Tate v. Hain

• Decision Date: 26 April 1943
• Docket Number: Record No. 2649.
• Citation: 181 Va. 402
• Court: Virginia Supreme Court
• Parties: T. BRYAN TATE, TRUSTEE, ETC. v. CECELIA HALBERSTADT HAIN, ET ALS.

Page 402

181 Va. 402

T. BRYAN TATE, TRUSTEE, ETC. v. CECELIA HALBERSTADT HAIN, ET ALS.

Record No. 2649.

Supreme Court of Virginia, Richmond.

April 26, 1943.

Present, Campbell, C.J., and Holt, Hudgins, Browning, Eggleston and Spratley, JJ.

1. LIFE INSURANCE — Assignment of Policy — By What Law Governed — Case at Bar. — The instant case was a suit by a trustee in bankruptcy to recover payments due and to become due to the bankrupt under life insurance policies. The insured had exercised an election of an installment settlement which contained a paragraph that the beneficiary could not commute or assign or encumber any stipulated payments yet to be made. This settlement required that the amounts payable under the policies upon the death of the insured should be retained by the insurer and paid out in monthly installments to the beneficiary, the bankrupt, instead of in one sum. The policies were issued by a New York company and provided that payments to the beneficiary were to be made at the home office. Insured was living in Pennsylvania at the time of the issuance of one policy and in North Carolina at the time of the issuance of the others. The beneficiary was living in Virginia at the time of bankruptcy. A New York statute provided that when proceeds of insurance policies are left with the company under a trust or other agreement, the benefits accruing thereunder after the death of the insured should not be transferable nor subject to legal process, with certain exceptions.

Held: That whether the bankrupt could have transferred payments due her from the company was a question of state law.

2. CONFLICT OF LAWS — Contracts — Intention of Parties. — The true test for the determination of the proper law of a contract is the intent of the parties and this intent whether express or implied, will always be given effect except under exceptional circumstances evincing a purpose in making the contract to commit a fraud on the law.

3. CONFLICT OF LAWS — Insurance Contracts — Intention of Parties — Case at Bar. — The instant case was a suit by a trustee in bankruptcy to recover payments due and to become due to bankrupt under life insurance policies. The insured had exercised an election of an installment settlement which contained a paragraph that the beneficiary could not commute or assign or encumber any stipulated payments yet to be made. This This settlement required that the amounts payable under the policies upon the death of the insured should be retained by the insurer and paid out in monthly installments to the beneficiary, the bankrupt, instead of in one sum. The policies were issued by a New York company and provided that payments to the beneficiary were to be made at the home office. Insured was living in Pennsylvania at the time of the issuance of one policy and in North Carolina at the time of the issuance of the others. The beneficiary was living in Virginia at the time of bankruptcy. A New York statute provided that when proceeds of insurance policies are left with the company under a trust or other agreement, the benefits accruing thereunder after the death of the insured should not be transferable nor subject to legal process, with certain exceptions. The evidence showed that the insured did not intend that the proceeds of his insurance, so far as the beneficiary was concerned, should be dependent on the laws of any jurisdiction in which she might later reside or be domiciled.

Held: That the agreements between the insured and the company were made with the intent that the New York law should govern them and with reference to its statute affording an exemption, and although the transactions between the insured and the company might be regarded as creating a spendthrift trust, such trust was authorized by the New York statute and such statute was controlling unless it was so much in conflict with the public policy of Virginia that it would not be given recognition in its courts.

4. CONFLICT OF LAWS — Trusts — Public Policy. — Although the Virginia statute pertaining to trusts is one of public policy, it does not follow that the laws and statutes of another state to which the rights of the parties are subject will, for that reason, be disregarded.

5. CONFLICT OF LAWS — Comity — Reason for Denial. — There must be something immoral, shocking to one's sense of right, in order that comity be denied.

6. TRUSTS AND TRUSTEES — Validity — Necessity for Trustee Eo Nomine. — A trustee eo nomine is not essential.

7. CONFLICT OF LAWS — Bankruptcy — Law Governing Exemption. — Exemptions to be allowed a bankrupt are governed by the law of his domicile for six months, or a greater portion thereof, immediately preceding the filing of the petition. However, this applies to statutory exemptions and not to conventional limitations or restrictions upon the bankrupt's interest in or title to the property in question.

8. ASSIGNMENTS — What May be Assigned — Stipulations in Contract against Assignment — Life Insurance Policy. — Stipulations against assignment in contracts where the personal equation is not involved, are generally held not to apply to transfers by operation of law, but that is where the stipulation is embraced in a two-party contract. So far as the title or interest of one of the parties in the fruits of the contract is concerned, there can be no limitation by contractual agreement upon them that will affect their transfer by operation of law. But in a contract where three parties are involved, such as, a contract of insurance, if the applicable law permits, the insured can dispose of the benefits of his contract, upon such terms and subject to such restrictions as will prevent its transfer by operation of law.

9. STARE DECISIS — Decision of Coordinate Courts. — The judgment of a court of coordinate jurisdiction, until reversed by a superior court, perhaps should be followed by other courts of equal dignity in the same state, especially when a writ of error is denied by the appellate tribunal. This is only true, however, when the facts are similar. The denial of a writ of error may grow out of many reasons. And it is only when exact similarity of facts is beyond dispute that it is entitled to weight.

10. CONFLICT OF LAWS — Insurance Contracts — Assignments — Case at Bar. — The instant case was a suit by a trustee in bankruptcy to recover payments due and to become due to bankrupt under life insurance policies. The insured had exercised an election of an installment settlement which contained a paragraph that the beneficiary could not commute or assign or encumber any stipulated payments yet to be made. This settlement required that the amounts payable under the policies upon the death of the insured should be retained by the insurer and paid out in monthly installments to the beneficiary, the bankrupt, instead of in one sum. The policies were issued by a New York company and provided that payments to the beneficiary were to be made at the home office. Insured was living in Pennsylvania at the time of the issuance of one policy and in North Carolina at the time of the issuance of the others. The beneficiary was living in Virginia at the time of bankruptcy. A New York statute provided that when proceeds of insurance policies are left with the company under a trust or other agreement, the benefits accruing thereunder after the death of the insured should not be transferable nor subject to legal process, with certain exceptions. The evidence showed that the insured did not intend that the proceeds of his insurance, so far as the beneficiary was concerned, should be dependent on the laws of any jurisdiction in which she might later reside or be domiciled.

Held: That the payments due from the insurance company to the bankrupt and those to become due during her lifetime did not pass to the trustee in bankruptcy, but any installments remaining unpaid at her death would pass to the trustee in bankruptcy.

Appeal from a decree of the Corporation Court of the city of Danville. Hon. Henry C. Leigh, judge presiding.

The opinion states the case.

Brown & Garrett, for the appellant.

Crews & Clement and Meade & Talbott, for the appellees.

PER CURIAM.

The opinion of the trial judge, which follows, sufficiently states the issue and the reasons which support the decree complained of, and, therefore, it will be affirmed.

"The Metropolitan Life Insurance Company, its Home Office being in the City of New York, issued four policies of insurance on the life of Joseph Halberstadt, all providing that payments to the beneficiaries were to be made at its Home Office.

"No. 830032-A was issued on March 22, 1912, had a face value of $2,000 and was payable to Joseph Halberstadt on the 22nd day of March, 1969, if he were then living, and if not, to Bessie Halberstadt, his wife. Application for this policy was made at Philadelphia, Pa., where the insured then resided. The record is silent as to whether it was delivered to insured in that city, and as to what acts were done there to complete the execution of the contract. I infer, however, that in accordance with the usual custom of insurance companies, the policy was sent to Philadelphia and there delivered to insured by some representative of the company upon payment of the first premium.

"No. 5081321-A was issued on September 28, 1927, had a face value of $5,114, and was payable to Bessie Halberstadt, wife of the insured. Application for it was made at Belhaven, N.C., where the insured then resided and was domiciled. Premium receipt covering the first premium was countersigned by one, Noble, `Agt.,' and it appears that this was done in North Carolina, since the policy was handled through the Washington, N.C., District.

"No. 5815807-A was issued on May 16, 1929. It provided for one payment of $28.65 to the insured, if living, on the 16th day of May, 1968, and for two hundred and thirty-nine monthly payments thereafter of like amount, or upon his death for like...