Case Information
*1 GENERAL OF TEXAS OFFICE OF THE AlTORNEY AUSTIN
1940, bwbiah
on the queatlo
o r th e l atata of now ariaor whether or not qurrtion xooutor is rornot la rep o rting only a ae-h4lf of th e U16RRt*a
Sh e p o oeodr of llte laaunaoe p oliolo r were under blur Inhoritaaoo Tsx Law br th mrb brublr I*girl~tlu* &l lW9. Attlole 9ll9 OS the Ro- ?Oorl~4~zth riroa ClVll st4tRt.l. a0 a0 amuld, now roadl, Lo part 40 iOl.lOWS J
Eonoz=blo 0.0%. II. BhopprU, paa. 8 aAll propartr within the jurl8dlotloa o’? or glr8ona1, oorponto or real
thlr mato, lnoorporrto, mad Oar latorert thoroln, laolud- lzu ropartr parrlag wdar l aonl power of & taut l xrrolrsd br tha r
l ppo *codoat br ~111, larurrao~ to laoludlag thr p0080a8 of llfo of the amouat noelnblo br the the rrtent waoutor or rdminlrtrrtor a8 lnrurum andot polloier taken out br the drordoat hla
owa llfo, md to th8 l rtoat of the 0x0088 over
Party ‘Ihoumnd Dollan ($40,000) of the amount by all other kneflohrlar aa larur- rooriveblr a80 w&or polloirr taken out by the drordoat open hi8 own lit., whothrr brloaglcy to lnhnbl- taatr of thlr Stat0 or to prrow who are not lnhabltaatr, regardlo whather ruoh property 18 loo&O6 within or without tklr star, whioh 8hall pa88 brolutoly or in trurt by will or tho law8 of doroent or dl8trlbutlon of thlr or by a00d, grant, or a~ other 8kt0, 8810, DDE or tnt0lldrd to uk8 *mot in or @rt
pO88orrloa l ajoy mrnt after th8 drath or th, grantor or doaor, ahall, upon prrlm to or
for the u80 oi 8nj person, oorpormtlon, or 8- roolatloa, be rubJ8ot to a tax for the benorlt of the strte*e General Rennw mad, la aocord- ano, with the iollowing ola8slfloOtlon . . . .a
It mar b o l arllr 8a8n from th8 prooroding wti- olb tha tax 1s barma oa tb amount or propert that pS88M. A p&rratlT xooutor 18 ouklag tin oontentlon b ,661.a ot llfo inrurm.ioo proorrda psrod at that only the dorth of the dooedent. Itrldeatly the executor tak- ing the porltloa that th@ 0th8r hali did not purr at th bath of d80Oa8te beoaurr the 8~ ~08 tha rir0.8 halt or oommunltf property due to tha hot t&t prualtana oa tho poll0108 he& b8rn pal6 out of oomunlt~ iundr.
Oa the other haad, ii the rntlro of lnrurlnor 99,SSt.M prooooti prrrard to tha banrilolar t *I l a,bparato property Of the horband mad aot ~8 Oomialt~ pro rty of both 8pou880, th8a tha l x~outor8~ooatontloa E thlr rarpeot rad entin larount murt b0 0v0rti8a insuraaor pm- ored would bo 8ubjrot to th8 hxaa Inharltanoe RX. la another want, if total proooeda of the poll-
8tatrd oler 80 thr bwwlolarler named therein netrubjeot *3 mmnblr OOOr(@ lL Shapmrd, pqo 8
8ar lloa or olrla ot th8 wlto, thrn moh total pr0000b0 h8t. ~88.6 rt the death of Ueordont and we taxable under our mu8 Iah8rltano* mx. a8 -11 ratthd ?Uh Of 18w in thh Stat. It
thbt wharo aa laaunaoo poll07 la taken out oa the life or 001 ot tha 8~0~808, rt the drath o? tha perroa 80 la- wn& tha 8uOh polloy bolou to tha beaotlolrry proOaed8 anamd therola, won though tho pronlum8 th8 polioy w8ro *id with ooamoaitf flllld8, ThiS Nh WI8 8anoUao86 by th# Su?rM8 OoWt Of T,#S in thr 0880 Ot X@rtiA T* &!OAll18tSr, et al, 6s 8. w. et4. Th8 oourt ia 8a opinion wrlttra br fU8tiOO BrOm 8tat.d # tOiiOW8~
-It 18 oont,ndod by the brt@ndMt@ in or- ror the tin hUSb#lrd oould not appropr1at.e the OOmmUnit)r iUlld8 to hi8 Own U8. 1n th8 puraham Of thir OOntrsOt without tho OOASOAt O? hi8 Wit@: but OUT Statuta S~Oiall~ prOtid88 t.hat the hurbaad Shall hrv0 the 8018 rbht O? ooa- trol or the ooaunualt~ property, and it ha8 bean unlroral~ hold that uah oontrol onmot be in- t~ertrrrd wlth ~11.88 18 8X8~Oi8~d in fraud of the ri@t8 Of the Wl?O. FM. St. Art. g9be~ 1. Cm, 15 mx. glb. Wo 800 DO ground Strmlar tn ?aOt8 O? thi8 dll88 to impraSh the action of the hU8b-d a8 trrudulbat tOwar hi8 ti?Or Th8 right to t& proaootla of the polloy, whether upen thr li?. o? tho wit. la favor ot the hU@- band, upoa the llfa 0r the buSband la favor Of th. WirO, ~##t# UQOa tha 8USl8 PrinOiple, whloh th# prOOwa8 Of WllOy bOlO= t0 th 18 t&t prroa naaed a9 payee, rad lt beOO&OS roxmrty upoa thr 0ontlnSenoy o? the aaath or t 0 insured ill th8 ii?Otiar@ Of rho &f4y,O. m#rOfOre, a8 it oould not lmoonm tho property of tha husband WiiS during the lltotlae of both of them, it OMaOt be hold to be a0mawit.y QrOpertY, ud thareror0 tha rrparatr propstir 0r thr one to whoc it mad. payable.'
Thl8 rule of law Laid dowa br tha 8UprOa8 Court rg8la l nnowo.4 th8 Baa Antonio CO-t O? CiTil Ap- -8 0880 O? fOn88 1. JOAM, 146 9. W. 265. Tbr &Ml@ COUrt Stat.6 88 fO11OW8;
aoaorable Ooorge g. Sheppard, page 4 that when lanuranae
tin v. YoAlll8trr, ha8 held -our la Suprrmo court, [0880] the 0s Kar-
18 takrn upon the iire 0r tha wlfr, payablr
the haband, and pmnluni8 pnld out of th8 oom- #unity fUA68, thr of polloy beoome jWOfJWd8 of tha hwbrsd. the rrparato proportr Thr oourt Stated 8RW Do @‘ound IA thr ?&OtS of the oar0 to lapoaoh the ation 0i hU#biUJd a8 rnuaulsat dootrlne wire tho iire or thr hu#band or aould not booomo that, toward8 [80] a plloy the prooasaa or hi8 tifr, the announord and
thr Froperty of l ltho r during the llretime of
both of them, It oannot be hold to bo ooziaunlty property, and [18] thorrtora the #~~lWt# property Of th8 On0 to whm it [18] pbyRbl8.”
Tha lulr oi law whloh prooludra the wlro from SollOWlng the prOOar 0i the ln8uranoe polloy and recover- ing rgainrt tha sarm baaaus8 oonitzunlty ?uncls were expen@ad la the payzaentr of pronluma was announood by the Toxar- kuia Court of Olrll Appeals in the oaso or l?orthwostorn Utual Llf8 Ineuranoo Ooqany v. Whit88rllo, 18@ s. W. 22.
Thr court 8tataa a8 fOllOWOJ
"In Rowlett v. Xitohell, [52] Tox. Clr. App. 589, 114 S. W. 845, lt wad hold that, la the
abaono8, aa waa the aaa8 bore, or rrsud on the prt Of hurband, the w1t0 aannot SOllOw and rooovor oommualty fIJIId@ 0xpnd0a by him la pre- miuma bwmrit other 0s lnaur.;.nco aa per8on8. plain, therorore, It polloy on hi8 iif8 for th8 not ntitloa reo ovo r Carrlo 8. shook ~a8 t&t lalntltf in error booaua8 oonolunlty runds were US. x by J. 0. Shook berm @he was dlrorcad fro;; him la paying pralumr due on the polloy.* 0s Apmalr 0s Taxar a?:lrmed the Thr cO1!~ib8iOa
OaSO Of Whit880~1. 1. tiorthwrater'n Yutual Llfr Insurance caqany in 221 8. w. 595. ma CmMt tatoa S&X rule of law t&t war rnnounord by the Ccat o? Civil Appeal8 la the following laoguagrl
*The use of aomraunlty fund8 in plpmnt 0s pr8nAuau for lnrurnaor upoa tha iit0
on* 890u80 rator othrr 0s the aot,
8onorablr oaorgr R. Shrppara, page 5
in thr l b8enoo 0s mud, oreatr la the oopcun- rol&burrownt for th8 fUAd8 ',~~dtha rl2ht
Yartln v. YaAlllrtrr, 94 'hx. 869, [63] 6. W. di4, 85 L. 8. A. 585. . ."
fha rule of law l nnounood in those other aasoa +a# reaently StatOd by Mrt Worth Court or Clvll Ap-
ala b thr oaao or Rln v. IMa, 98 8. 1. (24) 1226, writ of error dl8rl8rrd the Buyrtmir Oourt). Tho Court T rtakd fOilOW81 clear that thr liio in@Ur-
*Vo bellero an00 p01101~8 that were made payablr to the detradaat~8 ortat were Jilr reparato property, ia whloh the ommunlty 8tet8 oould hare no lntorert, lther legal or egultablm. Kartin V. XOAll:St~r, 94 Tw. 569, 53 8. U. 524, 56 L. Rd A. 5851 Jonor V. Jones (Srx. Clr. App.)
146 8. W. 265.
*In whltor~llr f. Northwestern IiUtUal Ll:o Ina. Co. (nx. Corn. APR.) Ml 9. 1. 695, 575, it WaS 8pOifiO8iay hid ‘th@ U88 Of aO?fi- nunlty fund8 la payment 0s prrmiuni8 for insuranor ugcm the iire 0s one rpousr in favor the other do.8 not, in the ab8onor 0s fraud, orente la tho comunlty the right to relsburrement for tho And furthorr *R@O0ver7 fund8 U8ed.’ th8 rertaiU:Ug ground, aaml7, that th8 OaSh 8Ur- maeor value or the pollay at the date of the ailOrO8 vb8 OOmIaun~ty pOparty, a One-half in- torrat in uhloh Wl?O, 18 p8- doorood -8 oludrd uadrr thr deol8lon In Batoh v. Eatoh (35 Tax. Cit. App. 373, 80 5. W. 4111, in whla'. a writ or arror war donird.**
27 w?17 Of OOnOiU8iOA, it 18 a WOii S~ttitId rti8 0s law 0s th18 Btatr that in a oasr auah a8 you pn8ent ln your th8 proare& 0s thr 1~8Ul%llO~ poll07 on th8 Inquiry lit0 0s the iaOOa8.d rpouse are payable to tho bonoflola~ -a thonla in@ from any olalic that tha runlr1ag apour might hare agalnrt thr 8a1ra due to the faot that the pn- &h&8 war. 9eld out Of OOmiunity fund@. ThiS bedI& tXW ll?a in8UrtXlC6 ptoOoed8 p88& ntlr8 (99JS2.02 thr brnorlclazy tho death or dooodent and the ontlre
301 gonorablr Oeorge H. Sbopprd, p&o
ai~ouat or lire lalruranoe proceed8 80ula tbereron b rub- i~pored tbereoa by Art1010 7117, 8upra. to tbo tax joot bore rnnouaord hoverer, rould or oourm be me rorult rubjeot tb8 $40,000 deiuotlon ot inrururoa proaeedr rl- lowed wader the kmB 8UOh Artiol**