Blair v. Baker
| Decision Date | 03 November 1950 |
| Docket Number | 11. |
| Parties | BLAIR et al. v. BAKER et al. |
| Court | Maryland Court of Appeals |
Edward Pierson, Baltimore (Leon H. A. Pierson, Pierson & Pierson and Blair & Blair, all of Baltimore, on the brief) for appellants.
Nathan Patz, Baltimore (Jack L. Grossman, Baltimore, on the brief) for appellee Daisy E. Baker.
Before MARBURY, C J., and DELAPLAINE, COLLINS, HENDERSON and MARKELL, JJ.
This is an appeal by executors from a decree that a debt of their testator secured by an assignment of four life insurance policies, be paid out of three policies payable to his estate and not out of the fourth, payable to a named beneficiary.
Richard M. Baker died on April 9, 1949. He left no widow or children. His wife had died in October, 1946. By his will, dated April 6, 1949, he directed payment of all his just debts and funeral expenses and left twenty pecuniary legacies aggregating $9,000, and specific legacies of furniture and silver, and left the residue to Daisy E. Baker, who was not related to him. He left four life insurance policies, with four different companies, three payable to his estate. Upon his death the aggregate amount payable on the three was $5883.14. On his fourth policy with the Northwestern $4900.85 was payable. Whether under the policies, or any of them, the right was reserved to change the beneficiary does not appear. Apparently the Northwestern policy provided for lapse of the rights of a beneficiary upon death during the life of the insured.
About 1941 he became indebted to the Equitable Trust Company in the sum of $5176, which was secured by assignments, dated December 27 1941, of the four policies, and also two other policies, as collateral. The two other policies were later surrendered for cash, and the indebtedness was thereby reduced to $3498.80, the amount owing at his death. His wife had been named as beneficiary of the Northwestern policy. He and his wife, as beneficiary, signed the assignment of that policy, giving plenary power to the Equitable to collect the policy and, after payment of the debt, to pay the balance to the persons entitled under the policy, but not directing that the debt be so paid and not paid out of other collateral or the debtor's other estate. On January 28, 1947 he signed a designation of Daisy E. Baker as beneficiary under the Northwestern policy. This assignment provided, inter alia: 'The rights of any payee herein designated shall be subject and subordinate to any indebtedness on account of said policy in favor of the Company, and subject to the interest acquired by the Equitable Trust Co. under assignment dated December 27, 1941.' The words italicized are typewritten, the others are part of a printed form.
Mr. Baker left a piece of Baltimore real estate, which was appraised at $7500 and in June, 1949 was sold for $8000. His estate received $2913 from the City of Baltimore Employee's Retirement System. If the Equitable debt is paid out of the Northwestern policy the estate will be sufficient to pay all legacies in full; otherwise not. The amount of the residue or deficiency (as the case may be) has not been determined. Since the beneficiary is also the residuary legatee, the net amount in dispute cannot exceed $3498.80. Apparently it may be much less.
All four insurance companies promptly sent checks to the joint order of the Equitable and the estate or the beneficiary, as the case may be. Through some timidity or obstinancy none of these checks has been collected, the Equitable has not been paid, and thus $10,783.99 of insurance money has been idle, and interest has been accumulating on the debt of $3498.80 to the Equitable, though that sum is the maximum ever possibly in dispute--and could safely have been kept in a savings bank.
The executors proffered testimony of one of them 'to show the testator's proclaimed purpose in executing his last will'. The proffered testimony was of course excluded. A prior will, dated February 17, 1947, was also excluded on objection by the beneficiary. For present purposes the prior will was not materially different from the last will. It contained sixteen pecuniary legacies, aggregating $10,000.
The lower court held that the estate is primarily liable for the debt, because there appears no such clear intent of the testator as would overrule the rule of law ordinarily applicable.
The executors contend that the legal effect of the assignment to the Equitable is to entitle the beneficiary to only that part of the policy proceeds in excess of the debt, and that the instrument designating the beneficiary indicates the same intent. Neither the assignment nor the designation says so. Nor does the will--if that is material. The assignment and the designation contain no such direction, and the will (like the prior will executed soon after the designation) directs payment of 'all my just debts'.
The executors say the typewritten words in the designation must be construed as limiting the beneficiary's interest to the excess over the debt, because otherwise they would only restate the legal effect of the assignment and would be superfluous. They say that, if possible, a writing should be construed so as to give effect to every word. This is an ingenious perversion of a rule of construction. Every word should be given meaning and effect, but not an effect different from the rest of the writing, or a meaning different from its natural meaning, merely in order to be different and to avoid superfluity. As Mr. Justice Frankfurter says, sometimes 'the redundant becomes the necessary'. State of Maryland v. Baltimore Radio Show, 338 U.S. 912, 919, 70 S.Ct. 252, 255. This is no less true of an insurance policy than it is of a judicial opinion. No stretch of imagination is required to find reasons why an insurance company might prefer a specific mention of the Equitable assignment, on the face of the designation, to general words in the printed form.
In the absence of fraud, and subject to any reserved powers of revocation change, assignment and the like, a beneficiary is the owner of a life...
To continue reading
Request your trial