Prudential Ins. Co. of America v. Gatewood
| Decision Date | 10 November 1958 |
| Docket Number | No. 46551,No. 1,46551,1 |
| Citation | 317 S.W.2d 382 |
| Parties | The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. N. Maxine GATEWOOD, Administratrix, with Will Annexed of the Estate of John J. Gatewood, Deceased, Appellant. The Citizens Bank, Trustee under the Will of John J. Gatewood, Deceased, and Clarene Ware, Respondents |
| Court | Missouri Supreme Court |
Neale, Newman, Bradshaw, Freeman & Neale, Flavius B. Freeman, Donald J. Hoy, Springfield, for appellant.
Fred A. Moon, Springfield, for respondent The Citizens Bank, Trustee under the will of John J. Gatewood, deceased.
This appeal presents an issue between two rival claimants to the proceeds of two policies of insurance issued by the Prudential Insurance Company of America on the life of John J. Gatewood, who, on September 23, 1956, died of accidental asphyxiation. The face of each of the policies was for $5,000, but each carried a provision that if death occurred by accidental means an additional benefit of $5,000 would be paid to the beneficiary therein named. Each policy also invested the insured with the privilege of changing the named beneficiary.
The insurer conceded the accidental death of the insured and its liability to the extent of $10,000 under each policy. Upon the death of the insured, three rival claimants asserted themselves to be entitled to the proceeds of both policies, to wit: (1) Clarene Ware, a former wife of the insured; (2) N. Maxine Gatewood, the widow of the insured and administratrix c. t. a. of his estate; and (3) the Citizens Bank, Springfield, Missouri, as trustee of the proceeds of the policies. By an action of interpleader, the insurer was permitted to implead the three claimants as defendants and paid into court the sum of $20,000, plus accrued interest in the sum of $103.42. The three defendants, by separate answers, asserted their respective claims. The issues presented by the answers were tried by the court upon an agreed statement of facts, resulting in a decree directing that the net proceeds of the policies, $20,103.42, less attorney's fees in the sum of $150 and court costs, be paid to the Citizens Bank, Trustee, to be held by it in trust for Charles Robert Gatewood and Betty Kathryn Gatewood (minor children of the insured and his former wife, Clarene), 'in accordance with the terms and provisions of the trust established in the Will of John J. Gatewood, deceased.' Defendant N. Maxine Gatewood, Administratrix, appealed. Clarene Ware, former wife of deceased, did not appeal.
The two children of insured (and Clarene), to wit: Charles Robert and Betty Kathryn, were aged respectively thirteen and six years at the time of the death of insured. One of the policies, issued April 16, 1947, named the former wife, Clarene H. Gatewood, as beneficiary; the other, dated April 17, 1954, named Clarene H. Gatewood, wife of the insured, if living, otherwise Betty K. Gatewood, daughter of the insured, as beneficiary. On February 16, 1956, decedent and Clarene were divorced.
Prior to February 24, 1956, decedent conferred with one of the officers of the respondent Citizens Bank and inquired whether the bank 'would be willing to serve as trustee for his children hereinabove mentioned and that said officer, acting on behalf of [the bank] replied in the affirmative.' On February 24, 1956, the insured had a lawyer prepare and insured executed the will which was probated following his death.
Item One of the will directed the executor to pay all of testator's just debts, funeral and last illness expense. Item Two declared testator to be 'divorced and unmarried' and that he had only the two children above named. Item Three directed payment from the corpus of the residuary estate of all taxes that should become payable with respect to his gross taxable estate. Item Four gave all of the rest, residue and remainder of the testator's estate to the trustee thereinafter named. The terms of the trust were set forth in meticulous detail. We need only state the general tenor thereof: They empowered and directed the trustee (1) to devide the residuary estate into two equal shares and to allocate one of said shares to each child; (2) to hold, manage, sell, invest and reinvest the essets of the estate; (3) to pay the net income from the share of each child to that child until he or she attained the age of 25 years and to encroach upon the principal in behalf of either child, if in the discretion of the trustee his or her needs required. When each child attained the age of 25 years, the trustee was directed to pay such share, together with all accrued and unpaid income, to such child, and the trust terminated. In the event of certain contingencies therein set forth (such as the death of either or both children before or after the death of testator and prior to attaining the age of 25 years), the trustee was given specific directions as to disposition of the share or shares of such child or children. Item Seven provided. 'I nominate, constitute and appoint the Citizens Bank, a banking corporation of Springfield, Missouri, to be Executor of and trustee under this will, * * *.'
On or about the first day of March, 1956, the insured, in writing, through the representative of the insurer in Springfield Missouri, made application to the insurer, requesting that the named primary beneficiary in each of the policies be changed to 'Citizens Bank, Trustee of Estate of John J. Gatewood', at which time he delivered to the insurer's representative both policies. The insurer did not make changes requested, but instead requested the insured to execute his request for such changes on forms furnished by the insurer different from the forms furnished him when he made the original request.
On April 15, 1956, the insured and appellant were married.
On July 14, 1956, the insured, as requested by the insurer, executed the new forms furnished him, again requesting that the procees be paid to 'Citizens Bank, Trustee of Estate of John J. Gatewood.' The latter requests were duly received by the insurer, but the insurer again requested more specific information as to the requested change of beneficiary, to wit: the date of the instrument creating the trust and permission to see the same. The insured died, as stated, September 23, 1956, without having complied with the insurer's last request and the change of beneficiary was never endorsed on the policies, both of which still remained in possession of insurer. However, no contention is made that the insured, by executing the requests for change of beneficiary furnished by the insurer, did not effectively accomplish such change. Persons v. Prudential Insurance Co. of America, Mo., 233 S.W.2d 729, 732.
The Citizens Bank refused to act as executor of the estate of the insured, and, on September 28, 1956, the appellant was appointed and duly qualified as administratrix c. t. a. On October 25, 1956, appellant, as administratrix, and the Citizens Bank, as trustee aforesaid, jointly furnished the insurer with proofs of death of the insured, wherein they claimed to be the beneficiaries of said policies. On November 1, 1956, Clarene Ware also furnished the insurer with proof of death of insured and claimed herself to be the beneficiary of both policies.
The last settlement filed in the probate court by appellant, as administratrix, showed assets of the estate of the insured, not including the policies, in the amount of $6,451.65, which, exclusive of the policies, are insufficient to pay the demands on file 'together with statutory administratrix and attorney fees and probate costs.'
Upon appeal to this court, appellant asserts and briefs four points:
(a) By naming the Citizens Bank, trustee of estate of John J. Gatewood, as beneficiary in the policies the decedentinsured made the proceeds thereof a part of the assets of his estate;
(b) The object of the testator-insured's bounty is of no significance in determining his intention;
(c) If any inter-vivos trust was created (appellant concedes that technically there was), such trust was dry and the policy proceeds should be paid over to the estate; and
(d) The case of Tootle-Lacy National Bank v. Rollier, 341 Mo. 1029, 111 S.W.2d 12, (upon which it seems to be conceded the trial court based its decree) is not in point.
The respondent bank insists, to the contrary of each of the points urged by appellant, that the insured intended to and did create a trust for the exclusive benefit of his children separate and apart from his estate and free from claims of creditors or statutory allowances to his widow; that the trust, by correlation to the purposes and subject matter of the trust created in the will, was active and lawful and not subject to the claims of creditors or statutory allowances to the widow as a part of the estate; and that the Tootle-Lacy case, supra, is direct and controlling authority under the facts herein presented.
Appellant's argument runs this wise: That inasmuch as the will of the insured directed the payment of his debts, funeral expenses, taxes, etc., named the bank as his executor, and directed the bank to establish a trust fund in the assets remaining in his residuary estate, it is manifest that testator-insured intended there should be statutory administration of all of his assets, including the policy proceeds, and that the trust fund for the benefit of his children should be limited to the assets remaining after payment of costs of administration, payment of debts and statutory allowances to the widow; and that there is no basis in the record for an inference that the insured testator, by designation of the bank as 'trustee of estate of John J. Gatewood' as beneficiary of the insurance policies intended to create a separate and distinct inter-vivos trust apart from the testamentary trust provided in the will.
In support of that contention, appellant cites Prudential Insurance Company of America v. Bloomfield...
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