Cluck v. Mack, 5--6095
| Citation | 489 S.W.2d 8,253 Ark. 769 |
| Decision Date | 15 January 1973 |
| Docket Number | No. 5--6095,5--6095 |
| Parties | Charles Donald CLUCK et al., Appellants, v. Margaret Ann MACK et al., Appellees. |
| Court | Supreme Court of Arkansas |
C. W. Knauts, Piggott, Davis, Plegge & Lowe, Little Rock, for appellants.
Lee Ward, Piggott, for appellees.
Appellants The First Pyramid Life Insurance Company of America and Charles Donald Cluck appeal from an order of the trial court awarding $667.12 of dividend accumulations on a life insurance policy to appellee Margaret Ann Mack, a judgment creditor of appellant Cluck. For reversal appellant Cluck contends that the funds are exempt from judicial seizure by Ark.Stat.Ann. § 30--208 (Repl.1962). Pyramid Life complains that the trial court erred in not allowing it, as an interpleader, an attorney's fee and in denying certain costs.
The record shows that Cluck had purchased from Pyramid Life a life insurance policy containing a special dividend provision for the tenth year distribution of accumulated dividends at the option of the policyholder. After Cluck elected to receive the dividends, appellee as a judgment creditor caused a writ of garnishment from the Circuit Court of Clay County to be issued on Pyrmid Life before the end of the policy period. Another garnishment was subsequently issued out of the Chancery Court of Clay County upon a joint judgment due appellee and one Blanche L. Cluck. This present proceeding developed when Pyramid Life filed a statutory interpleader action, Ark.Stat.Ann. § 27--816 (Repl.1962).
The exemption of proceeds of life insurance funds from judicial process is set forth in Ark.Stat.Ann. § 30--208 (Repl.1962) as follows:
'All moneys paid or payable to any resident of this state as the insured or beneficiary designated under any insurance policy or policies providing for the payment of life, sick, accident and/or disability benefits shall be exempt from liability or seizure under judicial process of any court, and shall not be subjected to the payment of any debt by contract or otherwise by any writ, order, judgment, or decree of any court, provided, that the validity of any sale, assignment, mortgage, pledge or hypothecation of any policy of insurance or if any avails, proceeds or benefits thereof, now made, or hereafter made, shall in no way be affected by the provisions of this section.'
The policy here issued by Pyramid Life to Cluck contained a special provision whereby $104.50 of the second, third, fourth and fifth annual premiums were to be deposited in a special fund for investment in certain named corporate stocks. The dividends from the investment in the stocks were payable to Cluck at his option as the policyholder at the end of either the tenth or twentieth calendar year if he was then living. No part of the dividends were payable to the beneficiaries named in the life policy--in fact in the event of Cluck's death prior to the tenth or twentieth calendar year, the dividends were accumulated and paid to other like policyholders according to their respective interests. Thus as we construe the policy it was to pay dividends to the policyholder as an investor and not 'as the insured or beneficiary designated under any insurance policy . . .' It follows that the trial court properly denied the exemption. In unholding the trial court, we hasten to add that the dividends here involved were not a mere incident of the life policy for such dividends would be exempt. See Allen v. Central Wisconsin Trust Co., 143 Wis. 381, 127 N.W. 1003 (1910).
We find no abuse of discretion in denying the attorney's fee to the interpleader and the costs in serving Carolyn Cluck Jackson, Doris Cluck Swang and Elma Cluck Hornyak. On the cost issue there is nothing in the record to show the above named individuals were claiming a right to any part of the funds.
The issue over the allowance of the attorney's fee arises in this manner. The bill of interpleader was filed on March 20, 1972, answers by all interested parties were promptly filed. Thereafter on April 14, 1972, a trial judge other than the one who heard the dispute on April 19th entered an order for the deposit of the money and also an order which provided:
'WHEREFORE, IT IS HEREBY ORDERED AND DECREED that Plaintiff, The First Pyramid Life Insurance Company of America, be, and it hereby is, released and discharged from all liability to Defendants Charles Donald Cluck, Blanche L. Cluck, Margaret Ann Mack, Carolyn Cluck, Doris Cluck Swang, and Elma Cluck Hornyak, or as to any one or more of them, as to the sum paid into the registry of this Court; that it be, and hereby is, awarded as its attorney's fee the sum of $_ _, to be taxed as costs in this suit; and that it have and recover its other costs herein, for all of which costs the Clerk of this Court is hereby ordered and directed to forthwith issue his check, payable out of the sum so paid into the registry of this Court.
'Jurisdiction is retained to determine the adverse claims of the defendants to the remaining sum.'
These two orders do not recite any appearance on behalf of appellee or any other party and make no mention of the plea of appellee that the bill of interpleader was filed in bad faith. Both such orders were filed on the day that the lower court held the hearing here involved. The last order recites that notice of the time and place of the hearing had been given to all parties but that Pyramid Life failed to appear.
We recognize that the allowance of an attorney's fee to the statutory interpleader, Ark.Stat.Ann. § 27--816 (Repl.1962), is a matter of right but where, as here, the interpleader has notice that the fee has not been fixed and fails to appear after notice and fails to establish the statutory grounds for an equitable interpleader action, we cannot say that the trial court erred in failing to allow such fee. This is particularly so in a case where the issue of bad faith in filing the interpleader action is raised. See Wall v. Wall (Tex.Civ.App.), 181 S.W.2d 817 (1944).
Affirmed.
I do not agree with that portion of the majority opinion relating to attorney's fees for the interpleader. The obvious and salutary purpose of the pertinent statutes is to protect an innocent stakeholder not only from multiple liability but from the hazards, trouble, vexation and expense arising from a fidpute over entitlement to a fund in the hands of the interpleader. Goad v. Goad, 238 Ark. 12, 377 S.W.2d 822; Underwriters at Lloyd's v. Nichols, 363 F.2d 357 (8th Cir. 1966); New York Life Ins. Co. v. Miller, 139 F.2d 657 (8th Cir. 1944); Hunter v. Federal Life Insurance Co., 111 F.2d 551 (8th Cir. 1940); Tollett v. Phoenix Assurance Co. of New York, 147 F.Supp. 597 (D.C.Ark.1956).
The record in this case discloses that:
Appellee Margaret Ann Mack caused a writ of garnishment to be issued against the insurance company appellant on December 1, 1971, upon a judgment she recovered against appellant Cluck and others in the Circuit Court of the Eastern District of Clay County on October 7, 1970. On December 7, 1971, appellee Margaret Ann Mack and Blanche L. Cluck caused another writ of garnishment to be issued against the insurance company upon a judgment against Charles Donald Cluck rendered on July 1, 1971, by the Chancery Court of the Eastern District of Clay County. On March 18, 1972, an alias writ of garnishment was issued upon the circuit court judgment in favor of appellee Mack. The bill of interpleader was filed on March 20, 1972. It contained an allegation that Blanche L. Cluck, appellee Mack, and Carolyn Cluck Jackson, Doris Cluck Swang and Elma Cluck Hornyak had asserted claims to the fund in the hands of the interpleader. The prayer was that the interpleader be released and discharged from liability to the claimants to the fund, all of whom were made defendants to the bill of interpleader, and, for a reasonable attorney's fee to be fixed by the court, as provided by Ark.Stat.Ann. § 27--816 (Repl.1962). Process was issued for all defendants. Answer was filed by Margaret Ann Mack on March 24, 1972. In the answer, she made the following allegations of bad faith:
This interpleader action was filed in bad faith by the plaintiff for purposes of harassment and reducing the net amount of money which Margaret Ann Mack might obtain to go on her judgment of 10--7-- 70 against Charles Donald Cluck as evidenced by the following prior acts of this plaintiff:
This plaintiff answered Margaret Ann Mack's garnishment under her 10--7--70 judgment on Dec. 7, 1971, by claiming any money it held for or on behalf of Charles Donald Cluck was 'contingent' on premiums being paid in full to 12--28--71 (when, in truth, said premiums were then fully paid to that date); and on any cash reserves under said policy not being depleted by loans to the insured (when, in truth,) the insured had never applied for any loan prior to service of the Writ); and on the insured being alive on 12--28--71 (a mere 21 days after the answer was filed).
The answer of Charles Donald Cluck, filed April 7, 1972, asserted his claim to the fund and asked that both Blanche L. Cluck and Margaret Ann Mack be enjoined from the issuance of further writs of garnishment against the insurance policy proceeds. No answer was filed by Blanche L. Cluck or any other defendant, although service of process was had on all defendants by March 24. In spite of the allegations of bad faith (which were probably demurrable) the chancery court sustained the bill of interpleader, discharged the insurance company, and retained jurisdiction to determine the adverse claims. The chancery court, in entering the order of April 14, 1972, quoted in part in the majority opinion, made specific findings that jurisdiction of the court to determine the adverse claims to the fund was established by Ark.Stat.Ann. § 27--816 and that the insurance company was 'entitled to an order releasing and...
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