Court Opinion

ID: 7900072
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:54:53.428124+00
Date Added: 2024-06-11T16:32:13.829113
License: Public Domain

Johnston, C. J.
(dissenting) : While the technical' meaning of the term “legal representative” is an executor or administrator, it is frequently used in insurance policies like the one in this action to mean next of kin or heirs. Looking at the statute and the charter of the association in pursuance of which the contract was made, as well as the surrounding circumstances, it appears quite manifest to me that the term was used here in the broader sense and meant a natural representative, like husband, wife, relative or heir, in connection with whom the term was used. It was so interpreted in Olmstead v. Benefit Society, 37 Kan. 93, 96. The certificate in question was issued by an Iowa association, organized under an Iowa statute, and we may look to that statute and the decisions under it in interpreting the contract. The statute provides that the purpose of insuring the lives of the members is to *674furnish “benefits to the wives, heirs, orphans or legatees of deceased members.” (Iowa Code of 1897, § 1784.) Another provision of the statute indicating that it was not contemplated that creditors could obtain benefits or proceeds of insurance through an executor or administrator is that the beneficiary may be changed at the pleasure of the assured, and it is then provided that “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.) In this case the wife was named as beneficiary. -Under the statute it would have been impossible for the assured to have changed the beneficiary so as to make the benefits payable to creditors. In the face of this provision the benefits ought not to be given, to creditors through the technical definition of the term “legal representative.” The term, being susceptible of interpretation as an heir or child, should be given that meaning rather than one that would be in conflict with the statute.
“The words ‘legal representatives’ have a secondary sense, well recognized, which harmonizes entirely with the purposes and objects of the association. The instances are not few in which they have been held to mean heirs at law. ‘The terms “legal representatives,” “personal representatives,” etc., are often used in statutes and instruments of writing in a broader sense, so as to include all persons who stand in place of and represent the interest of another, either by his act or by operation of law.’ 18 A. & E. Encycl. of L. 814.” (Harton’s Estate, 213 Pa. St. 499, 503.)
Another section of the statute provides that in the absence of an agreement to the contrary a policy “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), and in the same section there is a provision that the proceeds of a policy shall be exempt from liability for any debts, and still other provisions to the effect that benefits, indemnity *675or the avails of policies shall be exempt from liability for debts. It may be mentioned, too, that the charter of the association struck out the term “creditors” from the list of those who, under the statute, might have been named as beneficiaries. It was competent for the association to narrow the classes to whom benefits might go, and the charter of the association named all of those mentioned by the statute except creditors. It is provided, too, that a certificate, when issued to those designated by statute, can not be assigned to anyone else. (Iowa Code of 1897, § 1789.) The supreme court of Iowa held that an administrator who obtained money on a policy payable to legal representatives was liable for the avails of the policy, which should have been paid to the wife and children. (Kelley v. Mann, 56 Iowa, 625. See, also, In re Estate of Conrad, 89 Iowa, 396.) In Schultz v. Citizens’ Mutual Life Ins. Co., 59 Minn. 308, where the term “legal representative” was used in the contract and the application stated that the insurance was taken for the benefit of legal representatives, it was held that the terms should be interpreted as meaning heirs or next of kin and not executors or administrators. It deciding it the court said:
“It is always permissible to construe these-words in that way, especially in wills and policies of life insurance, wherever it is apparent from the context or subject matter that they were used in that sense. They will be construed in that way more readily in policies of life insurance than in almost any other kind of instrument, for the reason that such insurance is very commonly intended as a provision for the family of' the insured.” (p. 313.)
If a term in a statute is of doubtful import it should', be construed in connection with the entire statute and! the obvious purpose of the lawmakers, and when the whole statute and charter of the association are considered it seems reasonably clear to me that provision was not being made for the benefit of creditors. The declared purpose of the statute was to provide pro*676tection for widows-, heirs, orphans and legatees of deceased members. In cases of doubt the intention of the insured is an important element in determining the meaning of words used in a certificate. Now, the assured had a wife and children, and he became a member of an association that was organized to provide insurance for wives and children. He designated his wife as a beneficiary, and when his wife died the ■children still needed the protection. He did not, it is true, name another beneficiary after the death of his wife, but it is not to be supposed that he was planning and intending to make provision for the protection of creditors at the expense of his children. It is' rather to be inferred that he regarded the term “legal representatives” as broad- enough in its meaning to include his children, and so far as intention can go it would not take much evidence to raise the presumption that he intended the insurance for his children and not for his creditors.
Mr. Justice Smith and Mr. Justice Porter concur in the dissenting opinion of the chief justice.