Jackson v. Fisher

Decision Date22 March 1961
Docket NumberNos. 24958-61,s. 24958-61
Citation11 Cal.Rptr. 801
CourtCalifornia Court of Appeals Court of Appeals
PartiesEllis R. JACKSON, individually, and doing business as Jackson Supply Company, Plaintiff, v. Jack FISHER, individually, et al., Defendants. Jack FISHER, Appellant, v. GLOBE INDEMNITY COMPANY, Assignee of Ellis R. Jackson, Plaintiff and Respondent. GLOBE INDEMNITY COMPANY, a corporation, Plaintiff and Respondent, v. Jack FISHER, individually and doing business as Jack Fisher Company, et al., Defendants, Jack G. Fisher, Appellant. AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, a corporation, Plaintiff and Respondent, v. Jack G. FISHER, also known as Jack Fisher, individually and doing business as Jack Fisher Company and or a co-partner in Fisher & Stokes Construction Company, a co-partnership, et al., Defendants, Jack G. Fisher, Appellant. CONTINENTAL CASUALTY COMPANY, a corporation, Plaintiff and Respondent, v. Jack G. FISHER, also known as Jack Fisher, individually and as a co-partner in Fisher and Stokes Construction Company, a co-partnership; Shirley Stokes, Vivian V. Ellis, et al., Defendants, Jack G. Fisher, Appellant.

George E. Danielson, Walter M. Campbell, Thomas T. Johnson, Los Angeles, for appellant.

Anderson, McPharlin & Conners, Los Angeles, for respondents.

ASHBURN, Justice.

These four cases were heard together in the lower court and are presented in the same manner here because they involve the same law point--whether the proceeds of a certain insurance policy are exempt to defendant Fisher under § 690.19, Code of Civil Procedure.

In October, 1958, Fisher sold to H. F. Stokes his contracting business and the assets thereof and Stokes agreed to obtain a life insurance policy for $100,000, plus double indemnity, payable to Fisher to the extent of any unpaid balance of purchase price. The policy was obtained from Occidental Life Insurance Company and the beneficiary was named as 'Jack G. Fisher, creditor, as his interests may appear; balance, if any, to Shirley Lee Stokes, wife of the insured, if living.' Stokes died, and at that time the unpaid purchase price was $119,211.63. The annual premium was $883, and $500 is 56.6 per cent of $883; the proceeds of the policy (including double indemnity) were $200,000, of which 56.6 per cent is the sum of $113,200. Stokes left surviving him a spouse and minor children.

Each of these four plaintiffs, Ellis R. Jackson, Globe Indemnity Company, a corporation, American Casualty Company of Reading, Pennsylvania, a corporation, and Continental Casualty Company, a corporation, sued Fisher and attached the proceeds of the policy and then pursuant to judgment levied execution upon the same. Fisher in April, 1960, claimed an exemption to the extent of $113,200. The claim was opposed by each of these judgment creditors and was disallowed. Fisher appeals from each judgment and the sole question in each case is whether the claim of exemption should have been allowed.

Section 690, Code of Civil Procedure, says: 'The property mentioned in Sections 690.1 to 690.25, inclusive, this code, is exempt from execution or attachment, except as therein otherwise specially provided, when claim for exemption is made to the same by the judgment debtor or defendant as hereinafter in Sections 690.26 provided.'

Section 690.19: 'All moneys, benefits, privileges, or immunities, accruing or in any manner growing out of any life insurance, if the annual premiums paid do not exceed five hundred dollars ($500), or if they exceed that sum a like exemption shall exist which shall bear the same proportion to the moneys, benefits, privileges, and immunities so accruing or growing out of such insurance that said five hundred dollars ($500) bears to the whole annual premium paid.

'In addition to the foregoing, all moneys, benefits or privileges belonging to or inuring to the benefit of the insured's spouse or minor children growing out of life insurance purchased with annual premiums not exceeding five hundred dollars ($500), or if such annual premiums exceeded that sum, a like exemption shall exist in favor of such persons which shall bear the same proportion to the moneys, benefits or privileges growing out of such insurance that five hundred dollars ($500) bears to the whole annual premiums paid.' The second paragraph was added by amendment of 1947.

It should be noted that § 690 is general in its terms and applies to any 'judgment debtor or defendant'; that the first paragraph of § 690.19 applies to '[a]ll moneys, benefits, privileges, or immunities, accruing or in any manner growing out of any life insurance,' while the second paragraph, '[i]n addition to the foregoing' provides a like exemption for 'the insured's spouse or minor children.' Plainly, the section on its face provides a general exemption in favor of any attachment defendant or judgment debtor with respect to insurance purchased with the first $500 of premium, and an additional exemption in favor of the family with respect to the coverage purchased with the second $500 or part thereof.

The Attorney General so ruled in 14 Ops.Cal.Atty.Gen. 50. Discussing the effect of the 1947 amendment he said, at pages 52-53: 'Analysis of this statutory history shows clearly that the Legislature was willing to increase the amount of life insurance money, benefits and privileges which are exempt from execution and attachment so long as the amount of the increase was for the sole benefit and protection of the insured judgment debtor's or defendant's spouse or minor children. On the other hand, the benefits of the already existing exemption, which under certain circumstances could be availed of by persons other than the insured's spouse or minor children, remained the same as before. * * * Further, a married insured may hold as exempt property life insurance whose annual premiums do not exceed $500 and which inures to the benefit of strangers, plus an equal or greater amount measured in the same fashion which inures to the benefit of his spouse or minor children, provided and only to the extent that the total of all does not exceed an amount represented by annual premiums of $1,000. But, if the insured has no spouse or minor children, the total of life insurance exempted would be that covered by annual premiums not to exceed $500. And, if the insured has no spouse or minor children, but all life insurance held by him inured to the benefit of other persons, the total exemption would be that accounted for by annual premiums not to exceed $500.' This seems to be eminently sound.

Respondents' position is 'that the provisions of Section 690.19 of the Code of Civil Procedure and intended to exempt the proceeds of insurance from the claims of the insured's creditors and from the claims of the creditors of the insured's family, when the insured's family is the beneficiary of such insurance, or when the proceeds are set aside to the family, in probate, as exempt property.' In other words, respondents claim that the exemption can inure only to the benefit of the family of the insured, never to his creditors if there is a family. This is in the teeth of the statute.

'[L]iberality of construction should not go to the extent of doing violence to the terms of the statute.' Wade v. Rathbun, 23 Cal.App.2d Supp., 758, 760, 67 P.2d 765, 767. 'While the statute should be liberally construed, it has been held that construction should not be indulged in to the extent of conferring pribileges and benefits by construction which were not intended to be conferred by the Legislature,...

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