Sanders v. Insurance Co. , 95 S.C. 36 ( 1913 )

I concur with the Chief Justice for the reason that the statute provides that the trustee in bankruptcy shall take "(3) powers which he (the bankrupt) might have exercised for his own benefit but not those which he might have exercised for someother person." It is beyond question that the bankrupt might have exercised this right for some other person. He did. The rule of statutory construction is that where there is a conflict between two provisions of a statute, the last shall govern as the last expression of the legislative will. So it seems to me that where circumstances throw a case under the last clause, then the last clause must govern. Inasmuch as the statute distinctly says that the power which he might have exercised for some other person shall not go to the trustee, the Courts have no right to award these policies to the trustee. If we do, we violate the terms of the act. If Congress had intended to confine the exemption to those powers that the bankrupt might have exercised exclusively for others, it was easy to have said so. The proviso to item (6) treats of policies payable to the bankrupt or to his estate and made no other provision as though it had exhausted the subject. It is difficult to see how a policy that has no cash surrender value and not payable to the bankrupt or his estate, passes to the trustee. The intention is to save the insurance, not to destroy it. Item (5) does not control item (3), however, as item (3) is a special provision and item (5) is a general provision.

State ex rel. Lyon v. Bowden, 92 S.C. pg. 401: "But even if the two provisions were inconsistent no principle of construction is better settled, both by authority and reason, than this: Where, in a legislative enactment, a special provision is made as to a subject which would otherwise be embraced in a general provision on the same subject the special provision is held to be an exception, and not intended to be embraced in the general provision."

Whatever we may now think of the propriety of allowing a debtor to take money that ought to go to his creditors and with it buy life insurance for the benefit of his family, and allow the family to collect and enjoy the proceeds of the policy to the entire exclusion of the creditors, even from that portion represented by the premiums paid, still the law is too well settled to doubt its existence or escape its consequences except by statutory enactment. Here the enactment is the other way.

Again the trustee must take the required steps to change the beneficiary before he can claim the proceeds of the policy.

In Deal v. Deal, 87 S.C. pg. 395, it was held that a strict compliance with the terms of the policy are necessary before a change in the beneficiary can be enforced. Here there was no effort to change the beneficiary during the life of the insured, and now that the rights of the beneficiaries have become absolute by the death of the insured, the trustee asks that without a change of beneficiary, even now, the proceeds be paid to him, and I do not think it can be done. Under the law of South Carolina these policies are payable to the beneficiaries named in the policies, and I do not see that the Federal statute is in conflict. If these policies had cash surrender value, say one hundred and fifty dollars, the trustee would have been entitled to the one hundred and fifty dollars, but as they had no value, the trustee claims to be entitled to fifteen thousand dollars. I can not think the claim can be allowed, and concur with the Chief Justice.