In re Estate of Hallbom
| Decision Date | 21 February 1930 |
| Docket Number | 27,721 |
| Parties | IN RE ESTATE OF JACOB E. HALLBOM; EDWARD A. PAGEL, APPELLANT |
| Court | Minnesota Supreme Court |
Edward A. Pagel as administrator of the estate of Jacob E. Hallbom appealed from a judgment of the district court for Kandiyohi county, Baker, J. reversing an order of the probate court allowing his final account. Affirmed with directions.
Regulations promulgated by authority of federal government.
1. Rules and regulations prescribed by a department of government in pursuance of statutory authority have the force of law.
Distribution of war risk insurance after death of beneficiary.
2. Proceeds of war risk insurance policy held payable after death of beneficiary to estate of insured for distribution to such persons then living who are within the permitted class of beneficiaries described in the act as would be entitled to insured's personal property under state laws in case of interstacy; and that such persons take as beneficiaries and not as heirs at law.
Probate court without exclusive jurisdiction.
3. The determination of the parties who are to receive such money is not in the first instance exclusively for the probate court but may be determined by the district court when the question arises therein.
United States, 39 Cyc. p. 703 n. 88.
See note in 55 A.L.R. 580.
Charles A. Swenson, for appellant.
L J. Van Fossen and Orin M. Oulman, for respondent.
Jacob E. Hallbom was a soldier in our army in the World war. While in foreign service he took out a policy of war risk life insurance in the sum of $10,000, naming his father, Peter J Hallbom, as beneficiary. The insured died October 20, 1925. The father and his wife, Selma Hallbom, the mother, survived. The insurance was awarded to the father payable in 240 monthly payments, and the war veterans bureau continually made these payments until the father's death on February 22, 1928. The father was survived by his said wife and several children, who were brothers and sisters of the insured. Edward Pagel was then appointed administrator of the soldier's estate, and as such he was paid $9,116, the commuted amount of the policy.
The insured left creditors whose claims were allowed against his estate in the sum of $3,791.38. The assets of the estate, excluding the $9,116, were insufficient to pay the expense of administration and the creditors. The administrator, realizing that interested parties were opposed to the insurance money being used for such purposes, filed for approval a final account, in which he proposed to so use such money. The probate court approved the account. Selma Hallbom appealed to district court, and that court held that (1) the administrator was only a trustee of the funds; (2) the money was not subject to the claims of creditors; (3) that probate court should ascertain to whom the money was to be paid; and (4) that the order of the probate court allowing the final account was reversed. Judgment was entered. The administrator has appealed from such judgment.
The act of October 6, 1917, provides for insurance "in order to give to every commissioned officer and enlisted man * * * greater protection for themselves and their dependents." 40 Stat. 409, c. 105, § 400. This purpose is reaffirmed in the act of June 7, 1924, 43 Stat. 624, c. 320, § 300; 38 USCA, 245, § 511. It was restated in the act of March 4, 1925, 43 Stat. 1308, c. 553, § 12.
The act of June 7, 1924, provides that the insurance shall not be subject to the claims of creditors of any persons to whom an award is made; and shall be exempt from taxation. 43 Stat. 613, c. 320, § 22; 38 USCA, 217, § 454.
The policy issued in this case contained an indorsement, "Important Notice," under which it was stated:
"This insurance * * * is not subject to the claims of the creditors of the insured or of the beneficiaries."
The statute authorizes the department to make rules and regulations to carry out the purposes of the law.This has been done. They provided that:
"If no beneficiary within the permitted class be designated by the insured * * * or if any above designated beneficiary * * * does not survive the insured, the insurance (or if any above designated beneficiary shall survive the insured, but shall not receive all the installments, then the remaining installments) shall be payable to such person or persons within the permitted class of beneficiaries as would under the laws of the insured's place of residence be entitled to his personal property in case of intestacy." Bulletin 1, p. 4, issued October 15, 1917.
The application for insurance, which is made a part of his contract of insurance, provides:
"In case any beneficiary die or become disqualified after becoming entitled to an installment but before receiving all installments, the remaining installments are to be paid to such person or persons within the permitted class of beneficiaries as may be designated in my last will and testament, or in the absence of such will, as would under the laws of my place of residence, be entitled to my personal property in case of intestacy."
The insurance is payable only to a spouse, child, grandchild, parent, brother, sister, uncle, aunt, nephew, niece, brother-in-law or sister-in-law, or to any or all of them. 38 USCA, 245, § 511.
"If no person within the permitted class be designated as beneficiary * * * by the insured either in his lifetime or by his last will and testament or if the designated beneficiary does not survive the insured or survives the insured and dies prior to receiving all of the two hundred and forty installments or all such as are payable and applicable, there shall be paid to the estate of the insured the present value of the monthly installments thereafter payable, * * *.
"When any person to whom such insurance was awarded prior to such date dies or forfeits his rights to such insurance then there shall be paid to the estate of the insured the present value of the remaining unpaid monthly installments of insurance so awarded to such person." 38 USCA, 252, § 514.
The foregoing provision is by the statute made effective as of October 6, 1917.
We thus come to the point where the money became payable to "the estate of the insured." That has been done. The administrator has received the money. Is it an asset of the estate for use as such or is it property belonging to certain beneficiaries and merely held by the administrator in trust?
1. The rules and regulations prescribed by a department of government in pursuance of statutory authority have the force of law. Cassarello v. U.S. (D.C.) 271 F. 486.
2. If the insurance in such a case as this is to become a part of the estate and as such go to the heirs at law it will frequently go to persons outside "the permitted class." It would also be liable for the payment of debts though the act specifically provides otherwise. This insurance was never provided for the benefit of creditors. It was expressly designed for the service man and his next of kin dependents. Having in mind the repeatedly expressed and obvious purpose of the act, we are of the opinion...
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