Sherman v. Roe

• Decision Date: 18 November 1953
• Docket Number: No. A-4199,A-4199
• Citation: 153 Tex. 1,262 S.W.2d 393
• Parties: SHERMAN v. ROE.
• Court: Texas Supreme Court

Page 393

262 S.W.2d 393

153 Tex. 1

SHERMAN v. ROE.

No. A-4199.

Supreme Court of Texas.

Nov. 18, 1953.

Rehearing Denied Dec. 16, 1953.

George M. Kelton, Odessa, for petitioner.

Mason & Barnes, Odessa, for respondent.

SMEDLEY, Justice.

The controversy in this cause is over the right to the proceeds of a certificate of life insurance under a group policy. The insured, James Roe, and the beneficiary, who was his wife, Edna I. Roe, were killed in a common disaster, and it is unknown to the parties hereto whether Roe and his wife died at the same moment or whether one survived the other. They were killed on June 4, 1951, at which time the Simultaneous Death Act, Chapter 196, Acts Regular Session, 52nd Legislature, 1951, Article 2583a, Vernon's Annotated Civil Statutes had not become effective.

This case was instituted by bill of interpleader filed by the insurer, John Hancock Mutual Life Insurance Company, which paid into the registry of the court $9,000, the amount due under the certificate of insurance, and prayed that petitioner L. B. Sherman, administrator of the estate of Edna I. Roe, and respondent Raymond Roe, administrator of the estate of James Roe, be cited to answer and set up their respective claims. The case was tried on the answers and claims of the administrators of the two estates, and judgment was rendered by the court allowing $300 as attorney's fees to the insurer, to be paid out of the deposited fund, and adjudging that Raymond Roe, administrator of the estate of James Roe, recover $8,700, the balance of the sum on deposit. The Court of Civil Appeals affirmed the trial court's judgment. 258 S.W.2d 862.

The insured, James Roe, was an employee of Shaffer Tool Works, to which John Hancock Mutual Life Insurance Company had issued a group accidental death policy. Under that policy a certificate of insurance was issued to James Roe on July 12, 1940, insuring his life for $2,000 in the event of accidental death. The certificate named Wanda Roe, then James Roe's wife as beneficiary, but reserved the right to the insured to change the beneficiary. Edna I. Roe became the wife of James Roe on December 17, 1946. She was designated as beneficiary under the terms of the certificate on September 29, 1947. The amount payable under the certificate was changed to $9,000 on March 1, 1950. The premium contributions paid by James Roe from the date of the issuance of the certificate to December 17, 1946, the date of his marriage to Edna I. Roe, amounted to $42.15, and the premium contributions thereafter paid by him amounted to $50.10. While the group policy and the certificate were in effect James Roe and his wife, Edna Roe, were killed as above stated in a common disaster, an airplane accident.

The certificate provides that: 'Indemnity for loss of life of the Employee is payable to the beneficiary if surviving the Employee, and otherwise to the estate of the Employee.' The group policy contains substantially the same provision.

The Court of Civil Appeals in its first opinion held that because plaintiff in error, the administrator of the estate of Edna I. Roe, failed to prove that the wife survived the husband the estate of the husband was the beneficiary and the proceeds of the certificate of insurance should be paid to the administrator of the husband's estate, and in so holding affirmed the judgment of the district court which adjudged to that administrator the funds which had been deposited in the court. In writing on motion for rehearing, and although it overruled the motion and left the affirmance of the trial court's judgment standing, the Court of Civil Appeals stated that it was not deemed within its jurisdiction 'to determine when, if ever, or where, the heirs of Edna I. Roe have a right to assert that the proceeds of this policy were community property.' (258 S.W.2d 865.)

Both parties express dissatisfaction with the last opinion of the Court of Civil Appeals because it seems to leave open to further litigation the question as to the ownership of or right to the proceeds of the certificate of insurance, and they insist that the question should be determined in this cause. We think that position is well taken. We understand the judgment of the district court to have disposed of the question of ownership of or right to the proceeds as between the two claimants, and in our opinion that question was within the pleadings of the parties. Petitioner, the administrator of the estate of Edna I. Roe, presented two points in his brief in the Court of Civil Appeals, the first that the trial court erred in not ordering all of the $8,700 to be paid to him, and the second that the trial court erred in not awarding one-half of the proceeds of the certificate of insurance to him and the other one-half of the proceeds to Raymond Roe, administrator of the estate of James Roe.

The Court of Civil Appeals, in rejecting petitioner's claim to all of the proceeds, held that since the certificate of insurance is payable to the wife 'if surviving the Employee, and otherwise to the estate of the Employee's it was necessary under the very terms of the certificate for the administrator of the wife's estate to prove that the wife did survive the insured, and that when he failed to meet that burden (as of course he must fail in this case) 'the alternate provision came into effect and the named beneficiary was the estate of the husband', and his administrator was entitled to the proceeds. Hildebrandt v. Ames, 27 Tex.Civ.App. 377, 66 S.W. 128, application for writ of error refused, is cited by the Court of Civil Appeals to support its decision, and that case does lend support.

The opinion in Hildebrandt v. Ames shows that each of the two parties, the administrator of the estate of the wife and the administrator of the estate of the husband, was claiming the entire proceeds of the policy. It does not appear that any claim was asserted that the proceeds should be treated as community property, and the opinion contains no intimation that such a claim could or could not be successfully asserted. The decision turns wholly on the burden of proof, the final ruling being that because the administrator of the estate of the wife failed to make proof that the wife survived the husband the proceeds of the policy reverted to the estate of the husband.

So in the case before us it has been held by the Court of Civil Appeals that the administrator of the wife's estate cannot recover the entire proceeds of the policy in the wife's right as beneficiary because he has not established the fact that she survived her husband, that is, that her right to the proceeds rested upon a contingency, her survival, and under that ruling all proceeds are awarded to the representative of the husband. It would not be an unreasonable construction of the terms of the certificate of insurance to hold that the right of the administrator of the husband's estate to recover the proceeds under the terms of the policy also rests upon a contingency. The certificate provides that indemnity for loss of life is payable to the beneficiary, the wife, 'if surviving the Employee, and otherwise to the estate of the Employee.' The 'and otherwise' seems to mean that the indemnity is payable to the estate of the husband if he survives the wife, or if death is simultaneous. Here it is impossible to prove that the husband died first or that the wife died first, or that death was simultaneous. Under the decisions there is no presumption either of survivorship or of simultaneous death. Paden v. Briscoe, 81 Tex. 563, 17 S.W. 42; 25 C.J.S., Death, § 11, pages 1069-1071, Sec. 11; 16 Am.Jur., pp. 33-34, Secs. 40-41.

A decision disposing of the case for failure to meet a burden of proof that cannot possibly be met is, to say the least, unsatisfactory. And so we reach the question on which the decision of this controversy must finally turn, that is, whether the proceeds of the certificate of insurance payable on the death of the insured and now on deposit in court should be held to be community property and awarded one-half to each of the administrators.

If the administrator of the wife's estate is entitled to one-half of the proceeds of the certificate of insurance, it is not because of any vested interest of the wife prior to her husband's death. It was held in Volunteer State Life Insurance Co. v. Hardin, 145 Tex. 245, 197 S.W.2d 105, 168 A.L.R. 337, that the wife, the beneficiary in a policy insuring her husband, with the right reserved to the husband to change the beneficiary, has prior to the death of the insured no vested interest in the policy or in the proceeds of it, even though the policy is taken out during marriage and all premiums are paid out of community funds, and that the insured may at will change the beneficiary and thereby divest a prior beneficiary of all interest in the proceeds of the policy. This means that such a policy prior to the insured's death is not property in which the wife owns an interest. See also Howard v. Howard, Tex.Civ.App., 158 S.W.2d 591, application for writ of error refused.

The oninion in Volunteer State Life Insurance Co. v. Hardin, citing Womack v. Womack, 141 Tex. 299, 172 S.W.2d 307, further shows that under certain circumstances the wife may share in the cash surrender value of such a policy of insurance. We need not enter into a discussion of that right and the limitations on it, as we are not here concerned with cash surrender value. We are concerned with the proceeds of an insurance policy after the death of the insured.

Petitioner cites Womack v. Womack, 141 Tex. 299, 172 S.W.2d 307, to support his statement that insurance is now considered property by our courts. In that case the only question decided was that the cash surrender value of policies on the life of the husband obtained after marriage, and on which all premiums had been paid out of community funds, was community property to be taken into consideration in the...