        OFFICE      OF THE        AlTORNEY        GENERAL      OF TEXAS
                                         AUSTIN




1940, bwbiah
on the queatlo

                                                  o r th elatata     of




                       qurrtion        now ariaor    whether    or   not
        the lxooutor    is rornot            la r ep o r ting
                                                           o nly
        a a e-h 4o lff th eU16RRt*a

                 Sh ep o o eo dro f llte laaunaoe p o lio lo w
                                                             rer e
mrb     brublr      under the blur  Inhoritaaoo Tsx Law br th
?Oorl~4~zth        I*girl~tlu* &l lW9. Attlole 9ll9 OS the Ro-
riroa     ClVll st4tRt.l.           a0 a0 amuld,        now roadl,        Lo part
40 iOl.lOWS J
Eonoz=blo        0.0%.    II.    BhopprU,     paa.    8




                 aAll propartr within the jurl8dlotloa o’?
        thlr     mato,  real  or glr8ona1,oorponto or
        lnoorporrto, mad Oar latorert thoroln, laolud-
       lzu ropartrparrlag wda r l     aonl power   of
       lppo& taut lxrrolrsd br tha r *codoat br  ~111,
        laoludlag        thr    p0080a8     of llfo       larurrao~   to
        the    rrtent                        br the
                          of the amouat noelnblo
        waoutor or rdminlrtrrtor a8 lnrurum andot
        polloier taken out br the drordoat upon  hla
        owa llfo, md to th8 lrtoat of the 0x0088 over
        Party ‘Ihoumnd Dollan ($40,000) of the amount
        rooriveblr by all other kneflohrlar  aa larur-
       a80       w&or polloirr taken out by the drordoat
        open hi8 own lit.,           whothrr brloaglcy          to lnhnbl-
       taatr of thlr Stat0 or to prrow who are not
        lnhabltaatr, regardlo     of whather ruoh property
       18 loo&O6 within or without tklr star,       whioh
       8hall pa88 lbrolutoly or in trurt by will or
       by tho law8 of doroent or dl8trlbutlon of thlr
       or a~ other 8kt0,      or by a00d, grant,  8810,
       or @rt  DDE   or tnt0lldrd to uk8 *mot in
       pO88orrloa or la jo y m after
                                  r nt th8 drath or th,
       grantor or doaor, ahall, upon prrlm       to or
       for the u80 oi 8nj person, oorpormtlon, or l8-
       roolatloa, be rubJ8ot to a tax for the benorlt
       of the strte*e General Rennw mad, la aocord-
       ano, with the iollowing ola8slfloOtlon . . . .a
               ma rb o larllr 8a8n from th8 prooroding wti-
                 It
olb   that     tha tax 1s barma oa tbamountor propert that
pS88M. A p&rratlT the lxooutor 18 ouklag tin oontentlon
that only b ,661.a ot llfo inrurm.iooproorrda psrod at
the dorth of the dooedent.      Itrldeatlythe executor 18 tak-
ing the porltloa that th@ 0th8r hali did not purr at th
bath of d80Oa8te beoaurr the 8~        ~08 tha rir0.8 halt or
the oommunltf property    due to tha hot t&t the prualtana
oa tho poll0108 he& b8rn pal6 out of oomunlt~ iundr.
Oa the other haad, ii the rntlro 99,SSt.M       of lnrurlnor
prooooti prrrardto tha banrilolart*Ila,bparato property
Of the horband mad aot ~8 Oomialt~ pro rty of both
8pou880, th8a th alx~outor8~ooatontloa      E thlr rarpeot
murt b0 0v0rti8a     rad the entin   larountor insuraaor pm-
ored would bo 8ubjrot to th8 hxaa       Inharltanoe RX.
8tatrd  la another want,if the total proooeda of the poll-
oler 80 to thr bwwlolarler named therein netrubjeot to
mmnblr      OOOr(@ lL Shapmrd, pqo                    8


8ar lloa or olrla ot th8 wlto, thrn moh total pr0000b0
h8t. ~88.6  rt the death of Ueordont and we taxable under
our mu8 Iah8rltano* mx.
            It  a8 l -11         ratthd         ?Uh       Of 18w   in thh     Stat.
thbt   wharo aa  laaunaoo         poll07
                                  la taken out oa the life
or 001 ot   tha  8~0~808,rt the drath o? tha   perroa 80 la-
wn&    tha  proOaed8 of 8uOh polloy bolou to tha beaotlolrry
anamd therola, won though tho pronlum8 on th8 polioy w8ro
*id  with ooamoaitf   flllld8,ThiS Nh     WI8 8anoUao86 by th#
Su?rM8     OoWtOf T,#S in thr 0880 Ot X@rtiA T* &!OAll18tSr,
et al, 6s 8. w. et4. Th8 oourt ia 8a opinion wrlttra br
fU8tiOO BrOm 8tat.d l# tOiiOW8~
            -It   18 oont,ndod by the brt@ndMt@     in or-
       ror the   tin hUSb#lrd oould not appropr1at.ethe
       OOmmUnit)r iUlld8 to hi8 Own U8. 1n th8 puraham
       Of thir OOntrsOt without tho OOASOAt O? hi8
       Wit@: but OUT Statuta S~Oiall~     prOtid88   t.hat
       the hurbaad Shall hrv0 the 8018 rbht O? ooa-
       trol or the ooaunualt~property, and it ha8 bean
       unlroral~ hold that luah oontrol onmot be in-
       t~ertrrrdwlth ~11.88 it 18 8X8~Oi8~d in fraud of
       the ri@t8    Of the Wl?O. FM. St. Art. g9be~
       Strmlar    1. Cm, 15 mx. glb. Wo 800 DO ground
       tn the ?aOt8 O? thi8 dll88 to impraSh the action
       of the hU8b-d a8 trrudulbat tOwar hi8 ti?Or
       Th8 right to t& proaootla of the polloy, whether
       upen thr li?. o? tho wit. la favor ot the hU@-
       band, or upoa the llfa 0r the buSband la favor
       Of th. WirO, ~##t# UQOa tha 8USl8 PrinOiple, whloh
       18 t&t    th# prOOwa8 Of the WllOy     bOlO=   t0 th
       prroa      naaed   a9   payee,     rad    lt   beOO&OS       roxmrty
       upoa thr 0ontlnSenoy o? the aaath or t1 0 insured
       ill th8 ii?Otiar@Of rho &f4y,O. m#rOfOre,   a8 it
       oould  not lmoonm tho property of tha husband or
       the WiiS during the lltotlae of both of them, it
       OMaOt   be hold to be a0mawit.y QrOpertY, ud 18
       thareror0  tha rrparatr propstir 0r thr one to
       whoc it 18 mad.  payable.'
           Thl8 rule of law Laid dowa br tha 8UprOa8 Court
-8  rg8la lnno wo .4by th8 Baa Antonio CO-t O? CiTil Ap-
&Ml@ la the 0880 O? fOn88 1. JOAM, 146 9. W. 265.     Tbr
COUrt Stat.6   88 fO11OW8;
aoaorable Ooorge g. Sheppard, page 4


             -our Suprrmo court, la the 0880       0s Kar-
      tin v. YoAlll8trr, ha8 held that        when lanuranae
      18 takrn upon the iire 0r tha wlfr, payablr to
      the haband, and pmnluni8 pnld out of th8 oom-
      #unity fUA68, thr jWOfJWd8       of the  polloy beoome
      the rrparato proportr     of tha hwbrsd.      Thr oourt
      Stated that   it 8RW Do @‘ound IA thr ?&OtS of the
      oar0 to lapoaoh the lation 0i the hU#biUJda8
      rnuaulsat   toward8   hi8  tifr,   and announord the
      dootrlne that, 80 the prooasaa or a plloy upon
      tho iire or thr hu#band or wire aould not booomo
      thr Froperty of llth o rduring the llretime of
      both of them, It oannot be hold to bo ooziaunlty
      property, and 18 thorrtora the #~~lWt# property
      Of th8 On0 to whm it 18 pbyRbl8.”
            Tha lulr oi law whloh prooludra the wlro from
SollOWlng the prOOar    0i the ln8uranoe polloy and recover-
ing rgainrt tha sarm baaaus8 oonitzunlty?unclswere expen@ad
la the payzaentr of the pronluma was announood by the Toxar-
kuia Court of Olrll Appeals in the oaso or l?orthwostorn
Utual Llf8 Ineuranoo Ooqany v. Whit88rllo, 18@ s. W. 22.
Thr   court   8tataa   a8   fOllOWOJ

                "In Rowlett v. Xitohell, 52 Tox. Clr. App.
       589,    114 S. W. 845, lt wad hold that, la the
       abaono8, aa waa the aaa8 bore, or rrsud on the
       prt Of the hurband, the w1t0 aannot SOllOw and
       rooovor     oommualty fIJIId@ 0xpnd0a by him la pre-
       miuma    on  aa lnaur.;.nco      polloy on hi8 iif8 for th8
       bwmrit 0s other             per8on8. It 18 plain, therorore,
       t&t     Carrlo 8. shook ~a8 not lntitloa to r eo o vo r
       of lalntltf in error booaua8 oonolunltyrunds were
       US. x by J.    0. Shook berm          @hewas dlrorcad fro;;
       him la paying pralumr due on the polloy.*
           Thr cO1!~ib8iOa 0s Apmalr 0s Taxar a?:lrmed the
 OaSO Of Whit880~1. 1. tiorthwrater'n
                                    Yutual Llfr Insurance
 caqany in 221 8. w. 595. ma CmMt ltatoa the S&X rule
 of law t&t war rnnounord by the Ccat o? Civil   Appeal8 la
 the following laoguagrl
             *The use of aomraunltyfund8 in plpmnt
        0s pr8nAuau for lnrurnaor upoa tha iit0 or
        on* 890u80 la rator 0s the othrr 4008  aot,
8onorablr oaorgr   R. Shrppara, page 5


     in th rlb8enoo 0s mud, oreatr la the oopcun-
     ',~~dtharl2ht to rol&burrownt for th8 fUAd8  80
            Yartln v. YaAlllrtrr, 94 'hx. 869, 63 6.
     W. di4, 85 L. 8. A. 585. . ."

          fha rule o flaw lnnounood     in those other aasoa
+a# reaently StatOd by the Mrt Worth Court or Clvll Ap-
  ala b thr oaao or Rln v. IMa, 98 8. 1. (24)        1226,
Twrit of error  dl8rl8rrd by the    Buyrtmir Oourt). Tho Court
rtakd 418fOilOW81
          *Vo bellero it clear that thr liio in@Ur-
     an00 p01101~8 that were made payablr to the
     detradaat~8   ortat   were   Jilr   reparato   property,
     ia whloh the ommunlty l8tet8 oould  hare no
     lntorert, llther legal or egultablm. Kartin
     V. XOAll:St~r, 94 Tw. 569,  53 8. U. 524, 56
     L. Rd A. 5851 Jonor V. Jones (Srx. Clr. App.)
     146 8. W. 265.
           *In whltor~llr f. Northwestern IiUtUalLl:o
     Ina. Co. (nx.   Corn. APR.) Ml 9. 1. 695, 575,
     it WaS 8pOifiO8iay hid that     ‘th@ U88 Of aO?fi-
     nunlty fund8 la payment 0s prrmiuni8for insuranor
     ugcm the iire 0s one rpousr in favor or the other
     do.8 not,  in the ab8onor 0s fraud, orente la tho
     comunlty the right to relsburrementfor tho
     fund8 80 U8ed.’   And furthorr *R@O0ver7 upon
     th8 rertaiU:Ugground, aaml7, that th8 OaSh 8Ur-
     maeor value or the pollay at the date of the
     ailOrO8 vb8 OOmIaun~typOparty, a One-half in-
     torrat in uhloh -8 doorood   la the Wl?O, 18 p8-
     oludrd uadrr thr deol8lon In Batoh v. Eatoh (35
     Tax. Cit. App. 373, 80 5. W. 4111, in whla'.a
     writ or arror war donird.**
               27 w?17Of OOnOiU8iOA, it 18 a WOii S~ttitIdrti8
0s   law 0s th18 Btatr that     in a oasr auah a8 you pn8ent ln
your   Inquiry     th8 proare&   0s thr 1~8Ul%llO~ poll07 on th8
lit0 0s the iaOOa8.d rpouse are payable to tho bonoflola~
-a       thonla in@ from any olalicthat tha runlr1ag         apour
might hare agalnrt thr 8a1ra due to the faot that the pn-
&h&8 war. 9eld out Of OOmiunity fund@.           ThiS bedI& tXW
the lntlr8 (99JS2.02        of ll?a in8UrtXlC6 ptoOoed8 p88&     to
thr brnorlclazy on tho death or dooodent and the ontlre
                                                                     301
gonorablr Oeorge H. Sbopprd,      p&o 6


ai~ouat     or lire lalruranoe proceed8 80ula tbereron b rub-
joot   to tbo tax i~pored tbereoa by Art1010 7117, 8upra.
me   rorult     bore rnnouaord    hoverer, rould or oourm    be
rubjeot to tb8 $40,000 deiuotlon         ot inrururoa proaeedr rl-
lowed wader the kmB          or 8UOh Artiol**
