Opinion
Hearing Granted May 17, 1961.
Opinion vacated 14 Cal.Rptr. 439.
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 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 '[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, or to the extent of doing violence to the terms of the statute.' Conlin v. Traeger, 84 Cal.App. 730, 734, 258 P. 433, 434. 'These decisions are in accordance with the general policy of the courts of this state to give a liberal construction to exemption statutes in favor of the debtor. * * * It follows logically that this same policy requires a strict construction of any provisions which tend to limit the exemptions elsewhere in the statute extended to the debtor. In 25 Cor.Jur. 10 (par. 8), the rule is thus stated: 'Conversely to the rule of liberal construction of the grant of an exemption, provisions which limit or take away the exemption are strictly construed, whether in provisos and exceptions or in amending statutes.'' Los Angeles Finance Co. v. Flores, 110 Cal.App.2d Supp. 850, 854, 243 P.2d 139, 142.
21 Cal.Jur.2d § 3, page 509, says: 'Ordinarily, only the debtor can assert a claim of exemption from execution.'
Prudential Ins. Co. v. Beck, 39 Cal.App.2d 355, 360, 103 P.2d 241, 243: 'Section 690.19 of the Code of Civil Procedure exempts from execution or attachment 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. That the purpose of the section is to protect the beneficiary as well as the insured is indicated by decisions that the insurance proceeds in the hands of the beneficiary, to the extent that the annual premiums have not exceeded $500, are exempt from execution for debts of the beneficiary. [Citations.] The plain meaning of the unqualified language of section 690.19 is also to exempt such proceeds in the hands of the beneficiary from the debts of the insured.' 39 Cal.App.2d at page 361, 103 P.2d at page 244: 'There is nothing in section 660 of the Probate Code, cited by respondent, that in any way affects this case. That section provides that in probate, exempt property, in the discretion of the court, may be set aside to the widow and minor children. Section 690.19 of the Code of Civil Procedure contains no such limitations. Where a policy is payable to a named individual, its proceeds do not pass through the estate of the insured. In such event the provisions of section 690.19 compel, without limitation, the exemption from liability for the insured's debts and those of the beneficiary, of insurance benefits to the extent that the annual premiums do not exceed $500. The benefits of this section are not limited to the widow and children.'
Because the question there under consideration was fraud in the assignment of the policy by the insured, counsel for respondents at bar claim the foregoing language was dictum or arguendo. We think not. If it is, it reflects the same views as other cases dealing with the effect of the same statute.
In Bowman v. Wilkinson, 153 Cal.App.2d 391, 314 P.2d 574, Mrs. Wilkinson, the defendant, was the named beneficiary of the policy and received the proceeds as such. Judgment having been obtained against her she claimed exemption under §§ 690.19 and 690.20. At page 395 of 153 Cal.App.2d, at page 576 of 314 P.2d the court said: 'Mrs. Wilkinson was the beneficiary under the Metropolitan Life Insurance group policy, Holmes v. Marshall,
In Howard v. Howard, 166 Cal.App.2d 386, 333 P.2d 417, it was claimed that the exemption statute did not apply to claims for alimony or child support. In ruling to the contrary this court said, 166 Cal.App.2d at pages 387-388, 333 P.2d at page 418: 'It is plaintiff's position, however, that as exemption statutes are created for the benefit of the husband's family as well as for himself, such statutes do not apply against claims for alimony or child support. There is nothing in the exemption statutes involved in this appeal which lends support to this position. * * * Furthermore, section 690 of the Code of Civil Procedure provides in clear, unambiguous, and unmistakable language that the only exceptions to the exemptions provided by sections 690.1 to 690.25 are those which are specially set out in those sections themselves.
'In order to sustain plaintiff's position, it would be necessary for this court to either rewrite sections 690.22 and 690.23 or to disregard section 690. This court may do neither. Any changes to be made with respect to these sections must come from the legislature. The courts may interpret but not rewrite statutes.'
The judgment in each of the above named and numbered cases is reversed.
FOX, P.J., and McMURRAY, J. pro tem., concur.