Hunt v. Remsberg

Benson, J.

(concurring specially) : Concurring with, the decision of the majority of the court, I desire to add:

(1) The articles of incorporation of the insurance company which issued the policy in question declare that beneficiaries may be “husband, wife, relative, legal representative, heir or legatee.” It must be presumed that these terms were used in their ordinary sense, and that each represents a distinct class. The Iowa statute set out in the pleadings authorizes insurance for such beneficiaries, using the same terms, and including creditors also. The term “legal representative,” as used in the articles referred to and in the statute, clearly applies here, as it does ordinarily, to an administrator or executor.

(2) The policy was written in accordance with the power given by the articles of incorporation and the statute, naming the wife as the beneficiary, with the proviso that in case she died and no new beneficiary was designated by the member the amount of the policy should be paid to his legal representative. The wife did die before the insured; no new beneficiary was named; hence it was payable to the administrator, unless the apparent meaning of the language of the statute, the articles and the policy is controlled by some statute or judicial interpretation to the contrary.

(3) The provisions of the Iowa statute relied upon by the appellees do not appear to affect the question. These provisions are: “But no certificate issued for the benefit of a wife or children shall be thus changed so as to become payable to the creditors” (Iowa Code of 1897, § 1789) and “a policy of insurance on the life of an individual, in the absence of an agreement or assignment to the contrary, shall inure to the separate use of the husband or wife and children'of said individual, independently of his creditors” (Iowa Code of 1897, § 1805). The first provision referring to benefit *671certificates, if it applies in any case to an ordinary insurance policy like the one under consideration, has no application here, for there was no change attempted. The policy was.made payable directly to the legal representative, subject only to the death of the wife before the death of the insured. It was not issued to creditors but for the benefit of the estate. Whether creditors might ultimately share in it was a contingency which, if contemplated at all, was not prohibited by the statute, nor by public policy, which is not inimical to the payment of debts. The other statutory provision only declares that in the absence of an agreement or assignment to the contrary the policy shall inure to wife or children. Here the agreement to the contrary is expressly made in the contract. The statute thus recognizes the right to make insurance available to creditors if the insured so desires. Both of these statutory provisions, however, relate to insurance payable to creditors directly, and not to any contingent or possible benefits they may receive through the administration of an estate.

(4) The Iowa decision relied upon by the appellees, In re Estate of Conrad, 89 Iowa, 396, does not sustain their contention. The policy there was made payable to the wife of the insured or to her legal representatives, or, if not living at the time of the death of the insured, the sum then to be payable to her children. It will be observed that the beneficiary named was the wife or her legal representative, and that there was an express provision added that her children should receive the money. The court said:

“It is expressly provided in the policy that, if the assured be not living at the time the policy becomes payable, the amount thereof shall be payable to her children. There was no authority to make payment to the administrator of her estate in any event. The clause authorizing payment to ‘her legal representatives’ does not mean payment to their administrator. It contemplates payment to some legal representative *672appointed by the wife to receive the money for her. There can be no other meaning attached to the expression ‘legal representatives,’ because it is expressly provided that, if the assured be not then living, payment shall be made to the children or their guardian.” (p. 398.)

As the policy in the foregoing case required the payment to be made to the children the term “legal representative,” as there used, necessarily meant a person ■authorized to receive payment for them. No other meaning could be given consistently with the terms of the policy. An earlier case in that state, Kelley v. Mann, 56 Iowa, 625, held that it was the duty of an .administrator to collect a policy payable to personal representatives, but also held that it could not be applied to the payment of debts, because of a statute expressly exempting the proceeds of certain life insurance therefrom. That statute, however, was not pleaded in this case (which was decided upon a motion for judgment on the pleadings), but if it had been pleaded it would not have been controlling here, for exemption laws are not a part of the contract — they are subject to the laws of the forum. (Chicago, Rock Island &c. Railway v. Sturm, 174 U. S. 710; 2 Freem. Ex., 3d ed., § 209.)

In Schultz v. Citizens’ Mutual Life Ins. Co., 59 Minn. 308, it appeared that the policy was made payable to, and for the sole use of, the legal representatives of the insured. On the application, made part of the policy, the insured stated that the money should be paid to his legal heirs, “wife if living.” Construing the language of the two instruments together, the court held that the policy was payable to the wife and children of the deceased. This decision supports the rule stated in the principal opinion that it is permissible to construe the term “legal representative” with reference to the context.

(5) The answer, admitted by the motion for judg*673ment to be true, alleged that the money was received in May, 1907, and that it had been disbursed in accordance with and under the judgments and order of the probate court, before the commencement of this action (March, 1909) ; that the administrator had duly performed all the orders and judgments of the court respecting the estate, and had not violated any condition of his bond. There is no averment in the petition that the appellees ever presented their claim in the probate court, although the sum due on this policy appeared on the inventory. A grave question is presented whether, even if the appellees were entitled to the fund, they should not have presented their claim in the probate court. The right of the administrator to collect the money is expressly held in Kelley v. Mann, 56 Iowa, 625. The fund was thus brought within the jurisdiction of the probate court, and the question remains whether there is any breach of the bond until there is a violation of some order of the court respecting its distribution.