United Ben. Life Ins. Co. v. Price

• Decision Date: 05 May 1955
• Docket Number: No. 33127,33127
• Citation: 283 P.2d 119,46 Wn.2d 587
• Court: Washington Supreme Court
• Parties: UNITED BENEFIT LIFE INSURANCE COMPANY, a corporation, Plaintiff, v. William F. PRICE, Administrator of the Estate of Milton R. Price, deceased, Defendant and Respondent, Anna A. Price, Defendant and Appellant, Beulah H. Reeder, Defendant.

Page 587

46 Wn.2d 587

283 P.2d 119

UNITED BENEFIT LIFE INSURANCE COMPANY, a corporation, Plaintiff, v. William F. PRICE, Administrator of the Estate of Milton R Price, deceased, Defendant and Respondent Anna A. Price, Defendant and Appellant Beulah H. Reeder, Defendant.

No. 33127.

Supreme Court of Washington, Department 2.

May 5, 1955.

Torlief P. Ulvestad, Seattle, Ballinger, Hutson & Eberharter, Seattle, for appellant.

Meier & Murray, Seattle, for William F. Price, Administrator.

HILL, Justice.

Quaere:

Is the named beneficiary in a life insurance policy or the administrator of the insured's estate entitled to the proceeds of the policy which have been paid into court by the insurance company in an interpleader action where: (a) the insured had the right to change beneficiaries; (b) the named beneficiary was the wife of the insured at the time the policy was issued but had subsequently been divorced from him; (c) the divorce decree confirmed and approved the property settlement agreement which had been set out in full in the findings of fact, and then, pursuant thereto and adopting the language thereof, awarded to the wife specifically described items of real and personal property, including $8,615 in cash, and awarded to the husband: (1) all insurance policies on his life (the policy in question was conceded to be community property at the time the divorce decree was entered), and (2) all other property of the parties, whether community or the separate property of the husband, other than the property awarded to the wife?

Answer:

The administrator of the insured's estate is entitled to the proceeds of the insurance policy under such a decree.

Reason:

Item (c) is decisive. We are not here primarily concerned with the terms of the property settlement agreement and the intention of the parties thereto, as was the case in Grimm v. Grimm, 1945, 26 Cal.2d 173, 157 P.2d 841, relied on by the nemed beneficiary in this case, but with the terms and effect of a divorce decree. We have frequently recognized '* * * that where a property settlement is approved by a divorce decree, the rights of the parties rest upon the decree rather than the property settlement.' Brown v. Brown, Wash., 1955, 281 P.2d 850, 852, citing In re Garrity's Estate, 1945, 22 Wash.2d 391, 156 P.2d 217. See, also, Bullock v. Bullock, 1924, 131 Wash. 339, 230 P. 130. Such a decree is more than the agreement of the parties--it becomes the superior court's disposition of the property of the parties properly before it. Unless that be so, the superior court failed to carry out the mandate of our statute to '* * * [make] such disposition of the property of the parties, * * * as shall appear just and equitable, * * *.' RCW 26.08.110, Rem. Supp.1949, § 997-11. Robinson v. Robinson, 1950, 37 Wash.2d 511, 225 P.2d 411, is of interest on the effect of such a decree.

The decree operates not only to vest in the spouse designated the property awarded to him or her, but to divest the other spouse of all interest in the property so awarded, except as the decree may otherwise designate. By the terms of the decree in question, the husband was not only awarded all policies of life insurance on his life, but all community property not specifically awarded to the wife. The interest of the beneficiary in the proceeds of an insurance policy belonging to the community (however the beneficiary's right may be defined), is an asset in which the community has a very real interest. This is indicated by a long line of cases, beginning with Occidental Life Insurance Co. v. Powers, 1937, 192 Wash. 475, 74 P.2d 27, 114 A.L.R. 531, restricting the right of a husband, as manager of the community, to make anyone except his wife or his estate the beneficiary of such a policy.

We see no reason to suppose that, in view of the plain language of the decree, the court contemplated that the wife was retaining any interest in any community assets other than the property specifically awarded to her. We consequently hold that by the decree she was divested of any interest she might have as the beneficiary under the policy of insurance conceded to be community property and awarded to the husband.

The cases of Mabbitt v. Wilkerson, 1952, 220 Ark. 270, 247 S.W.2d 201, and Metropolitan Life Ins. Co. v. Richardson, D.C. 1939, 27 F.Supp. 791, directly support our conclusion.

A somewhat different situation, but nonetheless significant as indicating the effect of a divorce decree upon the interest of a beneficiary, is found in Chilwell v. Chilwell 1940, 40 Cal.App.2d 550, 105 P.2d 122. There an Arizona divorce decree contained the exact language of the property settlement between the parties, and directed the husband to designate the two children of the parties as the beneficiaries of a certain insurance policy. He did not comply with the decree but, on his death, the children were held to be entitled to the proceeds of the policy, though never named as beneficiaries, the court holding that the property settlement incorporated in the decree constituted an equitable assignment of the proceeds of the policy.

Further Discussion:

We are prompted to amplify the discussion beyond the statement of the reasons for the decision heretofore given, because the question presented is one of first impression in this state and because the named insured has urged that we should follow the rule laid down in Grimm v. Grimm, supra.

At the outset, it should be stated that in the absence of a property settlement agreement, or a disposition of the property of the parties in a divorce decree, the weight of authority is that when a husband names his wife as the beneficiary in a life insurance policy on his own life, and thereafter they are divorced, but no change is made in the beneficiary, the fact of divorce does not in itself affect the right of the named beneficiary to the proceeds of the policy. Humphrey v. Mutual Life Ins. Co., 1915, 86 Wash. 672, 151 P. 100. See, also, annotation in 52 A.L.R. 386.

It is recognized that a property settlement agreement for the disposition of the property of the parties by a divorce decree may divest the named beneficiary of her right to the proceeds of the policy if that is intended, and the question becomes, What language is sufficient to evidence that intention? The named beneficiary's position on this appeal is, we think, fairly stated in the following excerpt from Meherin v. Meherin, 1950, 99 Cal.App.2d 596, 222 P.2d 305, 306:

"A wife as beneficiary under an insurance policy retains her status as such unless it clearly appears from the agreement that in addition to the segregation of the property of the spouses, it was intended to deprive her of the right to take under the insurance contract as beneficiary. * * * Such rights are waived only when it appears that the attention of the parties was directed to such expectancies and their intention to disclaim future rights that might develop from such expectancies was made clear in the contract."

The California cases are agreed that where a wife is named as beneficiary in a life insurance policy on her husband's life, she may, by property settlement agreement, divest herself of all interest as such beneficiary, even though she remains as the named beneficiary at the time of the husband's death.

This is true, even though no divorce follows the property settlement agreement, and even though the husband reserved no right to change the beneficiary. Meherin v. Meherin, supra.

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