Blakeley v. Herring

• Citation: 374 S.W.2d 677
• Decision Date: 09 January 1964
• Docket Number: No. 15,15
• Parties: James Alex BLAKELEY, Trustee, Appellant, v. Ellen Davis HERRING et al., appellees.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 677

374 S.W.2d 677

James Alex BLAKELEY, Trustee, Appellant, v. Ellen Davis HERRING et al., appellees.

No. 15.

Court of Civil Appeals of Texas, Tyler.

Jan. 9, 1964.

Rehearing Denied Feb. 6, 1964.

Jay S. Fichtner, Harvey L. Davis, Dallas, for appellant.

W. A. Pritchard, Bradford, Pritchard & Ashley, Andrew J. MacMaster, Dallas, for appellees.

SELLERS, Justice.

James E. Herring, deceased, and Ellen Davis Herring were married on or about September 4, 1948, and continued to live together until on or about March 25, 1960. On March 25, 1960, James E. Herring filed a suit for divorce against Ellen Davis Herring in the Domestic Relations Court of Dallas County, Texas. During this marriage there were born to them two children. twin girls, about 13 years of age at the time of this suit for divorce. Ellen Davis Herring filed a cross-action for a divorce from James E. Herring. Thereafter James E. Herring fied in this cause an inventory of their property and listed, among other property, a Profit Sharing Retirement furnished him by his employer, Marathon Insurance Company, a wholly-owned subsidiary of Pacific Finance Corporation, of the value of $9,530.00. He also listed a Group Endowment Plan, issued to him as employee of his employer by the John Hancock Mutual Life Insurance Company of the value of $1,772.72, with notation that both of these Funds were not available to him until his employment terminated.

Thereafter a divorce decree was entered on August 2, 1960, in which James E. Herring was granted a divorce from Ellen Davis Herring, and her cross-action for divorce was denied. The care and custody of the two children was awarded to James E. Herring. This judgment awards certain attorney's fees and decrees that all community property be placed in the hands of a receiver to be thereafter named. Subsequently, Ferris McKool was named Receiver of the community property, with instructions to sell the same, pay the debts and divide the remains between the parties. No further orders were entered in the divorce court in regard to the two Profit Sharing Funds above mentioned. At the time of the divorce, Ellen Davis Herring was named as beneficiary in case of the death of James E. Herring for both funds.

On June 17, 1961, James E. Herring died testate. His will was duly probated and in which will he named James Alex Blakeley trustee for his two minor children, with full instructions with reference to the care and management of the property of the two children. Before his death and after the divorce judgment, James E. Herring changed his beneficiary from his former wife to James Alex Blakeley, Trustee, said change being authorized by his employer's retirement plan.

After the death of James E. Herring, James Alex Blakeley, in his capacity as Trustee, sought to collect the retirement annuity and profit sharing funds which, at the time of James E. Herring's death, were of the value of $11,623.86, and $2,285.46, respectively; but due to the claim of Ferris McKool, Receiver in the divorce court, and the former wife claiming the funds as community property of James E. Herring and Ellen Davis Herring at the time the divorce decree was entered and was therefore subject to the jurisdiction of the divorce court, and the payment of the community debts and attorney's fees allowed in the divorce decree.

The present suit was brought by James Alex Blakeley, Trustee, against Ellen Davis Herring, Ferris McKool, Receiver Pacific Finance Corporation and its aubsidiary, Marathon Insurance Company, the employer of James E. Herring, United California Bank (Trustee of Profit Sharing Plan), and John Hancock Mutual Life Insurance Company (Insurer of James E. Herring's retirement annuity policy), seeking a declaratory judgment (1) that no portion of the funds in dispute were the community property of decedent and Ellen Davis Herring; (2) that Ferris McKool, Receiver, has no claim thereto; (3) and that the Plaintiff recover judgment against the United California Bank and John Hancock Mutual Life Insurance Company for the funds in dispute. The defendant filed an answer cross-action and third-party action, requesting the court to award said funds to Ferris McKool, Receiver, who was appointed by the Domestic Relations Court in the prior divorce decree. The Marathon Insurance Company filed its interpleader; and with all parties before the court, the funds representing the dispute were paid into the Treasury of the Court and all parties to the judgment dismissed, except Ferris McKool, Receiver, and Ellen Davis Herring. The plaintiff filed a motion for summary judgment, claiming all the funds under the undisputed facts and Ferris McKool and Ellen Davis Herring likewise filed a motion for summary judgment, claiming the funds as a part of the community property of the parties at the time of the divorce; and in the alternative, if Ferris McKool, Receiver, was not entitled to the funds, then Ellen Davis Herring receive one-half of the funds as her community property.

The Court, after hearing on these notions, granted the motion of Ferris McKool, Receiver, and ordered the funds turned over to Ferris McKool to be expended by him in accordance with the judgment of the Domestic Relations Court of Dallas County, Texas, and ordered the Clerk to turn over to Ferris McKool the proceeds which had been paid into the Treasury of the Court by John Hancock Life Insurance Company and Marathon Insurance Company, and denied to the plaintiff his application for a summary judgment. On the hearing for the summary judgment there was introduced in evidence the Employees' Profit Sharing Plan and Trust Agreement of Marathon Insurance Company, the original of which accompanied the record on this appeal. We shall not undertake to set out many of the provisions in this instrument. Insofrar as the Profit Sharing Plan and Trust Agreement is concerned, we deem it sufficient to call attention to the fact that this plan was put into force around 1951. It provides that all of the funds shall be made available by the Pacific Finance Corporation and its subsidiaries and no contributions tributions to the fund is required by the employees....