Ticker v. Metropolitan Life Insurance

His Honor EMILE GODCHAUX, rendered the opinion and decree of the Court, as follows: This is a three cornered contest between the mother, the wife .and the minor children of Frederick Ticker, Jr., who died leaving no property or estate, over the proceeds of a policy of insurance taken out, during the existence of the icommunity, by decedent ¡on his own life in favor of his wife originally as beneficiary, .and subsequently, by change of beneficiary or assignment, made payable- to his mother as beneficiary. The trial Court upheld the validity of the assignment or substitution of the new beneficiary, the mother, and ordered that the proceeds of the policy, which had been deposited in 'Court by the Insurance Company, he paid to her. The wife and the minor child appealed. Insofar as the mother’s claim as substituted beneficiary or assignee is concerned, we are of the opinion that it is g-overned by the doctrine announced in a recent case, where, as here, the transfer or substitution of a new beneficiary was wholly without consideration; was a donation, neither onerous nor remunerative, and as such wa.s held void for non-observance of the formalities prescribed by law for -pure donations. Succession of Miller vs. Manhattan Insurance Co., 110 La., 562. [57] The assignment or change of beneficiary being invalid and unauthorized, the policy survives in favor of the original beneficiary, the wife, whose interest therein it was sought to divest by virtue of the attempted assignment or substitution. Alba v. Prov. Life Society, 118 La., 1,021. But it is claimed’that the original designation of the wife in the policy as beneficiary, was likewise without consideration and consequently a pure donation, which in order to render it valid, required an observance of the formalities prescribed for donations. The Neal Case, 114 La., 652, which is cited in support of this contention, applied no such principle, but on the contrary upheld the validity of a gratuitious designation of the original beneficiary in the policy notwithstanding that the formalities prescribed for donations had not 'been observed. This is in line with the settled French jurisprudence. Baudry-Lacantiniere et Barde-Obligations, Vol. 1, p. 236; Fugier-Herman, Code Civil Annote, Vol. II, pp. 994-995. The designation of the wife as beneficiary being valid, the proceeds of the policy vest in her separate estate. Lambert vs. Insurance Co., 50 An., 1037; Succession of Buddig, 108 La., 406; Succession of Emonot, 109 La., 365. The minor child .claims and the wife admits that Ticker left no estate; that the donaton to the wife comprehends the face of the policy; and that it is excessive and should be reduced to the disposable portion. As there is only one child, the legitime is one-third and the proceeds of the policy consequently should be [58] divided between the child and the wife in the proportion of one-third and two-thirds, respectively. Opinion and decree December 8th, 1913. Rehearing granted, Jan. 12, 1914. R. C. C., 1493. Nor is the another’s claim, as creditor, for expenses incurred .and services rendered for her late son payable out of the proceeds of the polcy.. The portion of these proceeds belonging to the wife form part of her separate estate, and consequently cannot be held liable for the debts ¡of her husband or of the community. On the other hand, the child or heir receives her share in the proceeds of the policy by virtue of the right she exercised to reduce a donation prejudicial to ther legitime. The mother, as a creditor, can neither exercise this right nor share in the result of its exercise by the heir. R. C. C., 1504. It is accordingly ordered that the judgment be reversed, annulled and set aside, and it is now adjudged and decreed that there be judgment ordering Thomas Connell, Clerk of the-Civil District Court, to pay out of the funds herein deposited in the registry of said court, to the parties hereto (except the Metropolitan Life Insurance Company) the costs of court expended by them respectively in this proceeding, and that the balance of said fund then remaining be paid the appellants, Mathilda Murphy, widow of Frederick O. Ticker, Jr., and Fernand J. Paisant, as undertutor of the minor, Rita Mary Ticker, in the proportion of two-thirds to the former and one-third to the latter.- Reversed.' Syllabus. 1 A. life insurance policy is a contract sui generis, governed by rules peculiar to itself, the outgrowth of judicial precedents and not of legislation. 2. The proceeds of a policy of life insurance, payable otherwise than to the assured or his estate, belong to the beneciary, form no part .of the .estate of the assured, and are not liable for his debts or subject to community rights, or to reduction or collation.