Prudential Ins. Co. of America v. Gibson

• Decision Date: 19 September 1967
• Docket Number: No. 32593,32593
• Parties: PRUDENTIAL INSURANCE COMPANY OF AMERICA, a corporation, Plaintiff, v. Lillian Mae GIBSON, Defendant-Appellant, Venator GIBSON, Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 26

421 S.W.2d 26

PRUDENTIAL INSURANCE COMPANY OF AMERICA, a corporation, Plaintiff, v. Lillian Mae GIBSON, Defendant-Appellant Venator GIBSON, Defendant-Respondent.

No. 32593.

St. Louis Court of Appeals, Missouri.

Sept. 19, 1967.

Motion for Rehearing or to Transfer to Supreme Court Denied

Oct. 17, 1967.

Application to Transfer Denied Dec. 11, 1967.

Ernest L. Keathley, Vernon C. Oetting, St. Louis, for defendant-appellant.

Walter H. Pollmann, Morris B. Kessler, St. Louis, for defendant-respondent.

TOWNSEND, Commissioner.

Interpleader suit in which plaintiff life insurance company has paid into the registry of the court the contractual amount of its policy and has been discharged.

The adverse parties are the divorced first wife of the deceased insured, Arico Gibson, and his second wife. This appeal is taken from a decree in favor of the first wife. The principal issues are: 1. Whether insured and the first wife, Venator, entered into a contract at the time of divorce that insured would maintain in full force the policy in question with the first wife as beneficiary and 2. if such a contract was entered into, whether it is binding upon the second wife, Lillian, in whose favor the insured effected a change of beneficiary two years before his death. Problems of material alteration and of contract interpretation arise along the way.

At the death of Arico Gibson, two certificates of life insurance under two group policies were in full force, one issued by Prudential Insurance Company and one by Metropolitan Life Insurance Company. The Prudential policy was issued in accordance with the collective bargaining agreement between Brown Shoe Company and Arico Gibson's local union. All premiums were paid up to the time of Arico's death, which the pleadings indicate occurred on or about December 25, 1964. The circumstances of the issuance of the Metropolitan group policy and certificate are not shown.

In negotiations between the insured and the first wife prior to and in anticipation of divorce the insured signed and acknowledged a stipulation prepared by Mr. Kessler, the attorney for the first wife, hereinafter referred to as respondent, which reads in part as follows:

'5. Defendant (Arico) is to maintain in full force and effect with the plaintiff (Venator) as beneficiary policy of insurance upon his life, issued to him as an employee of Brown Shoe Company by either the Teamster's Local Welfare Fund or Metropolitan Life Insurance Company group policy.' ¹

This stipulation was executed in the office of the insured husband's attorney, Mr. Litz, and was by him forwarded to Mr. Kessler. Thereafter when respondent Venator executed this document in Mr. Kessler's office ther had been added by her attorney at the end of the above paragraph 5 the words, 'or Prudential Life insurance or any other insurance company.'

The stipulation, in the altered form, is found in the file of the divorce proceeding, but is of course not embodied in the decree.

Mr. Kessler testified as to the circumstances of the alternation: 'A Originally, Mr. Litz represented to me that there was one policy of insurance and that was The Metropolitan policy of insurance. Mrs. Gibson, when she came in to sign this stipulation, advised me and informed me that there were two policies. I contacted Mr. Litz and he was not sure and he couldn't tell me. He knew about The Metropolitan policy. I informed Mr. Litz that the agreement was that all policies would be carried under this stipulation and he agreed that if he was in error about there being only the one policy, that it should be changed and it was changed and I made the change before Mrs. Gibson signed this. * * * The amended stipulation was mailed out to Mr. Litz immediately after Mrs. Venator Gibson signed it, in accordance with our 'phone conversation and that was my letter to Mr. Litz. Q Which has already been offered in evidence here? A Yes, sir.'

The letter referred to in Mr. Kessler's testimony was previously offered by appellant; it was dated on the same day that respondent signed the altered stipulation and read as follows: 'Re: Gibson v. Gibson. Dear Mr. Litz: Enclosed find copy of Stipulation. Please note that I have made the insertion in paragraph 5 in accordance with our telephone conversation of this date. I have notified my client of the setting of April 5th, 1961.'

Mr. Litz, attorney for Arico Gibson in the divorce suit, testified as follows: 'Q Had you discussed the terms of this stipulation with your client, Arico Gibson, now deceased, before he signed that paper? A We had many discussions about it. * * * Q (By Mr. Pollmann) I will ask you, again, you did discuss the terms of this stipulation and settlement agreement with your client before he signed it, is that correct? A Yes, sir. * * * Q Your client knew about the language, all the language in that agreement when the divorce was granted, is that correct? A Yes, sir. Q No question about that? A No, sir. * * * Q Did you talk about the Prudential policy to your client, Mr. Arico Gibson? A We spoke about two policies and we didn't refer to them, generally, by the names of the companies from which the policies were issued, but rather, the places from where he got the policies. As I recall, he worked at Brown Shoe Company. He had one policy there and one from The Teamsters Union, and exactly which was which, I don't recall, but these were the ones that we referred to and later, in discussions with Mr. Kessler, I found out that Prudential and Metropolitan were involved. Q That was before the divorce was granted, right? A Oh, yes. Q And you talked about this with your client and with Mr. Kessler, is that correct? A On several occasions, yes, sir. Q It was one of the aspects in agreeing to the stipulation? A It was one. Q Mr. Litz, did you ever discuss with your client, Arico Gibson, at any time, the question of whether or not he could change the beneficiary on either of these policies? Do you remember ever talking to your client about that? A Yes, we spoke several times about the entire matter. Q Well, what did you tell him, Mr. Litz? A I don't ever recall looking at the policies, but this was one of the demands or requests that the plaintiff wanted in order to wind this divorce matter up and he was willing to do anything he could, give her anything. Q In order to wind the matter up to the mutual satisfaction of both people? A That's right. * * * Q What did he tell you and what did you tell him with respect to this matter of changing beneficiaries, just as a matter of fact? * * * A As I recall, one of the stipulations or items in the stipulation that Mr. Gibson agreed to was that he would give up the change of beneficiary of one or more policies that he had to his wife in consideration of the divorce, and to maintain these policies for her benefit. This was part of our alimony. * * * Q Well, specifically, did it include--did your discussions with your client, as a matter of fact, Mr. Litz, include the Prudential policy? A It included, as I said before, a policy from Brown Shoe Company and one from The Teamsters, whichever that one went along with; that was included in the discussion. Q Whether it was from Brown Shoe Company or Teamsters 688--* * * Yes, sir.' Upon further cross-examination Mr. Litz was asked: 'Q Mr. Litz, after this change was made, did you tell your client that the change was, in fact, made? A Certainly. I wouldn't permit Mr. Kessler to make it before I checked with Gibson. Q So, on April the 5th, 1961, when according to the records of this court, this divorce was granted, which is now a final judgment, your client knew what was on this paper, Exhibit A, did he not? A Yes, and he-- * * * Q He did, did he not? A Yes.'

Subsequent to the divorce Mr. Kessler evidently notified the Metropolitan Life Insurance Company of a stipulation between Arico and Venator, for on May 26, 1961, he advised Mr. Litz that he was 'receiving a little static' from Metropolitan and enclosed a waiver of right to change beneficiary form whose execution he requested Mr. Litz to procure from Arico. No mention of Prudential was made in this letter. This form was executed as requested. Upon Arico's death the principal amount of the Metropolitan policy was paid to respondent Venator by Metropolitan. On December 28, 1964, Mr. Kessler advised Prudential that respondent Venator claimed the proceeds due under the Prudential certificate and that she intended to contest the validity of any change of beneficiary made by Arico after March 16, 1961. Accompanying this letter was a copy of the stipulation as originally drawn, i.e., without the alteration previously mentioned.

Although the alteration of the stipulation after it had been signed and delivered was irregular, the testimony of Mr. Litz establishes that Arico, being fully advised, acquiesced in the alteration of the stipulation; there was therefore a ratification by him of the change before any move was made to utilize the stipulation in any way. In addition the stipulation so altered was subsequently filed in the divorce proceeding with full knowledge by Arico of its content. Nothing in the record suggests even a hint of any sharp practice being perpetrated upon Arico. Consequently any legal strictures relating to material alteration are inapposite. It must therefore be held that the stipulation with the added words 'or Prudential Life insurance or any other insurance company' constituted the contract between Arico and Venator.

There remains the problem of determining the intentions of the parties from the stipulation so amended.

Appellant's most vigorous contention is that the stipulation filed in the divorce proceeding imposed a restriction as to a change of beneficiary on only one of the policies referred to therein. Looking to the precise wording of the stipulation we find that it refers to 'policy of insurance * * * issued * * * by either the Teamster's Local Welfare Fund or...