Shaw v. Transport Life Ins. Co.

• Decision Date: 24 July 1973
• Docket Number: No. 8163,8163
• Parties: James D. SHAW, Individually and as Administrator of the Estate of C. D. Shaw, Deceased, Appellant, v. TRANSPORT LIFE INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 495

498 S.W.2d 495

James D. SHAW, Individually and as Administrator of the Estate of C. D. Shaw, Deceased, Appellant, v. TRANSPORT LIFE INSURANCE COMPANY, Appellee.

No. 8163.

Court of Civil Appeals of Texas,

Texarkana.

July 24, 1973.

Rehearing Denied Aug. 28, 1973.

Will D. Pace, Tyler, for appellant.

Mark Davenport, Atwell, Malouf, Musslewhite & Bynum, Dallas, Mike Thompson, El Paso, for appellee.

CORNELIUS, Justice.

This is an appeal from a summary judgment which awarded the proceeds of a group life insurance policy on the life of C. D. Shaw, deceased, to a former wife, Mrs. Betty Davis, rather than to James D . Shaw, who was his only son and the administrator of his estate. The suit was filed by James D. Shaw against Transport Life Insurance Company to recover said proceeds. The insurance company interpleaded Mrs. Betty Davis, contending that she was C. D. Shaw's beneficiary in the policy and that she was making claim to the proceeds of the policy. Mrs. Davis filed an answer to that effect.

On motion for summary judgment by Mrs. Davis, she was awarded the insurance proceeds and Transport Life Insurance Company was dismissed as a stake holder and was awarded $400.00 attorneys fees out of the impleaded proceeds of the life insurance policy. Mrs. Davis' motion was supported by her affidavit and there were also certain answers to interrogatories, admissions and the deposition of Mrs. Rosa Coffman (an employee of Braswell Motor Freight Lines which was the group policyholder) before the trial court when its action was taken.

The basis of Mrs. Davis' motion was that Mrs. Bettie Shaw had been designated the beneficiary by C. D. Shaw at the time he was enrolled as an insured under the group policy; that she was Bettie Shaw, wife of C. D. Shaw, at that time; that she and C. D. Shaw were later divorced; that C. D. Shaw never changed the beneficiary; that C. D. Shaw died while covered by said policy; and that she is the same person as the Bettie Shaw so designated as beneficiary and was therefore entitled as a matter of law to the insurance proceeds. Appellant James D. Shaw resisted the motion of Mrs. Davis with an answer supported by the affidavit of his attorney. The answer and the affidavit contended that the insurance policy provided for automatic termination of the rights of a divorced wife as beneficiary; that the group policyholder (Braswell Motor Freight Lines) knew that C. D. Shaw had been divorced and had been married and divorced again and was single when he died; that there was no effective designation of Mrs. Bettie Shaw as beneficiary; that Betty Davis had no insurable interest on the life of C. D. Shaw; and that appellant 'contested the identity' of Mrs. Betty Davis.

We have concluded that there was no genuine issue of material fact before the trial court concerning the right of Mrs. Davis to the insurance proceeds and that the summary judgment of the trial court awarding Mrs. Davis such proceeds was correct.

In reality appellant did not dispute the essential facts, but contended that he was entitled to the insurance proceeds as a matter of law for the reason that Mrs. Davis, after having been named as beneficiary, was divorced from C. D. Shaw before his death, and that such divorce having terminated her insurable interest in the life of C. D. Shaw and therefore terminated her rights as beneficiary. As appealing and reasonable as this argument is, the legislature has provided, and our courts have ruled to the contrary.

Prior to the adoption of Sec. 3.49--1 of our Insurance Code (Tex.Ann.Civ.Stat. Insurance Code, V.A.T.S.), the law in Texas was that a beneficiary must have an insurable interest in the life of the insured to take the proceeds, and that a divorced spouse, absent the presence of minor children or other extenuating facts, did not have an insurable interest in the life of the former spouse. This rule was abrogated, however, by the enactment of Sec. 3.49--1 of the Texas Insurance Code, so that now when the insured designates a beneficiary as provided in said section, such beneficiary has an insurable interest in the life of the insured and is entitled to the proceeds. That this statute applies to a divorced wife of the insured has been expressly affirmed by our Supreme Court in McCain v . Yost, 155 Tex. 174, 284 S.W.2d 898 (1955), where the court said:

'(Section 3.49--1) applies to the facts in this case and renders it conclusive that petitioner had an insurable interest and is entitled to recover judgment for the proceeds of the policy.'

This ruling was followed in Partin v. de Cordova, 464 S.W.2d 956 (Tex.Civ.App.--Eastland 1971, writ ref'd), and Scherer v. Wahlstrom, 318 S.W.2d 456 (Tex.Civ.App.--El Paso 1958, writ ref'd). In the Scherer case the beneficiary was the fiance of the insured when named, but she had married someone else at the time the insured died .

We believe the above cited cases control the right of Mrs. Davis to the proceeds of the policy. Appellant urges that Sec. 3.49--1 only is effective when 'complied with' and that there was no such compliance here. The only compliance required by Sec. 3.49--1 is that the insured apply for insurance and in such application designate in writing 'any such person' as beneficiary. We believe this was done in this case, as the answers to interrogatories contained in the record show a form designated Form G--69--7--59 which is dated March 1, 1960, signed by C. D. Shaw and which states above the signature:

'I hereby request the amount(s) and form(s) of insurance coverage for which I am or may become eligible under the insurance policy or policies issued by Transport Life Insurance Co. and authorize the deduction from my earnings of the amount required to cover my share of the premiums, if any. I reserve the right to revoke this deduction authorization at any time on written notice.'

At the top of this form there is a place for 'Name of Individual Applicant,' under which it is shown the name C. D. Shaw. There is also a box for 'Beneficiary' in which there is contained the name 'Bettie L. Shaw.' Another box states 'Relationship,' and in it is contained the word 'Wife.' The affidavits and admissions in the record show that C. D. Shaw signed this card when enrolling for the insurance. It is clear that this was an application for insurance and that Bettie L. Shaw was named therein as beneficiary. We find no further act necessary to 'comply with' Sec. 3.49--1.

Appellant contends that the court erred in...