Prudential Ins. Co. of America v. Irvine

• Decision Date: 27 November 1953
• Docket Number: No. 57,57
• Citation: 61 N.W.2d 14,338 Mich. 18
• Parties: PRUDENTIAL INS. CO. OF AMERICA et al. v. IRVINE et al.
• Court: Michigan Supreme Court

Page 14

61 N.W.2d 14

338 Mich. 18

PRUDENTIAL INS. CO. OF AMERICA et al. v. IRVINE et al.

No. 57.

Supreme Court of Michigan.

Nov. 27, 1953.

Floyd H. Skinner and Alphonse Lewis, Jr., Grand Rapids, by Alphonse Lewis, Jr., Grand Rapids, for defendants except Marie Irvine and appellants.

Linsey, Shivel, Phelps & Vander Wal, Grand Rapids, for appellee Marie E. Irvine.

Before the Entire Bench, except BOYLES, J.

BUTZEL, Justice.

This is a bill of interpleader, brought by the Prudential Insurance company and the Equitable Life Assurance Society of the United States, plaintiffs, against Doris D. Irvine, individually and as administratrix of the estate of Charles F. Irvine, deceased, Terry Lee Irvine, her son, and Marie E. Irvine, defendants, to determine who is entitled to the proceeds of a certain group life insurance policy which they had written on the life of Charles F. Irvine. Defendants Doris D. Irvine and Marie E. Irvine are the litigants in Irvine v. Irvine, 337 Mich. 344, 60 N.W.2d 298, involving rights to real property. The attorneys for the respective defendants in this case have stipulated that in deciding it we may also refer to the testimony in the Irvine v. Irvine case. The two cases were heard and decided by separate judges in the court below, but, since we hear chancery cases de novo, we have studied both records in order to arrive at a fuller understanding of the facts.

In the spring of 1947, Charles F. Irvine, as an employee of the Borden Company, applied for and obtained a group life insurance policy certificate from plaintiffs in the amount of $3,500. A group policy had been issued to the Borden Company. The certificate of insurance named 'Marie E. Irvine--wife' as beneficiary. In September, 1947, Marie obtained a divorce from Charles, the decree providing in part that:

'It is further ordered, adjudged and decreed that all rights of either party in any policy or contract of life insurance, endowment or annuiry upon the life of the other is hereby terminated and each party shall have the sole and exclusive right in any and all policies or contracts of life insurance, endowment or annuity upon his or her life.'

Thereafter, on April 1, 1948, Charles, who at that time was a single man, increased the amount of this policy to $4,000, but he made no change whatsoever in his designation of beneficiary. In June of 1948, he married Doris D. Irvine. Some time prior to the divorce between Charles and Marie, Doris had given birth to Terry Lee, who was born out of wedlock, but whose paternity was acknowledged by Charles. Marie testified that she divorced Charles at his request, so that he might legitimatize the child. It may also be noted, however, that following her divorce from Charles, Marie married one James Kelly in May, 1948, although she later divorced him in July or August of the same year. The marital bliss of the marriage between Charles and Doris was apparently not long lived either for on August 23, 1948, Doris commenced a divorce suit against Charles. She obtained an interlocutory decree, but shortly before it would have become final she filed a petition to set it aside. She also obtained leave to amend her bill of complaint regarding property and alimony. During the summer of 1949, a reconciliation was effected between Doris and Charles and upon stipulation of the parties an order was entered on September 6, 1949, vacating the interlocutory decree and marital relations were resumed. However, some time in November of that year, Charles moved out again, and on January 20, 1950, Doris instituted suit for separate maintenance against him. This suit was dismissed in May, 1950, again upon stipulation of the parties, and they apparently remained together from then until he again left her the following July. He returned in November and remained with Doris from then until the time of his death on January 19, 1951. It appears that throughout his marriage to Doris, a rather close friendship was continued between Charles and Marie, and that during at least part of his last two absences from Doris he had been staying at Marie's home, as she produced memoranda of his payments to her for room and board during these intervals. There was also evidence that at the time of his death he was indebted to Marie in the sum of $1,500. He had never made any changes in the designation of beneficiary of the insurance.

Marie claims that Charles intentionally left her as the named beneficiary on the policy certificate and that shortly before his death he had, before witnesses, affirmatively designated her as beneficiary: that the provisions of C.L.1948, § 552.101, Stat.Ann.1951 Cum.Supp. § 25.131, when coupled with his affirmative designation gives her the right to the insurance proceeds. Marie's daughter and son-in- law, Helen and August Sipma, both testified to a meeting which they witnessed between Marie and Charles about two weeks before his death. The daughter testified that one evening about two weeks prior to Charles' death she and her husband had driven Marie over to the house where Charles was then living with Doris; that they parked in front of the house and Charles came out and got into the rear seat of the car (Marie, Helen and August remaining in the front seat); that after a short conversation in which Charles said that he was feeling 'pretty punk' and afraid that he would have to go back to the hospital for more x-rays, he handed the insurance policy certificates to her mother saying:

"I want you to have this, Marie,' he said, and 'You hang onto it,' he said, and 'You, Helen and Gus, I want you to be sure that you are witnessing the fact that I am giving this to your mother."

She testified that he also said:

"If it is necessary,' he said, 'something should happen to me,' he said, 'I want you to fight for it, and be sure and hang onto it."

On redirect examination she testified:

'We lived only a block or two from him, and he talked about his insurance and the house and said he wanted mother to have those things. He said: 'I have never changed this and don't want it ever changed.' By 'this,' I mean the beneficiary. I heard him say that quite a while before his death when he would come down down and help us. On those occasions he said he didn't want the beneficiary changed.'

August Sipma's testimony was substantially the same as his wife's in all particulars. Marie also testified, over objection, to the meeting in the car in front of Charles' home. Her testimony was objected to as being equally within the knowledge of the deceased, and therefore inadmissible under C.L.1948, § 617.65, Stat.Ann. § 27.914, but the trial judge held that the meeting was adequately proven without her testimony.

Doris contends that any rights which Marie might have had to the proceeds of the policy were terminated by the provisions of the decree of divorce (quoted supra) between her and Charles. Doris further claims that she is entitled to the insurance proceeds under the following provision of the policy:

'Beneficiary: Any part of the insurance for which there is no beneficiary designated by the Employee or surviving at the death of the Employee will be payable in a single sum to the first surviving class of the following classes of successive preference beneficiaries: The Employee's (a) widow or widower; (b) surviving children; (c) surviving parents; (d) surviving brothers and sisters; (e) executors or administrators.'

Regarding Marie's claim that subsequent to their divorce, Charles had affirmatively designated her as beneficiary of the policy, Doris contends that there was at most an intention to make Marie the beneficiary, but it was invalid and of no effect because not executed in accordance with the policy's conditions to the change of beneficiary, i. e.:

'Any employee may from time to time while insured hereunder change the beneficiary by a written request signed by the employee and filed with the employer, but such change shall take effect only upon its entry be the employer on the insurance records maintained by it in connection with the insurance under this policy.'

The very possibility of such a meeting as was described by Helen and August Sipma was emphatically denied by Ronald Mosies, Doris' son by a prior marriage. He testified that Charles was very ill for several months prior to his death; that during the last two months before his death was in bed most of the time; that since Charles was having spells he had watched over him very closely during this time and especially from the first of January on; that Charles was under his constant observance during all the evenings of January; that there was no way that Charles could have left the house during any of these evenings without his (Ronald's) knowledge; and that he knew that Charles did not go outside and meet anyone in a car parked in front of the house about two weeks before his death. The testimony was thus in sharp conflict on the point, but the trial judge found that the meeting took place as testified to by Helen and August Sipma.

The trial judge based his decision largely upon his construction of C.L.1948, § 552.101, Stat.Ann.1951 Cum.Supp. § 25.131, which provides in part that:

'Hereafter every decree of divorce shall determine all rights of the wife in and to the proceeds of any policy or contract of life insurance, endowment or annuity upon the life of the husband in which she was named or designated as beneficiary, or to which she became entitled by assignment or change of beneficiary during the marriage or in anticipation thereof, whether such contract or policy was heretofore or shall hereafter by written or become effective, and unless otherwise ordered in said decree such policy or contract shall thereupon become and be payable to the estate of the husband or to such named beneficiary as he shall affirmatively designate: * * *.'

It was the judge's opinion that under the terms of the statute the insurance became payable to the...