Small v. Bartyzel

• Decision Date: 14 February 1947
• Docket Number: 29920.
• Citation: 177 P.2d 391,27 Wn.2d 176
• Parties: SMALL v. BARTYZEL et al.
• Court: Washington Supreme Court

177 P.2d 391

27 Wn.2d 176

SMALL v. BARTYZEL et al.

No. 29920.

Supreme Court of Washington, En Banc.

February 14, 1947

Action by Katherine G. Small, a widow, individually and as administratrix of the estate of Clarence A. Small, deceased against Edna Small Bartyzel and Walter L. Bartyzel, her husband, to recover the proceeds of a group insurance policy upon life of Clarence A. Small. From an adverse judgment, the defendant Edna Small Bartyzel alone appeals.

Affirmed.

MALLERY C.J., dissenting.

Appeal from Superior Court, King County; Matthew W. Hill, judge.

Jrving D. Smith, of Seattle, for appellant.

Irving D. Smith, of Seattle, for appellant. for respondent.

SIMPSON Justice.

This action was instituted by Katherine G. Small, individually and as administratrix of the estate of her deceased husband Clarence A. Small, to recover the proceeds of a group insurance policy upon the life of Clarence A. Small. In her complaint the plaintiff asked the court to apportion the insurance between the parties in the amount each should be entitled to receive.

The answer admitted the receipt of the $3,000 insurance and alleged that the equities were in defendant's (Edna Small Bartyzel's) favor. In addition the answer contained an allegation that plaintiff was estopped from claiming any portion of the $3,000.

The reply put in issue the allegations contained in the answer.

At the conclusion of the trial, the court made findings of fact and conclusions of law and entered a judgment favorable to plaintiff as administratrix of her husband's estate, in the sum of $2,576.09.

Defendant has appealed. The assignments of error, twenty in number, call in question the findings and conclusions of the trial court, and the decree entered by it.

The undisputed facts are as follows: Clarence A. Small was a locomotive engineer, employed by the Northern Pacific Railway Company, and lived in Seattle, Washington. Many years ago he was married to Mabel G. Smith, but they were divorced in 1928. The appellant, Edna Small Bartyzel, was their only child. January 18, 1938, Clarence A. Small and the respondent, Katherine G. Small, were married and remained husband and wife until his death August 21, 1944. Prior to his marriage to respondent, Clarence A. Small was insured in the Aetna Life Insurance Company of Hartford, Connecticut. That company had issued policies of group insurance to the Northern Pacific Railway Company upon the lives of its employees. Two policies were originally issued in 1924. Group policy No. 2360 was for $500 and group policy No. 2360-S was for $3,000. Both policies lapsed, and the last one named was replaced by insurance in the sum of $3,000 under policy No. 7093. The insurance policies had no loan value, cash surrender value, or paid-up insurance value, as is ordinarily true of a life insurance policy. The premiums on the policy were paid by Small at the rate of $2.70 per month, and at the time of his death, he had paid a total of $440.66. When he received the certificate he designated appellant as the beneficiary. Mr. Small married the respondent a little less than thirteen months after he had received the certificate of insurance. Ninety-two monthly payments were made upon this certificate, seventy-nine of which were made after his second marriage from funds he earned as a locomotive engineer. After Mr. Small's death, appellant made proof of death, and received $3,000 from the insurance company. The trial court ruled that appellant was entitled to receive 13/92 and respondent 79/92 of the $3,000 which had been paid to appellant.

The question in this case is whether, when an unmarried man secures a policy of life insurance, designates a beneficiary, pays a few months' premiums on the policy, gets married, and thereafter pays premiums from the community earnings, the proceeds of the policy should be divided between the named beneficiary and the deceased's estate.

Appellant takes the position that the contract issued in 1924 was continuous until the date of his death, and that the beneficiary named in the policy became the absolute owner of the proceeds of that policy. Many authorities have been cited by counsel for appellant to support his contention. We have read the cases cited by counsel and realize that they have a bearing upon the issues presented here. However, we do not deem it necessary to discuss them in this opinion, for the reason that the question Before us has been fully discussed, analyzed, and decided by this court in Occidental Life Insurance Co. v. Powers, 192 Wash. 475, 74 P.2d 27, 114 A.L.R. 531, in which case this court was called upon to decide whether a married man could name his mother and secretary as beneficiaries in a life insurance policy paid for with community funds. We held that he could not do so, and in deciding the questions, considered numerous cases, including several which had been decided by this court. The rule laid down in the above-cited case was followed in Re Coffey's Estate, 195 Wash. 379, 81 P.2d 283, and in passing upon the question presented the court quoted from the Powers case [192 Wash. 475, 74 P.2d 31] as follows:

'In this state, insurance or the proceeds of insurance are not mere expectancies of choses in action, but are property, and if the premiums are paid by the assets of the community, they constitute community property.'

The reason for the rule as announced by the Powers case was amplified in Re Towey's Estate, 22 Wash.2d 212, 155 P.2d 273, where it is said: 'In Occidental Life Ins. Co. v. Powers, supra, we held that 'insurance, or the proceeds of insurance are not mere expectancies, or choses in action, but are property,' and if the insurance premiums are paid with assets of the community they constitute community property; that is, the wife has a vested property right in all of the community property equal to that of her husband, and neither spouse may, without consent of the other, make gifts of the community property even to his or her own relatives. The husband may not, as statutory agent or manager of the marital community, change the beneficiary of the insurance policy from his spouse to another person and thereby make a gift of community property to anyone against the consent of his wife.'

The holding that the proceeds of the husband's life insurance policy in cases where the premiums are paid from community funds, belongs to the community, is clearly apparent from the very nature of the community property system. That system, adopted by legislative action many years since, provides that all property, with certain exceptions not pertinent here, acquired after marriage by either husband or wife, or both, is community property. Our community property system conclusively determines that everything that is produced by either spouse, whether it be by toil or talent, is earned by the community and belongs to the community. It is true that the husband is the manager of the community property, but as such he acts as trustee for the community, and cannot use community property of any kind for any purpose except for the good of the community.

After a second marriage, Mr. Small earned the sums of money which were used to pay the presiums on the insurance policy. That money belonged to the community consisting of himself and Katherine G. Small. It follows that the insurance paid for by community funds was the property of the community, and that Mrs. Small was entitled to recover that property as an asset of her deceased husband's estate.

Appellant has suggested that respondent was estopped to recovery. We have considered the question, but do not feel that there are any of the elements of estoppel in this case. It is quite true that Mr. Small paid the insurance installments after his second marriage from his earnings, and it may have been with the knowledge of his wife, but that in itself would not estop her from maintaining this action. Fspecially is that true when she maintains the action on behalf of the estate of her deceased husband.

We find no error in the record and therefore affirm the judgment.

MILLARD, STEINERT, ROBINSON, JEFFERS, SCHWELLENBACH, and ABEL, JJ., concur.

MALLERY Chief Justice (dissenting).

The landmark case upon which the majority decision purports to be based is Occidental Life Insurance Co. v. Powers, 192 Wash. 475, 74 P.2d 27, 114 A.L.R. 531. In that case Mr. Powers took out a $5,000-endowment policy of life insurance, in which his wife was named as the sole beneficiary. The premiums were all paid out of community funds. Later he excluded his wife by designating two new beneficiaries; namely, his mother and his secretary. The endowment did not accrue during his lifetime nor did he take its cash surrender value. After his death his wife successfully brought an action to recover the full amount of the avails of the insurance. The court held that by reason of the surrender value and endowment features of the policy it was community property as distinguished from a mere expectancy. The evil the opinion was aiming at is expressed in the following quotation from it: '* * * It is common knowledge that in many families a large portion of...