies, in our judgment, are within the equity and spirit of the statute, if not strictly within its letter, and were issued in substantial compliance with the provisions of the statute. Beneficial’statutes, especially wdien enabling or remedial in their nature, have alwaj's been expounded by what is called an equitable construction — so as to be either enlarged or restrained in their letter 'ultra the strict letter, but not, as well said, contra the letter. — Potter’s Dwar. Stat. 236, 237.

In construing this statute in Fearn v. Ward, supra, it was not necessary for the purposes of that case that we should goto this extent.

Unless the husband is shown to have invested more than the *204sum of five hundred dollars annually in premiums on the policies, no part of the proceeds could be reached by creditors. Fearn v. Ward, 65 Ala. 33; Code, 1876, § 2733. This fact the bill fails tu allege, and the chancellor erred in not sustaining the demurrer based on this ground. The cause must be reversed, for this reason, and remanded on the cross-appeal taken by Caroline Schonfield and others. The decree dismissing the bill for want of equity, however, as to the several defendant insurance companies on the main appeal taken by the complainant, Eelrath, is without error.

Reversed and remanded.