Court Opinion

ID: 6510582
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:59.642289+00
Date Added: 2024-06-11T15:54:51.989644
License: Public Domain

SOMERYILLE, J.
— This is a creditor’s bill, filed by the appellee, for the purpose of subjecting to the payment of his claim the proceeds of a policy of insurance on the life of one Robert Eearn, the debtor, which was made payable to one of his children, Kate Coles Eearn, and was subsequently col*37lected, and invested in a mortgage security, after the death of the assured. The bill alleges the insolvency of the deceased at the time the insurance was effected, and also at the date of his death; and that he had a wife and several other children, besides the beneficiary of the policy.
In the year 1857, Thomas Fearn, of whose estate the appellee is the administrator debonisnon, with the will annexed, had become surety for Robert Fearn. Suit was brought on this claim, and the personal representative of the surety paid off the judgment, in February, 1872, which, with interest and costs, amounted to $2,276.16 ; and thereupon had the judgment assigned to him, as authorized by the statute. In August, 1869, Robert Fearn insured his life, for the sum of $10,000, in the Piedmont Real Estate Insurance Company, taking the policy payable at his death to his wife, Eliza Lee Fearn, and his children. In July, 1870, he surrendered this policy, and received another, in consideration, from the Piedmont and Arlington Life Insurance Company, for a like sum, payable to his infant daughter, Kate Coles Fearn. Robert Fearn paid annual premiums out of his own means, amounting to $204.68 on the first policy, and $624.17 on the second; being less than $500, for any one annual premium. After the death of the assured, the policy was collected, and the proceeds invested, by the guardian of the infant beneficiary, in a loan secured by mortgage on certain real estate described in the bill. These are substantially all the facts necessary to be stated for a clear comprehension of the points that are raised by the demurrer to the bill, which was overruled by the chancellor.
Section 2733 of the Code of 1876 authorizes any married woman to have her husband’s life insured, for her sole use, free from the claims of the representatives of the husband, or any of his creditors; and in the event of her surviving her husband, the sum, or net amount of insurance, becomes payable to her. The following limitation, however, occurs in this section : “ Provided, however, that in case the husband shall have paid, annually, premiums above the amount of five hundred dollars (out of his own funds or property), for such insurance, then such exemption shall only apply to such insurance in the proportion of five hundred dollars to the amount of premiums paid for such insurance.”
Section 2734 of the Code further provides, that, “ in case of the death of the wife, before the decease of her husband, the amount of the insurance may be made payable after death to her children, for their use, and to their guardian, if under age.”
In Stone v. Knickerbocker Life Insurance Co. (52 Ala. 589), *38it was said of this'statute, per Brickell, C. J., that its object was to “ authorize an insurance on the life of a husband and father, for the benefit of his surviving wife and children, freed from the claims of his creditors. To these he owes the duty of maintenance and protection. The statute intended to guard against the perversion of this right or privilege into the means of defrauding creditors. Therefore, a limit is fixed, beyond which he cannot pass, in paying premiums for such insurance from his own funds or property, which, in the absence of the statute, should have been appropriated to his creditors.”
In Continental Life Ins. Co. v. Webb, adm’r (54 Ala. 688), it was said, that “ a provision for the family, deprived by the death of the husband of its natural and legal protector, on whom the law devolved the duty of maintenance, was the object to be accomplished.”
This statute confers a special privilege, and is in the nature of a law exempting property from liability to execution. In order to obtain the benefits intended to be secured by it, there must be a substantial compliance with its provisions. We construe it to authorize the payment of a premium or premiums, not exceeding five hundred dollars for each year, on one or more policies, taken out in accordance with its letter and spirit; and this sum may be paid out of the funds or property of the husband, whether he be at the time solvent or insolvent.
And while, under the decisions of this court heretofore construing the exemption laws of this State, they have always received a liberal construction, they are not to be interpreted against obvious intention, or manifest justice. The policy, in thjs case, was procured by the husband in favor of one of his several children. The statute designed it for the benefit of the wife and children. It is not, therefore, in compliance with the requirements of the statute, and is not such a policy as justifies the invocation of the statute for its protection.
There is one aspect of this case, which, without reference to the other points considered, proves fatal to the defense interposed by the demurrer to the bill. The above statute, constituting sections 2733 and 2734 of the Code of 1876, was enacted and approved February 15, 1867. — Session Acts 1866-7, p. 503. The claim in question, though at that time contingent, accrued from a contract in existence as far back as the year 1857. A contingent liability is as fully protected against fraudulent and voluntary conveyances as a claim certain and absolute; and one whose claim accrued from a contract in existence at the time such conveyance is made, is *39a creditor within the meaning of the statute of frauds. — Bibb v. Freeman et al., 59 Ala. 612.
This statute, being one of exemption, furthermore, cannot operate on contracts existing before the date of its adoption. Parties entering into contracts are presumed to have in view such exemption laws as are in force at the date of the contract. And it has been held, both by this court and tbe Supreme Court of the United States, tbat the enlargement of property exemptions, by State legislatures, can not have a retrospective operation on antecedent contracts; for this would be in violation of section 10 of article I. of the constitution of tbe United States, which declares tbat “no State shall pass any law impairing the obligation of contracts.” — Nelson v. McCreary et al., 60 Ala. 301; Gunn v. Barry, 15 Wall. 610.
Tbe chancellor did not err in overruling tbe demurrer, and his decree is affirmed.
Brickell, C. J., not sitting.