Hamilton v. Darley

• Decision Date: 17 February 1915
• Docket Number: No. 9645.,9645.
• Citation: 107 N.E. 798,266 Ill. 542
• Parties: HAMILTON et al. v. DARLEY.
• Court: Illinois Supreme Court

266 Ill. 542

107 N.E. 798

HAMILTON et al.

v.DARLEY.

No. 9645.

Supreme Court of Illinois.

Feb. 17, 1915.

Error to Appellate Court, Third District, on Appeal from Circuit Court, Morgan County; J. J. Cooke, Judge.

Judicial settlement of the accounts of Benjamin Darley, as administrator of the estate of William Darley, deceased. The proceeds of a life policy having been declared assets and ordered distributed to A. L. Hamilton and others, creditors of the estate, and such order having been affirmed by the circuit court and by the Appellate Court for the Third District (188 Ill. App. 229), the administrator brings error. Affirmed.

Ed. D. Henry, of Springfield, for plaintiff in error.

Wm. N. Hairgrove, of Kansas City, Mo., and Kirby & Wilson, of Jacksonville, for defendants in error.

FARMER, J.

This case comes to this court from the Appellate Court for the Third District by writ of certiorari. The question involved is the ownership or distribution of $2,000 arising out of a life insurance contract.

In August, 1907, William Darley applied for and received a policy of insurance upon his life in the Merchants' Life Association of Burlington, Iowa, a mutual assessment company. The wife of Darley was named as beneficiary in the certificate, but died before the death of the insured, and he thereafter caused his mother to be designated as beneficiary in the policy. The mother also died before the insured, and no other beneficiary was designated by the insured before his death. He left surviving him two minor children as his only heirs, for whom a guardian was appointed after their father's death. Darley was insolvent. His father was appointed administrator of his estate, and collected and receipted the insurance company for the amount of the policy, $2,000. A number of creditors of William Darley filed claims against his estate. Among them, A. L. Hamilton filed a claim for over $4,000 and Mary J. Caldwell a claim for $150.90. These claims were allowed as of the seventh class. The administrator filed his report in the county court, showing he had received the $2,000 on the insurance policy and that the estate had no other funds. The report of the administrator represented that the $2,000 collected on the life insurance policy did not belong to the estate of William Darley, but belonged to the children of the deceased, Winifred and Carl B. Darley.

The administrator asked the county court to enter an order authorizing and directing him to pay said $2,000 to the guardian of the children of William Darley and to discharge him as administrator. Due notice of the filing of the report and a hearing thereon was given to the creditors and all interested parties. A. L. Hamilton and Mary J. Caldwell appeared at the hearing and filed objections to the report, in which they denied the $2,000 belonged to the children of William Darley, and claimed that it was assets of the estate and required to be inventoried and distributed as such by the administrator. The court heard the objections and entered an order sustaining them, and directing the administrator to inventory the $2,000 as assets of the estate of William Darley and pay the same out on claims allowed against the estate, according to their class, as provided by statute. On appeal by the administrator to the circuit court, the judgment and order of the county court were sustained, and on further appeal by the administrator to the Appellate Court for the Third District the judgment of the circuit court was affirmed.

The Merchants' Life Association of Burlington, Iowa, is a mutual assessment company organized under the laws of the state of Iowa and licensed to do business in this state. William Darley resided in Morgan county, Ill., at the time he applied for and the policy was issued to him, and he continued to reside in this state until his death. Section 1789 of the Iowa Code authorizes the designation in the certificate or policy as beneficiaries of ‘the husband, wife, relative, legal representative, heir, creditor or legatee of the insured member.’ Article 15 of the charter of the Merchants' Life Association authorizes the designation as beneficiaries of ‘the husband, wife, relative, legal representative, heir, or legatee of such insured member.’ The policy issued to Darley contained the following provision:

‘In the event of the death of the beneficiary prior to that of the member, or in case none is named, the benefit then to be payable to the legal representatives of the deceased member.’

As we have above stated, the beneficiaries designated died prior to the death of the insured, and the determination of where the fund should go depends upon what construction should be given to the term ‘legal representatives of the deceased member.’

The plaintiff in error insists the term ‘legal representatives,’ as used in the contract, means heirs or next of kin. In Johnson v. Van Epps, 110 Ill. 551, the court, in construing the term ‘legal representatives' in a policy issued to H. B. Johnson by the Illinois Masons' Benevolent Society, which was made payable to the insured's wife ‘or the legal representatives of the said H. B. Johnson,’ said:

‘The doctrine seems to be well recognized that the words ‘legal representatives,’ when used to indicate those entitled by law to a decedent's personal estate, as was the case here, uniformly mean, where there is nothing in the context or surrounding circumstances to indicate a contrary intention, ‘executors and administrators.”

The court held that there was nothing in the policy or certificate or the surrounding circumstances to indicate that the expression ‘legal representatives' was used out of its ordinary and appropriate sense, or was intended to mean anything other than executors and administrators.

In People v. Phelps, 78 Ill. 147, the proceeds of a life insurance policy made payable to the insured's ‘legal representatives' were collected by the administrator. The widow and heirs claimed the fund, and the creditors claimed it as assets of the estate. The court said:

‘What construction shall be given to the phrase ‘legal representatives' depends upon the intention of the party using it. Warnecke v. Lembca, 71 Ill. 91 . It was competent, under our...