Silen v. Silen, 32764

• Decision Date: 21 June 1954
• Docket Number: No. 32764,32764
• Citation: 271 P.2d 674,44 Wn.2d 884
• Parties: SILEN, v. SILEN.
• Court: Washington Supreme Court

Page 884

44 Wn.2d 884

271 P.2d 674

SILEN, v. SILEN.

No. 32764.

Supreme Court of Washington, Department 2.

June 21, 1954.

Mifflin & Mifflin, Rummens, Griffin, Short & Cressman, Seattle, for appellant.

Levinson & Friedman and Koenigsberg & Roberts, Seattle, for respondent.

DONWORTH, Justice.

Defendant wife appeals from an order of the superior court directing that she desist from interfering with plaintiff husband's right to receive a three-thousand-dollar fund which will result from the conversion of an endowment insurance policy on his life into a straight life insurance policy.

A default divorce was granted to defendant wife from plaintiff husband on March 31, 1953. The divorce decree confirmed a stipulation and property settlement agreement executed by the parties on March 30, 1953, and also confirmed a supplement thereto entered into by them on the day of the divorce.

By terms of the stipulation and property settlement agreement the property of the parties was divided between them as provided therein and the property awarded to each party became his separate property immediately. The agreement provided that plaintiff husband was to pay defendant wife certain alimony for a period of eighteen months and one hundred dollars a month for the support of their minor son (whose custody was awarded to defendant) until the son, then fourteen years old, attained his majority.

The supplement to the stipulation and property settlement agreement (hereafter referred to as the supplemental agreement) disposed of two insurance policies, each in the sum of ten thousand dollars, on the life of plaintiff.

We set out in full that part of the supplemental agreement which caused the controversy resulting in this appeal:

'As a supplement to the Stipulation and Property Settlement Agreement executed and delivered between plaintiff and defendant on March 30, 1953, the plaintiff and defendant do hereby further stipulate and agree as follows:

'I

'That omitted from the said Stipulation were two policies of life insurance each in the sum of $10,000.00 on the life of plaintiff not theretofore disclosed by him, being 10-year Endowment Policy No. 718-71-23, dated October 30, 1950 on life of plaintiff in Mutual Life Insurance Company of New York and Policy No. 718-71-24 dated October 30, 1950, on life of plaintiff in Mutual Life Insurance Company of New York, in each of which defendant releases her community interest and which policies become the property of plaintiff subject, however, to his performance of the remaining provisions of this Supplement.

'II

'That one of said policies of life insurance on the life of plaintiff in Mutual Life Insurance Company of New York shall be used by plaintiff to perform that portion of paragraph VI. of said Stipulation pursuant to which plaintiff shall irrevocably constitute James Stanton Silen, minor son of plaintiff and defendant, as beneficiary in such policy of life insurance on the life of plaintiff in the sum of $10,000.00, keeping and maintaining said policy in good standing at all times, free from loan or draw against the same and with premiums thereon paid by plaintiff, without contribution from defendant, until said minor son attains the age of 21 years, whereupon such policy of insurance (herewith delivered to Wesley J. Mifflin as attorney for defendant and to be held by him until said minor attains the age of 21 years) shall be released to plaintiff.

'III

'That on the other of said policies on the life of plaintiff in Mutual Life Insurance Company of New York the plaintiff shall likewise irrevocably constitute James Stanton Silen, minor son of plaintiff and defendant, as beneficiary thereon, keeping and maintaining said policy of life insurance in good standing at all times, free from loan or draw against the same, with premiums paid thereon by plaintiff, without contribution from defendant, until said minor son of plaintiff and defendant attains the age of 25 years, whereupon said policy of insurance (herewith delivered to Wesley J. Mifflin as attorney for defendant, to be held by him hereunder) shall be released to plaintiff, provided, however, that, upon the minor son of plaintiff and defendant attaining the age of 21 years, plaintiff may then elect to use either one of said policies on his life in Mutual Life Insurance Company of New York for the purpose of fulfilling his remaining obligation hereunder; and further provided, however, that plaintiff may at any time convert either of said policies to straight life so long as the amount of the policy so converted remains at $10,000.00.' (Italics ours.)

Both the original stipulation and property settlement agreement and the supplemental agreement were drawn up by the attorneys for defendant into whose possession the policies had been delivered.

In August, 1953, plaintiff wanted to convert both policies into straight life insurance policies, in accordance with the final proviso to paragraph III of the supplemental agreement. Before the attorneys for defendant surrendered the two policies to the representative of the insurance company in order that the conversion could be accomplished, they discovered that the conversion of the endowment policy would result in the release of approximately three thousand dollars.

An endowment contract, it should be noted, is

'* * * a policy which agrees to pay to the insured, if living at the expiration of a certain period, a specified amount of money; and in the event of his death in the interim, agrees to pay the face amount of the policy to a designated beneficiary.' 1 Appleman, Insurance Law and Practice, p. 11, § 4.

An 'ordinary' or 'straight life' insurance policy, on the other hand, is defined as '* * * written upon the life of an individual for a fixed amount at a definite annual premium. A premium is paid upon it each year in the same amount during the entire life-time of the insured. It never becomes paid up * * *' 1 Appleman, Insurance Law and Practice, p. 8, § 2.

These definitions make it plain that there is considerable difference between an endowment policy and a straight life policy, inasmuch as the endowment policy combines an investment program with life insurance whereas a straight life policy does not. The supplemental agreement drawn by appellant's attorneys ignored the difference between endowment and straight life policies, however, and made no provision as to the disposition of the fund that was certain to result from specifically permitting the conversion of the endowment policy to straight life.

On August 28, 1953, defendant through her attorneys deposited the policies with the insurance company with a written request for the company to hold the three thousand dollars

'* * * in your possession as the property of Mr. Silen but impounded and undisbursed until he shall have performed his obligations under the Supplement to make payment of the premiums on the two $10,000.00 policies until the son attains the age of 21 years in the one instance and the age of 25 years in the other; it being our position that such $3,000.00 proceeds are held by you subject to your payment of premiums on such policies out of the same if such premiums are not paid by Mr. Silen when they become due.' (Italics ours.)

When plaintiff learned that defendant was making the claim that the three-thousand-dollar fund resulting from the conversion of the policies should be held by the insurance company as security for the payment of future premiums, he obtained an order requiring defendant to appear and show cause why she should not be ordered to desist from interfering with plaintiff's right to convert the policies and to receive the avails of the conversion.

The hearing on the show cause order was held September 21, 1953. The matter was heard upon affidavits and documentary evidence. The basic facts were not in dispute. At the conclusion of the hearing the trial court entered an order...