If the Legislature had the authority to pass the Act to exempt policies of life insurance from execution, (which power the respondent does not question,) and if the policy comes within its provisions, the funds thus invested and the policy are as much exempt from execution as if invested in necessary provisions for immediate family use.
So faras the merits of this case are concerned, it matters but little whether the Act under which this policy is claimed as exempt from execution is to receive a strict or liberal construction, although the Courts of New York hold that statutes exempting property from taxation should be liberally construed. (Carpenter v. Harrington, 25 Wend. 370; Ford v. Johnson, 34 Barb. 364.) In the last case the Court say: " And it is undoubtedly the duty of the Court, since these Acts concern the public good, to give them an enlarged and liberal construction."
If the paper called the endowment policy of life insurance is a life insurance, and the money, benefit, right, privilege, or immunity accruing therefrom or growing out thereof, have or might have been secured by the payment of a sum not exceeding five hundred dollars a year, then it comes within the provisions of the Act.
Angell, in his work on fire and life insurance, section two hundred and seventy-four, says that life insurance is a contract of indemnity, and defines it to be " a contract by which the underwriter, for a certain sum, proportioned to the age, health, profession, and other circumstances of the person whose lifeis the object of the insurance, engages that that person shall not die within the time limited in the policy, or if he do, that he will pay a sum of money to him in whose favor the policy was granted."
The above is given as the definition of an ordinary policy of insurance, and in section two hundred and eighty-four the same author gives the form of such a policy. As the wants and conveniences of society have required, other forms and modes of insurance have been adopted, among which is the endowment plan, upon which issues an endowment policy of life insurance, as will be seen by reference to the appendix to the same work.
We refer the Court to these to show the custom and course of proceeding, and the different kinds of contracts that are called policies of life insurance. We conclude from the foregoing that the form adopted in this case is one of the modes practiced by life insurance companies, and that the advantages to be derived from this policy come within the provisions of the Act.
JUDGES: Crockett, J. Mr. Justice Sanderson concurring specially.
OPINION
CROCKETT, Judge
Briggs obtained a money judgment against McCullough and others, on which an execution was duly issued. After proper proceedings in that behalf, McCullough was ordered to appear before a referee, appointed by the Court for that purpose, to be examined touching his property. In the course of his examination before the referee he admitted that he had deposited with the Pacific Mutual Life Insurance Company of California the sum of two thousand nine hundred and thirty-three dollars in gold coin, and took from said company an agreement, called an " endowment policy," whereby the company agreed to pay him or his assigns, on the 6th day of July, 1878, (or sooner if he should die,) the sum of three thousand five hundred dollars in United States gold coin, together with such dividends as his deposit should earn. He also admitted that said policy was in his possession and was his property; and thereupon the referee made an order that McCullough deliver the policy to the Sheriff, as property to be applied on the judgment of Briggs. McCullough refused to obey the order, which fact was reported by the referee to the Court which rendered the judgment; and thereupon the Court cited McCullough to show cause why he should not be punished for a contempt, and on the rule to show cause, (in obedience to which McCullough had appeared,) the Court, after hearing the matter, found the facts to be as already stated, and adjudged McCullough to be guilty of a contempt, and entered an order that he be imprisoned, without bail, until he obeyed and complied with the order of the referee. From this order McCullough has appealed.
At the hearing, a motion was made to dismiss the appeal; but without expressing any opinion on this point, we deem it best to dispose of the case on its merits. The counsel for McCullough claim that the policy of insurance in question is exempt from execution, under an Act of the Legislature of March 28th, 1868, (Stats. 1868, p. 500,) which provides that " no money, benefit, right, privilege, or immunity accruing, or in any manner whatever growing out of any life insurance on the life of the debtor, made in any insurance company incorporated under the laws of this State, shall be subject to levy under attachment, execution, or under any original mesne or final process whatever against such debtor, or to be taken, sequestered, or reached by any proceeding supplementary to execution, or other like proceeding, provided, however, this exemption shall not extend beyond such moneys, benefits, rights, privileges, and immunities as have been or might have been secured by the payment of an annual premium, not exceeding five hundred dollars."
In order to secure the benefit of this provision, it must appear:
First--That the insurance was made by an insurance company " incorporated under the laws of this State." This fact does not appear in this case. The company which issued the policy is designated in the proceedings as the " Pacific Mutual Life Insurance Company of California; " but for aught that appears, this may be only the name of a private joint stock association, or, at most, of a foreign corporation doing business in this State. The mere name under which it does business raises no presumption whatever that it is an incorporated company; and certainly none that it was " incorporated under the laws of this State; " nor is there any other proof of the fact in the case.
Second--It must appear that it is an " insurance on the life of the debtor," and it is urged that the policy in this case is not an insurance on the life of McCullough in the sense of the statute, but is simply a covenant by the company, that in consideration of a certain sum deposited by McCullough, the company will pay him at the expiration of ten years, or sooner, if he dies, a certain other stipulated sum, together with such dividends as his deposit shall, in the meantime, have earned. The term " life insurance" is not alone applicable to an insurance for the full term of one's life. On the contrary, it may be for a term of years, or until the assured shall arrive at a certain age. It is simply an undertaking on the part of the insurer that either at the death of the assured, whenever that event may occur, or on his death, if it shall happen within a specified term, or before attaining a certain age, as the case may be, there shall be paid a stipulated sum. In either form it is, strictly speaking, an insurance on the life of the party. In this case the policy was to become payable on the death of McCullough, provided he died within ten years, and it is to that extent certainly an insurance on his life. It is an undertaking to pay the stipulated sum if he shall die within a specified term, which is of the very essence of life insurance. The fact that the company is to pay the agreed sum at the expiration of ten years, even though McCullough shall not have died in the meantime, does not divest it of its character of life insurance. It is only a new and additional element in the contract not inconsistent with its other, which is its chief constituent part, to wit: the undertaking to pay on the death of the assured within the specified term. We think, therefore, that this was an insurance on the life of McCullough.
Third--It must appear that the policy is not of the excepted class mentioned in the proviso to the statute, and the party claiming the exemption must show affirmatively that his case is within the provisions of the statute. To do this, it was incumbent on McCullough to establish that the benefits which he is to derive from the policy are such as might have been secured by the payment of an annual premium not exceeding five hundred dollars.
No effort was made to do this, and there is nothing in the case from which we can infer the fact. In the absence of all proof, we cannot presume that this or any other insurance company would have issued this or any other policy, securing to McCullough the same " moneys, benefits, rights, privileges, and immunities" which this policy secures, by the payment of an annual premium of five hundred dollars. Having failed to establish a case which entitles him to the exemption provided by the statute, we find no error in the record.
Judgment affirmed.
CONCUR
SANDERSON
Mr. Justice Sanderson concurring specially:
I concur in the judgment upon the first and third grounds considered by Mr. Justice Crockett.