Young v. Thomason

ANDERSON, J. Section 2535 of the Code of 1896 (section 4502 of Code of 1907, with a slight change), among other things, provides that “the husband or father may insure his life for the benefit of his wife, or for the benefit of his Avife and children, or for the benefit of his child or children, and such insurance is exempt from liability for his debts or engagements, or for his torts, or any penalty or damages recoverable of him, if the annual premiums thereon do not exceed five hundred dollars.” This statute Avas designed as a projection in the nature of an exemption to the class therein named, and should be liberally construed in favor of those whom it seeks to protect. At the time of the death of the insured, the policy was payable to his daughter, and the annual premium was much less than $500. Therefore said insurance was, under the very letter of the statute, exempt from liability for the debts of the father. It is contended, however, that the fund in question was not exempt under the statute for the reason, and notwithstanding it was payable to the daughter, that the policy contract authorized the father to change the beneficiary. It is a sufficient answer to this contention that the beneficiary was not changed, and that the policy was payable to the child at the death of the father, and the statute expressly exempts the proceeds from the payment of the father’s debts, etc. Had he changed the beneficiary during his life to one not covered by the exemption statute, it would have probably been beneficial to his creditors, and they could not complain, but as he did not change it, and it was, at [458] the time of his death, payable to a beneficiary mentioned in the statute, it was exempt. It would be a harsh rather than a liberal interpretation to hold that a fund payable to a child, and which the statute expressly declares is exempt, should not be exempt simply because the insured reserved the right to change the beneficiary, but who did not do so. We think that the fund in question is exempt under the statute, notwithstanding the insured reserved the right to change the beneficiary, but which said right was never exercised. The cases of Fearn v. Ward, 80 Ala. 555, 2 South. 114, and Tompkins v. Levy, 87 Ala. 263, 6 South. 346, 13 Am. St. Rep. 31, dealt with policies unlike the present one and in connection with the statutes of 1876, which have since undergone a considerable change, and the fact that the statute had undergone a change was emphasized in the Tompkins Case, notwithstanding the policy there considered was governed by the old statute. It is next insisted that the fund in question was subject to the claim of Mrs. Brock, for the reason that said claim contained a waiver as to the insured. The fact that Thomason waived his exemptions as to personal property could not operate as a waiver against the appellee. He merely waived his right to claim exemptions, but could not waive the exemptions given the wife, child, or children under section 4502 of the Code of 1907 (section 2535, Code of 1896). — Craft v. Stouts, 95 Ala. 245, 10 South. 647. It is well settled that a policy of insurance which is exempt under the laws of the state of the bankrupt are exempt under Bankr. Act 1898 (Act July 1, 1898, c. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]).— Holden v. Stratton, 198 U. S. 202, 25 Sup. Ct. 656, 49 L. Ed. 1018. The judgment of the circuit court is affirmed. Affirmed. All the Justices concur.