76 So. 223 | La. | 1917
Adonis Le Blanc took out three policies of insurance, for $2,000 each, known as 20-annual-payment' policies, on his life during his marriage with Rose Thibault Le Blanc. Two of the policies, in the Equi
Tbe beneficiary named in tbe policies, Bose Thibault Le Blanc, died on tbe 16th of December, 1914, leaving eight children, issue of her marriage with Adonis Le Blanc. On tbe 30th of December, 1915, tbe surviving husband, availing himself of the privilege of changing tbe beneficiary named in tbe two policies in the Equitable Life Assurance Society, bad them made payable to bis estate. No change was made as to tbe beneficiary named in tbe policy in tbe Fidelity Mutual Life Insurance Company of Philadelphia; but, like the two policies in the Equitable Life Assurance Society, it became, by the death of Mrs. Bose Thibault Le Blanc, payable to tbe estate, tbe administrators or executors of tbe assured.
Adonis Le Blanc continued to pay tbe premiums on tbe three policies after the death of bis wife and kept tbe insurance in force to the date of bis death; that is, tbe 14th of January, 1916. Two of his children, J. Earl Le Blanc and Mrs. Oneida Le Blanc Melancon, bad reached tbe age of majority. Mr. and Mrs. Melancon were appointed administrators of the succession of her father, and the Crowley Bank & Trust Company was appointed tutor of the six minor children.
Tbe Fidelity Mutual policy, with the accumulations, at tbe date of tbe death of tbe insured, amounted to $3,038, on which tbe insured had obtained a loan from tbe company amounting to $811.27 at tbe time of bis death. Tbe net proceeds or avails of the life insurance collected by the administrators, therefore, amounted to $6,226.73.
Other property belonging to tbe community theretofore existing between tbe assured and his wife consisted of real estate valued at $1,375, and personal property valued at $496.-50. It appears that the community owed tbe separate estate of the assured $226.12 for premiums paid on tbe insurance policies after tbe death of Mrs. Le Blanc, and $90.-58 for certain pavement certificates paid by him for the improvement of tbe community property after her death. The separate estate of Adonis LeBlanc also owns 82 shares of the capital stock of the Stauffer-Godchaux Company, valued at $4,100, on which there is a vendor’s lien in favor of Frank A. Godcbaux, Albert Stauffer and O. A. Broussard for $6,625. Tbe administrators also have in their possession $482.89 cash belonging to the separate estate of Adonis Le Blanc. It appears, therefore, that tbe assets of tbe separate estate of Adonis Le Blanc, exclusive of any interest in the life insurance, and excluding also tbe debts due by tbe community to tbe separate estate and the capital stock in tbe Stauffer-Godchaux Company, affected by tbe vendor’s lien, amount to $1,418.64; that is, about $200 more than the law charges, costs of tbe administration, expenses of last illness, and funeral expenses. Tbe other debts due by Adonis Le Blanc, at tbe time of bis death, besides the debt of $6,625 secured by the vendor’s lien on tbe capital stock in tbe Stauffer-Godchaux Company, amounted to only $267.35.
Tbe administrators filed an account or a statement showing tbe proposed method of distribution of tbe assets of tbe estate, and prayed for judgment approving the account and ordering that a settlement be made accordingly. They treated the $6,226.73 collected from tbe insurance companies as an asset of tbe community, less the premiums paid by Adonis Le Blanc after tbe death of his wife, amounting to $226.12, which amount
J. Earl Le Blanc and the tutor of the minor children oí Adonis Le Blanc filed an opposition to the account and manner of settlement of the succession proposed by the administrators, on the ground that the entire proceeds or avails of the life insurance are, by the Act No. 189 of 1914, exempt from liability for any debtsof the succession of Adonis Le Blanc, and should be paid to his heirs at law.
Erante A. Godchaux, Albert Stauffer, and O. A. Broussard, as creditors of the succession, opposed the account and the proposed manner of settlement of the succession, claiming that the entire proceeds or avails of the life insurance should be treated as an asset of the separate estate of Adonis Le Blanc, not an asset of the community, and should be applied to the payment of his debts. In the alternative — that is, in the event the court should hold that the proceeds or avails of the life insurance should be treated as an asset of the community and not of the separate estate of Adonis Le Blanc — these three creditors claimed that the estate of the deceased wife of Le Blanc should bear a proportionate share of the law charges and costs of the administration of his estate.
In answer to the opposition filed by J. Earl Le Blanc and the tutor of the minor ■children of Adonis Le Blanc, the creditors, Godchaux, Stauffer and Broussard, contend that the Act No. 189 of 1914, purporting to exempt the proceeds or avails of life insurance from liability for any debt, is unconstitutional, in that the text is broader than the title of the statute; and that the statute cannot, in this case, have the retroactive effect of impairing the obligations of contracts. In the alternative, they contend that, if the statute should be held constitutional, the exemption was personal to and in favor of the insured and did not survive in favor of his heirs at law.
Other oppositions were made to the account of the administrators and proposed manner of settlement of the estate, which, however,. .are not involved in the present appeal.
Judgment was rendered dismissing the opposition of J. Earl Le Blanc and of the tutor of the minor children of Adonis Le Blanc, at their cost, rejecting the demand of Godchaux, Stauffer and Broussard to have the proceeds or avails of the life' insurance treated as an asset of the separate estate of Adonis Le Blánc, but allowing their alternative demand that the estate of the deceased wife of Adonis Le Blanc should be charged with a proportionate share of the costs of the administration of this estate. J. Earl Le Blanc and the tutor of the minor children of Adonis Le Blanc, on the one hand, and the creditors, Godchaux, Stauffer and Broussard, on the other hand, have appealed from the judgment.
Opinion.
The exact language of the statute is that the proceeds or avails of all life, including fraternal and co-operative, health, and accident, insurance shall be exempt from liability for any debt, except for a debt secured by a pledge of such policy, or any rights under such policy that may have been assigned, or any advance payments made on or against such policy.
The terms of the statute are sufficiently broad and comprehensive to exempt the proceeds or avails of life insurance from liability for debts due by the succession of the insured after his death, as well as to exempt the cash value or surrender value of policies of insurance during the lifetime of the insured. In fact it is difficult to conceive of more comprehensive or plainer language than the Legislature has used to exempt from liability for the debts of the insured, after hi's death, the proceeds or avails of life insurance paid or payable to his estate, his executors or administrators. The proceeds or avails of life insurance means the amount collected from the insurance company or companies; and, as a general rule, there are no proceeds or avails of life insurance until the death of the insured. For example, fraternal life insurance has no commercial or cash value during the lifetime of the insured, and could not possibly be levied upon or rendered liable for debt during his lifetime. We cannot believe that the Legislature intended to exempt from seizure or liability for debt, only during the lifetime of tbe insured, the cash value or surrender value of policies of life insurance made payable to the insured, his executors or administrators, and did not intend to exempt from liability for debts of the insured the proceeds or avails of life insurance made payable to his estate and collected by his executors or administrators after his death.
The proceeds or avails of life insurance in favor of a beneficiary other than the estate of the insured, his executors or administrators, is not liable for the debts of the insured. Hence it could not have been the intention of the Legislature that the exemption, from liability for debts of the insured, of the proceeds or avails of life insurance collected after his death, should apply only to insurance in favor of a beneficiary other than the person whose life was insured, and not to insurance in favor of the estate, the executors or administrators, of the insured.
It is contended by the learned counsel for the administrators and the creditors that the mere fact that life insurance is made payable to the administrators, executors, or assigns of the assured implies that the proceeds or avails are liable for the debts to be paid by the executors or administrators. If that had been the idea or intention of the Legislature, there would have been no reason for excepting from the operation of the statute a debt secured by a pledge or assignment of a policy of insurance. It is evident, from the exception of a debt secured by a pledge or assignment of a life insurance policy, that the Legislature did not intend
It is argued, on behalf of the administrators and the creditors, that an exemption of any property from seizure or liability for debt is personal to those in whose favor it is granted, and does not survive in favor of their heirs. A number of decisions are cited in support of the proposition that the homestead exemption in favor of the head of a family did not survive in favor of the heirs at law of a deceased beneficiary until it was expressly provided, in the Constitution of 1S79, that the benefit of the homestead exemption might be claimed by the surviving husband or wife or minor children of a deceased beneficiary. The doctrine of those decisions has no application to the exemption claimed in this case, for several reasons. Eirst of all, the exemption under consideration, unlike the homestead exemption, is not granted in favor of, or expressly confined to, any particular person or designated class of persons or individuals. The statute merely exempts the proceeds or avails of all life insurance from liability for any debt (except a debt secured by a pledge or assignment of a policy, or an advance payment or loan on the policy), without regard to who the debtor may be. Secondly, the language of the Act No. 189 of 1914 is that the proceeds or avails of all life insurance shall be “exempt from all liability for any debt”; whereas the language of the Constitution, exempting the homestead, is that it “shall be exempt from seizure and sale.” And, thirdly, it is not only the insurance itself, or the cash value or surrender value of the insurance while in force, but the proceeds or avails — the fund actually realized from the insurance — that is exempt from liability for any debt. Our opinion- is that the language of the statute, that the proceeds or avails of all life insurance shall be exempt from all liability for any debt, expresses the intention that the exemption shall survive the person insured and inure to the benefit of his heirs at law if the insurance be payable to his estate, his executors or administrators.
In Holmes v. Marshall, 145 Cal. 777, 79 Pac. 534, 69 L. R. A. 67, 104 Am. St. Rep. 86, 2 Ann. Cas. 88, it appears there were three paid-up life insurance policies, two payable to the wife of the assured, and one payable to his estate, his administrators or executors. At the death of the insured, the amount of the two policies made payable to his wife was paid to her, and the amount of the policy that was payable to his estate, his administrators or executors, was paid to the administrators. The balance remaining from that policy, after payment of the costs of administration, was set apart to the widow, as exempt from liability for any debts of the estate, under a provision of the Code of Civil Pi’ocedure of California. The proceeds of all three of the policies were deposited by the widow in a bank in Los -Angeles, and, after she had drawn against the account from time to time, the balance in bank was seized under a writ of attachment to satisfy a debt due by the widow. She contended that the fund was exempt from seizure under the section. of the Code of Civil Procedure which declared: “All monies, benefits, privileges, or immunities accruing or in any manner growing out of any life insurance, * * * [ax-e] exempt from execution.” Code Civ. Proe. § 690, subd. 18. The seizing creditor contended that the exemption extended only to debts
It is not necessary to apply the exexnption, in the case before us, to the extent to which it was applied under the statutes of Kentucky, Minnesota, and California.
A statute of Washington exempted the proceeds or avails of all life and accident iixsuraxxce fx-om all liability for any debt. In Flood v. Libby, 38 Wash. 366, 80 Pac. 533, 107 Am. St. Rep. 851, the question at issue was whether the statute applied only to such life insurance as was payable to a beneficiary other than the insured, or applied also to an endowment policy of insurance payable to the insured or to his estate, and having a cash value during his lifetime. It was held that the language of the statute was so sweeping and comprehensive that it exempted from liability fox- a debt of the assured, during his lifetime, an endowment policy payable to the assux-ed or his estate and having a cash sux-render value. It was not disputed, but was, on the contrary, conceded, that the proceeds ox- avails of the life insurance made payable to the assured or his estate would be exempted from liability for the debts of the assured at his death.
Our conclusion is that the fund of $6,226.-73, being the proceeds or avails of the life insurance collected by the administrators, is exempt fx-om liability fox- any debts of the insxxx-ed, Adonis Le Blanc, or of his succession, and .must be paid to his heirs at law.
For the reasons assigned,, the judgment