Source: https://openjurist.org/291/us/473
Timestamp: 2019-04-19 00:21:58+00:00

Document:
The Bureau paid Pagel, administrator of the estate of the insured, $9,116, being the value of the installments payable after the death of the designated beneficiary. The other assets in his hands were not sufficient to pay expenses of administration or the claims of creditors which amounted to about $3,800. The probate court directed payment of such claims. The mother, Selma Hallbom, claiming under the War Risk Insurance Act to be entitled to the entire sum as beneficiary, appealed to the district court which reversed the order of the probate court. The state Supreme Court affirmed. Hallbom's Estate, 179 Minn. 402, 229 N.W. 344. It held the money not subject to claims of creditors, that upon the death of the designated beneficiary the value of the unpaid installments became payable to the estate of the insured for distribution to such persons then living and within the permitted class of beneficiaries, section 511, as would be entitled to the personal property of the insured under Minnesota intestacy laws, and that such persons were entitled as beneficiaries and not as heirs.
Pending the application of the administrator for a writ of certiorari, the mother died and, after the granting of the writ, Pagel v. Hallbom, 282 U.S. 819, 51 S.Ct. 25, 75 L.Ed. 732, MacLean, who had been appointed special administrator of her estate, was here substituted as respondent. Her death having given rise to questions involving the rights of persons who were not parties, we vacated the judgment and remanded the case for further proceedings. Pagel v. MacLean, 283 U.S. 266, 51 S.Ct. 416, 75 L.Ed. 1023. The state Supreme Court remanded to the district court, with the suggestion that the brothers and sisters of the insured be made parties. Pagel v. MacLean, 183 Minn. 429, 237 N.W. 21.
In Singleton v. Cheek, supra, 284 U.S. 496, 52 S.Ct. 257, 76 L.Ed. 419, 81 A.L.R. 923, we held that, when the insured and designated beneficiary die successively intestate, the commuted amount of the installments not accrued when the beneficiary dies is to be paid to the estate of the insured for distribution to his heirs and that the heirs are to be determined as of the time of his death in accordance with the laws of the state where he resided and are not limited to the class of beneficiaries designated by the act. The question whether insurance money paid to the estate is subject to claims of creditors was not involved in that case. The purpose of the exemption, section 454, is to safeguard to the insured soldier and the beneficiary payments made under the policy to them or for their benefit. Spicer v. Smith, 288 U.S. 430, 434, 53 S.Ct. 415, 77 L.Ed. 875, 84 A.L.R. 1525. Upon the death of the insured, the father whom he had designated as beneficiary was by the Bureau awarded monthly payments to continue until death. The language of the statute limits the exemption to 'any person to whom an award is made.' It is clear that the statute does not extend the exemption beyond the insured and beneficiary. And, as said by the state Supreme Court after referring to our decision in Singleton v. Cheek, 'it cannot be held now that exemption of the fund survives both insured and beneficiary for benefit of the heirs of the former.' 249 N.W. 417, 419.
There is a conflict between decisions announced since our decision in Singleton v. Cheek (February 15, 1932) 284 U.S. 493, 52 S.Ct. 257, 76 L.Ed. 419, 81 A.L.R. 923. Hunt v. Slagle (July 29, 1932) 45 Ga.App. 470, 165 S.E. 287, holds in favor of the exemption. There is dictum to the same effect in Mixon v. Mixon (November 23, 1932) 203 N.C. 566, 166 S.E. 516. And see Brown v. United States (C.C.A. May 9, 1933), 65 F.(2d) 65.

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