Murphy v. Metropolitan Life Ins. Co., 844

• Decision Date: 25 July 1973
• Docket Number: No. 844,844
• Citation: 498 S.W.2d 278
• Parties: Alma Buchanan Alexander MURPHY, Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY et al., Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 278

498 S.W.2d 278

Alma Buchanan Alexander MURPHY, Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY et al., Appellees.

No. 844.

Court of Civil Appeals of Texas Houston (14th Dist.).

July 25, 1973.

Rehearing Denied Sept. 5, 1973.

Robert E. Hall, Chris Dixie, Dixie, Wolf & Hall, Houston, for appellant.

Sam W. Davis, Jr., Vinson, Elkins, Searls, Connally & Smith, Houston, Robert B. Wallis, R. Mayo Davidson, Haynes & Fullenweider, Houston, for appellees.

TUNKS, Chief Justice.

Bobby Buchanan died intestate on October 27, 1970. He left surviving him his mother, Alma Buchanan Alexander Murphy, his wife, Lena Buchanan, and three sons. Those individual parties will sometimes be referred to by their first names.

At the time of his death Bobby was and had been for many years an employee of Shell Chemical Corporation. As such he had acquired certain employee benefits. One such benefit was called a provident fund and had a value of about $33,000. His estate was the named beneficiary of the provident fund at the date of his death. Another benefit was under what was called a survivor's benefit plan. That benefit had a value of about $24,000. Under this plan the employer had certain rights, hereinafter discussed, with reference to designation of the beneficiary. Bobby also was the insured in a company group life insurance policy in the amount of $12,500. At the time of Bobby's death his mother was the designated beneficiary under the group life policy. Other items of property remaining at Bobby's death were a home valued at $10,000, automobiles valued at $500 and household furniture of which no value was established by the evidence.

After Bobby's death both the mother and the surviving wife filed claims for the benefits under the life insurance policy. The insurer, Metropolitan Life Insurance Company, because of the conflict, declined to pay either claimant. The mother then filed suit against the surviving wife and the insurer to recover the benefits. The insurer took the position of a stakeholder and tendered the money representing the benefits into court to be paid in accordance with the judicial determination as to the conflicting claims. The surviving wife answered and by cross-action asserted her claim to the benefits. After a non-jury trial the trial court adjudged that the mother and surviving wife each receive one half of the benefits. The mother appealed.

The life insurance policy in question was property. Brown v. Lee,371 S.W.2d 694 (Tex.Sup.1963); Tex.Rev.Civ.Stat.Ann. art. 23, subd. 1 (1957). In response to pretrial interrogatories Lena characterized this policy as community property and no contrary contention is made by either party. Bobby, as the named insured, had the right to designate the beneficiary of the policy. Tex.Ins. Code Ann. art. 3.49--3 (1968), V.A.T.S. Also, since it was an incident to his employment, it was a part of the community which was subject to his 'sole management, control, and disposition.' Tex.Family Code Ann. sec. 5.22 (1970), V.T.C.A. However, his statutory authority to designate the beneficiary and to dispose of this item of the community was subject to limitation. He could not exercise that authority if, and to the extent that, such exercise was in fraud of his wife or resulted in a constructive fraud against her interest in the community. Before enactment of the cited article of the Insurance Code, it had long and firmly been established in Texas that one spouse could not give away the benefits of an insurance policy acquired with community funds if such gift was in actual fraud or resulted in constructive fraud of the other. See Huie, Community Property Laws as Applied to Life Insurance, 18 Tex.L.Rev. 121 (1940) and Quilliam, Gratuitous Transfers of Community Property to Third Persons, 2 Tex.Tech.L.Rev. 23 (1970). There is nothing in the language of the cited article from the Insurance Code that indicates an intent to depart from the rule or that the giving away of such a community property will not, under any circumstances, be fraudulent. The article is consistent with section 5.22 of the Family Code. The language of Tex. Family Code Ann. sec. 5.24 clearly indicates that, within the scope of legislative intent, the disposition of community property by one spouse having control thereof may sometimes constitute a fraud upon the other spouse.

In this case the trial judge found as a fact 'that the intent of Bobby Buchanan in changing the beneficiary of said policy ws arbitrary, capricious and improvident and was done to deprive his wife of benefit and not as a part of any considered estate planning.' He recited conclusions of law to the effect that the changing of the beneficiary both was actual fraud and resulted in constructive fraud upon the rights of Lena Buchanan. We must review the record to determine whether the trial judge's quoted fact finding is supported by the evidence and whether the legal conclusions drawn therefrom were proper. In such review we must consider all of the evidence in the light most favorable to the appellee and may not hold the trial court's finding erroneous if there is any probative evidence supporting it unless the finding is so against the preponderance as to be manifestly wrong. Cortez v. Cortez, 457 S.W.2d 131 (Tex.Civ.App.--San Antonio 1970, no writ).

Bobby and Lena Buchanan were married in 1949. The insurance policy in question was issued in 1951. Lena originally was designated beneficiary. In the latter part of 1968 the couple separated for a period of about two months because of marital trouble. It was during this separation that Bobby changed the designation of beneficiary in the insurance policy from his wife to his mother. At the same time he changed the designation of beneficiary in his employee provident fund from his wife to his estate. Bobby did not tell Lena of these changes of beneficiary after the separation ended. The changes remained effective until his death. A fellow employee testified that in the year 1969 when Bobby was asked if he had a will he said, 'I got that all taken care of where my boys will get everything I got.' Those facts would constitute some circumstantial evidence that Bobby was motivated by ill feeling toward his wife in changing the beneficiary of the insurance policy.

Mrs. Murphy, Bobby's mother, was a widow. She was 64 years old at the date of Bobby's death. She owned a home in another city. Her only income was from a $98 monthly social security check and an oil payment varying from $5 to $60 monthly. Bobby was her only child. Bobby's father had been dead about seven years....