Court Opinion

ID: 9669196
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:42:55.95804+00
Date Added: 2024-06-11T18:15:53.692121
License: Public Domain

McCALEB, Justice,
dissenting in part.
I am in accord with the resolution of the majority that the life insurance policies were neither assigned nor pledged to appellants by the deceased. And I also agree that Act No. 189 of 1914, exempting “from all liability for any debt” the proceeds of life insurance, save in the instances specifically detailed therein, implies that there are no other exceptions and that, therefore, the deceased could not waive its provisions to the detriment of appellees. But I cannot subscribe to the ruling that appellants are entitled to recover $5328.86, allegedly representing a portion of the amount the deceased embezzled from appellants, which he is supposed to have used to pay premiums on the policy.
In the first place, I encounter difficulty in following the theory on which the majority deduce that the $5328.86, which was paid by decedent as premiums on the policies in contest during the time he was acting as agent for appellants, is part of the $26,000 he collected for appellants’ account. It is shown that, while acting as appellants’ agent, the deceased deposited in his bank account $314,875.91 from various sources and that all the money collected for them was deposited and commingled with the other funds in the account. Still, it is professed that, because he paid the $5328.86 as premiums on the life insurance policies in contest during the period that he was representing appellants, he must, perforce, have paid it from his peculations rather than from other funds belonging to him. This conclusion is reached by indulging in a presumption evolved by common law courts that, wherever misappropriated funds are shown to have been indiscriminately com*35mingled with other monies in the bank account of the person who has breached a trust, the burden shifts to that person to show a segregation of the funds. There may be some justification for this doctrine where the litigation involves only the defrauded person and his unfaithful agent for, in such case, the latter is in a better position than anyone else to account for the disposal of the funds — but, here, appellees, as holders of the insurance proceeds which are exempt from decedent’s debts, are obviously without any knowledge concerning the title of the funds used in making the premium payments. Hence, to rule that they nevertheless have the onus of tracing the title of these funds is tantamount to applying a conclusive presumption against them and thus subject the insurance proceeds to the reimbursement of the misappropriated funds, despite the fact that the record is barren of any proof exhibiting that the monies actually used in paying -the premiums belonged to appellants.
Moreover, even if it be assumed that the $5328.86 which was used for the payment of premiums is traceable to the misappropriated funds, the deduction of the majority that the proceeds of the life insurance are .spb-; jected to appellants’ claim for. .the return of these premiums, appears to me to ibe nothing more, than the creation, by indirection, of a privilege on the proceeds in favor of appellants in partial reimbursement of decedent’s debt when none exists by statute and in plain violation of Article 3185 of the Civil Code. See also Daugherty v. Canal Bank & Trust Co., 180 La. 1003, 158 So. 366 and authorities there cited. And it will not do to say that there are no other unpaid creditors of the succession as this circumstance does not enhance the validity of the reasoning underlying the ruling. 'Indeed, the paradox of the result reached in the main opinion is evident for the basis, upon which appellants’ claim to the entire proceeds is rejected, is that Act No. 189 of 1914 does not permit the subjection of the avails to the payment of the insured’s debt but yet it is finally resolved that those same proceeds are amenable to part of the debt— that is, to the extent that the misappropriated funds were used in paying insurance premiums. For my part, I see no difference, insofar as the application of the legal exemption is concerned, between debts which emanate fom legitimate causes and those resulting from a breach of trust. Surely, the statute makes no distinction in this regard and it .is not our function to write such an exception into the law. Nulsen v. Herndon, 176 La. 1097, 147 So. 359, 88 A.L.R. 236. True enough, a majority of the common law states provide authority for the .prevailing opinion but those pronouncements are founded on the constructive trust or equitable lien doctrine, which is unknown in Louisiana; albeit, the antithesis of the provisions of our Code dealing with privileges.
I think that the judgment should be amended, as prayed for by appellees, and affirmed in all other respects.