Bank of Minden v. Clement
Decision Date | 11 April 1921 |
Docket Number | No. 238,238 |
Citation | 256 U.S. 126,41 S.Ct. 408,65 L.Ed. 857 |
Parties | BANK OF MINDEN et al. v. CLEMENT |
Court | U.S. Supreme Court |
Mr. Hampden Story, of Shreveport, La., for plaintiffs in error.
Mr. J. D. Wilkinson, of Shreveport, La., for defendant in error.
By Act No. 189 of 1914 the Louisiana Legislature undertook to exempt from debts of the assured the avails of insurance upon his life when payable to his estate.
Before passage of that act and while indebted to plaintiffs in error banks by notes which were renewed from time to time until his death, O. P. Clements took out two policies upon his life with loss payable to his executors, administrators or assigns. He died in 1917 and his administratrix collected the stipulated sums amounting to $4,433.33. The succession was insolvent, and the banks sought to subject the insurance money to their claims, maintaining that if construed and applied so as to exempt such funds the act of 1914 would impair the obligations of their contracts and violate section 10, article 1, federal Constitution. The Supreme Court of the state held that acceptance of the renewal notes did not operate as novations, but that the statute protected the insurance money without violating the federal Constitution since the exemption 'impaired the obligation of the pre-existing contract very slightly and remotely.' 146 La. 385, 83 South. 664.
Section 10, article 1, of the Constitution—'No state shall * * * pass any * * * law impairing the obligation of contracts'—has been much considered by this court and often applied to preserve the integrity of contractual obligations.
When the deceased took out the policies of insurance upon his life they became his property, subject to claims of his creditors. N. Y. Mutual Life Ins. Co. v. Armstrong, 117 U. S. 591, 597, 6 Sup. Ct. 877, 29 L. Ed. 997; Central National Bank v. Hume, 128 U. S. 195, 204, 9 Sup. Ct. 41, 32 L. Ed. 370; Burlingham v. Crouse, 228 U. S. 459, 471, 472, 33 Sup. Ct. 564, 57 L. Ed. 920, 46 L. R. A. (N. S.) 148; In re Coleman, 136 Fed. 818, 69 C. C. A. 496; In re Bonvillain (D. C.) 232 Fed. 372; Blinn v. Dame, 207 Mass. 159, 93 N. E. 601, 20 Ann. Cas. 1184; In re Heilbron, 14 Wash. 536, 45 Pac. 153, 35 L. R. A. 602; Rice v. Smith, 72 Miss. 42, 16 South. 417; Skinner v. Holt, 9 S. D. 427, 69 N. W. 595, 62 Am. St. Rep. 878; Joyce on Insurance, § 2341.
In Sturges v. Crowninshield, 4 Wheat. 197, 198 (4 L. Ed. 529), opinion by Mr. Chief Justice Marshall, it was said:
And in Planters' Bank v. Sharp, 6 How. 327, 12 L. Ed. 447, opinion by Mr. Justice Woodbury:
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