174 Wis. 527 | Wis. | 1921
Lead Opinion
The legislature in 1915 (ch. 253) amended sec. 1087 — 1, Stats., relating to inheritance taxes, by adding sub. (7) providing:
“Insurance payable upon the death of any person shall be deemed a part of his estate for the purpose of the tax, and shall be taxable to the person or persons entitled thereto.”
It is the claim of the State that all life insurance maturing upon the death of the person insured is properly subject to the tax prescribed in sec. 1087 — 1, Stats., upon the ground that the proceeds of such insurance policies can be treated by legislative action for the purposes of such taxation the same as the decedent’s estate is treated, and that the payment of such proceeds to the beneficiaries can be made subject to
The conflicting rights asserted by the State and the widow of Mr. Allis make it necessary to consider the rights and interests of the insured and the beneficiaries in life insurance policies under the laws of this state. It is to be observed, as stated in Boehmer v. Kalk, 155 Wis. 156, 144 N. W. 182, by the late Mr. Chief Justice Winslow, that:
“Since a very early day it has been held in this state that one who insures his own life for the benefit of another and pays the premiums himself may at any time dispose of the policy, or may will it away without the consent of the beneficiary.” Citing Clark v. Durand, 12 Wis. 223, and Armstrong v. Blanchard, 150 Wis. 31, 136 N. W. 145.
In Rawson v. Milwaukee Mut. L. Ins. Co. 115 Wis. 641, 92 N. W. 378, the court adverted to this fact as peculiar to the law of this state and said:
“In Wisconsin, however, there has existed from early times a principle of the law of life insurance which is unique and at variance with the law in most of the states. This principle is that a person who insures his own life for the*531 benefit of another, and pays the premiums thereon, may [except a limitation by statute as to a married woman] dispose of the policy by will or in other manner not inconsistent with the terms of the policy, tq the exclusion of the beneficiary named therein.”
In Opitz v. Karel, 118 Wis. 527, 95 N. W. 948, wherein a gift of a policy was sustained as a valid one, it was noted that “Such a policy is not to be distinguished from ordinary choses in action, and conies within the operation of the legal rules applicable to agreements involving pecuniary obligations” (citing). In Slocum v. Northwestern Nat. L. Ins. Co. 135 Wis. 288, 115 N. W. 796, a son and daughter of the insured as beneficiaries sued the company for damages on the ground that the company wrongly breached and terminated the policy. It is there held that such beneficiaries in the policy could not maintain the action. In speaking of the nature of the rights of beneficiaries under the general law it was there declared:
“While such a right is a vested one it is in its nature a mere 'expectancy/ which is subject to be defeated by the act of the insured, and hence cannot be absolute and indefeasible until the death of the insured. The uncertainty of the beneficiary’s interests, growing out of the contingencies incident to the power of the insured to thus deal with the policy, renders the rights and interests of the beneficiaries too hypothetical to be made the ground for damages for a breach of the contract. It is a mere expectancy of an unascertainable value and hence cannot be made the basis of a claim for damages. Under the law of this state the rights of the insured in such a contract are valuable property rights, and for a deprivation thereof the insured is entitled to recover the damages as for other wrongful deprivations of valuable property rights.”
This court characterized a husband’s act in effecting life insurance on his life for the benefit of his wife and daughters in Farr v. Trustees, etc. 83 Wis. 446, 53 N. W. 738, in
We repeat these observations defining the rights of parties to an insurance policy in the law of this state because they are fundamental to a determination of the questions presented on this appeal. The contention of defendant is that Mrs. Allis, the beneficiary of these’policies and the widow of the insured, became vested with the proceeds of these policies at the time of their, issuance and that there was no transfer of property to her within the contemplation of the inheritance tax laws of this state at the time of the insured’s death, and hence no succession tax can be levied. The inquiry as to. the rights of Mrs. Allis under these policies under the terms of sec. 2347, Stats., is a pertinent one. This statute, among other things, provides that:
“Any person, whether, her husband or not, effecting any insurance on his own life or on the life of another may cause the same to be made payable or assign the policy to a married woman or to any person in trust for her or her benefit, and every such policy . . . shall be the sole and separate property of such married woman and shall inure to her separate use and benefit and that of her children, and in case of her surviving the period or term of such policy the amount of the insurance shall be payable to her or her trustee for her own use and benefit, free from the control, disposition or claims of her husband and of the person effecting or assigning such insurance and from the claims of their respective representatives and creditors.”
In Given v. Wisconsin Odd Fellows’ Mut. L. Ins. Co. 71 Wis. 547, 37 N. W. 817, the court relied on the rule adopted in Foster v. Gile, 50 Wis. 603, 7 N. W. 555, 8 N. W. 217, and held that if a policy of insurance does not designate to whom the insurance shall be paid in case the beneficiary named dies before the insured, the appointment of the beneficiary is revoked by such death and the insurance inures to the benefit of the estate of the insured. In Ellison v.
In addition to the foregoing considerations, it is manifest that this insurance fund in the hands of the widow is within the field of inheritance taxation even if it were considered that the husband’s interests had been transferred to his
. These considerations place the statute beyond the objections and claims of the respondents to the effect that the life insurance received by the widow can in no sense be considered estate in which the husband had no interest; that there is no succession to or transfer of the property within the field of inheritance taxation; or that the property is not taxable because the widow’s rights became fixed and vested before the passage of ch. 253, Laws 1915, and that the act violates the Fourteenth amendment to the federal constitution by denying to the widow the equal protection of the law or, depriving her of her property without due process of law.
It is contended that there is no direct evidence to show that the husband paid the premiums on the policies in ques
By the Court. — The order appealed from is reversed, and the cause remanded to the county court of Milwaukee county with direction to enter an order directing that the insurance fund in question be subjected to the inheritance tax under the law in accordance with this opinion.
The following opinion was filed October 3, 1921:
Dissenting Opinion
{dissenting). As to the insurance policies taken out prior to the passage of the amendment to the inheritance tax law under, consideration in this case and which insurance policies became payable to the wife beyond any possibility of control by the husband, she surviving, I think they became her property as to him, and she thereby then acquired such a vested interest in those policies as to place it beyond the power of the legislature, by merely declaring it to be something which it is not, to make it subject to the inheritance tax.