Harris v. Harris, 10744

• Decision Date: 28 July 1971
• Docket Number: No. 10744,10744
• Citation: 94 Idaho 358,487 P.2d 952
• Parties: Helen L. HARRIS, Plaintiff-Appellant, v. Carol Klingen HARRIS, individually and as Executrix of the Estate of James H. Harris, Deceased, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 952

487 P.2d 952

94 Idaho 358

Helen L. HARRIS, Plaintiff-Appellant, v. Carol Klingen HARRIS, individually and as Executrix of the Estate of James H. Harris, Deceased, Defendant-Respondent.

No. 10744.

Supreme Court of Idaho.

July 28, 1971.

Robert C. Paine, of Parry, Robertson, Daly & Larson, Twin Falls, for appellant.

Hepworth, Walker, Nungester & Felton, Buhl, for respondent.

McFADDEN, Justice.

This action was instituted by Helen L. Harris, the plaintiff, referred to herein as appellant, against defendant-respondent Carol Klingen Harris, individually and as the executrix of the estate of James H. Harris, deceased, following rejection by the estate of appellant's claim against the estate for breach of property settlement agreement. The parties stipulated as to certain facts and exhibits. Affidavits were filed by each of the parties. Motions for summary judgment were presented by each of the parties. The trial court granted respondent's motion, entered summary judgment for respondent, and this appeal was perfected.

Helen L. Harris, appellant, and James H. Harris, now deceased, were married in 1953. Two children were issue of this marriage. In February, 1949, Helen and James Harris entered into a property settlement agreement which provided among other things that James Harris would maintain a thirty payment life plain National Service Life Insurance policy, insuring his life in the principal sum of $5,000.00, in full force and effect with Helen L. Harris named as the beneficiary, and that James L. Harris would make no change of beneficiary without his then wife's approval. ¹

Appellant instituted a divorce action in the California courts which culminated in an interlocutory decree being entered in March, 1949. This decree approved the property settlement agreement previously executed by the parties, incorporated it by reference, and awarded appellant custody of the minor children and also awarded her monthly payments for the support and maintenance of the minor children. In March of 1950, the final decree of divorce was entered, following the terms of the interlocutory decree. In April, 1950, the parties stipulated for a modification of the property settlement agreement and the interlocutory and final judgments of divorce, the effect of which was to eliminate payments for her support and maintenance but contined them for the children. The divorce court approved this stipulation.

Following the final decree of divorce, James H. Harris married the respondent and they remained husband and wife until his death on June 1, 1968. Probate of his estate was commenced in the Twin Falls County Probate Court.

At the time of the divorce of appellant from James H. Harris, he had in force a National Service Life Insurance policy in the face amount of $5,000.00, and he had previously designated appellant as the beneficiary. On February 24, 1954, contrary to the terms of the Property Settlement Agreement, Harris changed the beneficiary on the policy to his then wife, respondent Carol Klingen Harris, who, as the beneficiary of the policy, received the sum of $5,266.01.

On September 9, 1968, appellant filed her claim against the estate, which claim was rejected by respondent as the executrix of the estate.

Appellant's complaint is in three counts, the first based on the breach of agreement by decedent in changing the beneficiary on the policy in question; the second count is based on the contention that the property settlement agreement was incorporated and integrated and merged in the decree of divorce and decedent's actions constituted a violation of the terms of the decree; the third count was based on the theory that respondent Carol Klingen Harris is the constructive trustee of the funds she has received. The trial court in its memorandum opinion considered all three of these counts, and observed that appellant acknowleged a lack of merit concerning the third count. As to the second count, the trial court observed that it could not fatham what the court was to do about a violation of the terms of a property settlement agreement ratified and affirmed in the California divorce decree, other than to treat it as a property settlement agreement between the two parties, which position was covered by the first court of the complaint.

It is the appellant's position on this appeal that she is not seeking any of the proceeds of the National Service Life Insurance policy, but asserts that the trial court had jurisdiction to modify the property settlement agreement and to remedy the inquity arising from the failure of the decedent to carry out the express terms of paragraph (9)(e) of the agreement. She asserts that the provisions of 38 U.S.C.A. §§ 717(a) and 749 ² do not apply in this case because the right of the decedent to change the beneficiary of the policy is not disputed.

38 U.S.C.A. § 717(a) provides:

'The insured shall have the right to designate the beneficiary or beneficiaries of insurance maturing on or after August 1, 1946, and shall, subject to regulations, at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries.' 38 U.S.C.A. § 749 provides:

'Subject to regulations, the insured shall at all times have the right to change the beneficiary or beneficiaries of a United States Government life insurance policy without the consent of such beneficiary or beneficiaries.'

The insurance policy in question was a National Service Life Insurance policy. The leading case concerning these policies is Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424 (Feb. 1950, 3 Justices dissenting). This case was an appeal from a decision of a District Court of Appeal of California, 89 Cal.App.2d 759, 201 P.2d 837 (Jan. 1949), the Supreme Court of California having denied a hearing. The California District Court of Appeal had held that an estranged wife of a serviceman was entitled to her community property interest in a National Service Life Insurance policy, and required that the named beneficiaries (the insured's mother) pay one half of the payments to the widow. The United States Supreme Court reversed this decision, holding that the mother was entitled to the full proceeds of the policy notwithstanding that the premiums had been paid from community property. The United States Supreme Court in its opinion stated:

'We are of the opinion that the decision below was incorrect. The National Service Life Insurance Act is the congressional of affording a uniform and comprehensive system of life insurance for members and veterans of the armed forces of the United States. A liberal policy toward the serviceman and his named beneficiary is everwhere evident in the comprehensive statutory plan. Premiums are very low and are waived during the insured's disability; costs of the administration are borne by the United States; liabilities may be discharged out of congressional appropriations.

'The controlling section of the Act provides that the insured 'shall have the right to designate the beneficiary or beneificiaries of the insurance (within a designated class), * * * and shall * * * at all times have the right to change the beneficiary or beneficiaries * * *.' 38 U.S.C. § 802(g). ³ Thus Congress has spoken with force and clarity in directing that the proceeds belong to the named beneficiary and no other. Pursuant to the congressional command, the Government contracted to pay the insurance to the insured's choice. He chose his mother. It is plain to us that the judgment of the lower court, as to one-half of the proceeds, substitutes the widow for the mother, who was the beneficiary Congress directed shall receive the insurance money. We do not share appellee's discovery of congressional purpose that widows in community property states participate in the payments under the policy, contrary to the express direction of the insured. Whether directed at the very money received from the Government or an equivalent amount, the judgment below nullifies the soldier's choice and frustrates the deliberate purpose of Congress. It cannot stand.' 338 U.S. at 658-659, 70 S.Ct. at 399-400, 94 L.Ed. at 428-429.

In Williams v. Williams, 255 N.C. 315, 121 S.E.2d 536 (1961), the court held that a property settlement providing that the insured husband would maintain and keep in force National Service Life Insurance policies and would not change beneficiaries in such policies from his former wife, who was the designated beneficiary, in effect was an assignment of the proceeds of the...