H. J. Mullins & Co. v. Thompson

• Decision Date: 01 January 1879
• Citation: 51 Tex. 7
• Court: Texas Supreme Court
• Parties: H. J. MULLINS & CO. v. S. M. THOMPSON, ADM'R.

51 Tex. 7

H. J. MULLINS & CO.

v.S. M. THOMPSON, ADM'R.

Supreme Court of Texas.

1879.

APPEAL from Houston. Tried below before the Hon. R. S. Walker.

H. J. Mullins & Co. instituted proceedings November 10, 1874, by motion, against S. M. Thompson, administrator of the estate of W. P. Thompson, in the District Court of Houston county, on probate side, to compel the administrator to inventory as part of the estate the proceeds of a policy of insurance for $2,500, issued by the Phœnix Life Insurance Company. The defendant resisted the motion, claiming that the policy was payable to the heirs of said deceased, and formed no part of the estate; that the deceased died unmarried, leaving defendant and his wife, who were the parents of deceased, as heirs; that he also left brothers and sisters; that deceased was indebted to his father about $3,000, and that the policy was procured to secure his parents against loss, & c.

On the trial it was admitted that the policy was payable to the heirs or assigns of the insured; the heirship of the parents; that they were poor and had five other children, mostly girls; that the deceased was indebted to his father, and spoke of insuring his own life for the benefit of his parents, &c. No objection appears to have been taken to the parol testimony as to the intention of the deceased in taking out the policy on his life.

The court refused the motion. Mullins & Co. appealed.

Nunn & Williams, for appellants.--The decision of this case depends on a construction of the terms of the policy referred to in the record, which, as will be seen, was made payable to the “heirs or assigns” of W. P. Thompson, the insured.

We contend that the money collected on the policy so worded became, upon the death of insured, (he not having assigned it,) subject to the claims of his creditors; and that his heirs took, if at all, subject to such claims.

As is contended by appellee's counsel, much regard is had to the intentions of the contracting parties in construing policies of insurance as well as other contracts. But the intentions are looked to only to assist in ascertaining the meaning of the contract as made; and mere declarations of one of the contracting parties, made to third persons, and not entering into the negotiations between him and the other party to the contract, (the insurance company,) either before or after the issuance of the policy, furnish no safe evidence as to what the contract actually was between him and the company. (Wason v. Colburn, 99 Mass., 342.) Therefore, we submit, the testimony as to the intention expressed by deceased, as shown in the record, other than in the terms of the policy, was inadmissible, and ought not to be considered by the court in construing the policy.

Then what is the meaning of the language employed, and what is its effect in determining the proper application of the money?

We submit that the term “heirs” is not a designation of certain persons who are to be the beneficiaries of the policy, to the exclusion of the insured himself, and of his estate after his death. When used in connection with the word “assigns,” the only construction we can put upon the language which will at all harmonize the two terms, is that the interest in and control over the policy should remain in him (the insured) during his life, with the further stipulation that it should go to those legally entitled to inherit from him at his death, not as the absolute beneficiaries--the cestuis que trust--of the contractor, but as his representatives. Had he intended to provide for his father and mother and create a trust in their favor, why would he reserve to himself the absolute right of disposal? Suppose they had died before him: to whose heirs would the money have gone,--his or theirs? Most assuredly to his. The term heirs, taken by itself, is entirely too general and uncertain to warrant the supposition that by this policy he intended to invest the absolute beneficial interest in his father and mother; for he could not know that they would be his heirs when the right should accrue under it. He evidently intended to take out the policy in such shape that he could use, control, and receive whatever benefit from it he desired.

The word “heirs” simply referred to those persons whom the laws of descent would ascertain as his representatives.

This application of the term is by no means unprecedented. In the case of Soye v. McCallister, 18 Tex., 80, a conveyance was made to certain parties by name, the deed at the same time describing them as heirs of a deceased person.

The court, in construing the deed, held that they took in their representative capacity as heirs at law of the deceased, and not in their own right, as by purchase; and that the land was subject in their hands to the debts of their ancestor. So in this case the insured takes out a policy showing by the terms used that he intends to reserve to himself the benefit of and control over it during his life. At his death he still had an interest in it, for he still had the right to assign it in any way he chose. How did that interest vest in heirs? If at all, surely by descent; and if by descent, subject to the claims of creditors.

If a policy by its terms is assignable, a creditor may, by a proper proceeding, reach and apply the interest of insured to his debt. (Bliss on Life Ins., p. 590.) This shows that the right to assign retains to the insured the true interest in the policy. The appellee's counsel rely principally on the case of Loos v. The John Hancock Mutual Life Insurance Co., 41 Mo., 539.

In that case the policy, on the death of the insured before the expiration of fifteen years, was payable to his “heirs or representatives.” The court held that the only daughter and heir could maintain an action on the policy against the insurance company, the insured having died before the expiration of fifteen years.

In the case of Wason v. Colburn, 99 Mass., 342, precisely the same question arose on a policy issued by the same company, couched in the same language.

The case cited was referred to and discussed in the argument and considered by the court. It was then decided that the heirs did not take as beneficiaries or cestuis que trust under the policy, but that the money went to the estate of insured; and the Missouri decision was held to be correct. (Wason v. Colburn, 99 Mass., 342.)

Mr. Bliss, in his work on Life Insurance, referring to these two cases, gives his sanction to the Massachusetts decision as the more correct. (Bliss on Life Ins., p. 500.)

It is also in full accord with the decisions of our Supreme Court as to the legal significance of the word “representatives.” The other authorities referred to by appellee are not applicable, as will be found on examination.

Upon the point here discussed, we refer to People v. Phelps, 78 Ill., 147; Bliss on Life Ins., p. 469, et seq.

Moore & Spence, for appellee, cited Trenton...