Wilson v. Wilson

• Decision Date: 23 December 1949
• Docket Number: 31125.
• Citation: 35 Wn.2d 364,212 P.2d 1022
• Court: Washington Supreme Court
• Parties: WILSON et al. v. WILSON.

212 P.2d 1022

35 Wn.2d 364

WILSON et al. v. WILSON.

No. 31125.

Supreme Court of Washington

December 23, 1949

Department 2

Bernice D. Wilson, as the widow and executrix of the estate of John James Wilson, deceased, sued Isabel M. Wilson for a portion of the proceeds of an insurance policy on deceased's life.

From a judgment of the Superior Court, King County, Donald A McDonald, J., awarding defendant one-fifth of the proceeds of the policy paid for by insured's separate funds plaintiffs appealed.

The Supreme Court, Hill, J., modified the judgment and affirmed it as modified, holding that the widow could recover only three-fourths of the proceeds available for distribution as a beneficiary under the policy, and as the representative of the community estate, the amount by which one-fourth of such proceeds exceeded the amount awarded defendant, but that defendant was not entitled to interest on the sum awarded her from the date of insurer's payment thereof into the court until the date of the judgment.

Merritt Summers & Bucey, Seattle, for appellants.

Congdon, Clemans & Kasperson, Seattle, for respondent.

HILL Justice.

We are here confronted with another phase of the troublesome question of the rights of beneficiaries other than the surviving spouses under insurance policies paid for by both separate and community funds.

Premiums on a ten-thousand-dollar policy on the life of John James Wilson were paid over a period of Twenty years, for four years Before his marriage with separate funds and for sixteen years after his marriage with community funds. The original beneficiaries named in the policy were a brother and an aunt; some months after his marriage, Mr. Wilson made his wife and his sister the beneficiaries, in equal shares or all to the survivor; later, he changed the division between the beneficiaries to three fourths to his wife and one fourth to his sister, or all to the survivor, and it so remained until his death on March 6, 1947.

At the time of this death, there was an unpaid policy loan of $1,875, leaving $8,125 for distribution, three fourths of which would be $6,093.75, and one fourth would be $2,031.25. (There was also an item of prepaid interest on the policy loan, as to which there is now no controversy. That amount is excluded from the computations herein, to avoid confusion.)

Whatever may have been the claims of the parties at various stages of the controversy between the widow and the sister, it is now conceded that the maximum amount to which the sister may be entitled is two thousand dollars, that being the one fifth of the proceeds of the policy paid for by separate funds, although the insurance company paid a somewhat larger sum into court to await the determination of the controversy. The sister claims the sum of two thousand dollars, that being less that the one fourth of the proceeds of the policy to which she was entitled by its terms.

The circumstance that prevents the payment of one fourth of the proceeds available for distribution, i.e., $2,031.25, to the sister in accordance with the contract between the insurance company and the insured is that the community has a four-fifths interest in the proceeds of the policy, and the amount which the insured could give to anyone other than his wife is limited to the one-fifth interest in the total proceeds of the policy paid for by the insured's separate funds. Small v. Bartyzel, 27 Wash.2d 176, 177 P.2d 391. The difference between the amount which the sister could receive under the policy and the one fourth of the proceeds of the policy available for distribution is $31.25, and that amount is community property and goes to the widow, not as a beneficiary but as the representative of the community estate. That is, in substance, the disposition of the case made by the trial court, and it is, in our opinion, correct.

The widow claims that, as the representative of the community estate, she is entitled to receive eight thousand dollars, or four fifths of the proceeds of the policy, because that is in proportion with the premiums paid with community funds. (Of this amount she would be entitled to receive $6,125 in cash, because $1,875 of it was used to pay a community debt represented by the policy loan.) It is her further contention that, as a beneficiary, she is entitled to fifteen hundred of the remaining two thousand dollars, since the policy provides that she is to receive three fourths of the proceeds thereof. This would leave one fourth of two thousand dollars, or five hundred dollars, for the sister.

To arrive at that result, her position must be that she takes no part of the four fifths of the proceeds paid for by community funds as a beneficiary, but takes that four fifths as the representative of the community estate; that the only portion of the proceeds of the policy which can be distributed in accordance with the terms of the policy is the one fifth paid for by separate funds; and that, as one of the beneficiaries named in the policy, she is entitled to three fouths of that one fifth.

In this particular situation, this would represent a most desirable result from the widow's standpoint, since she is the sole devisee and legatee in her husband's will (except for two bequests of one dollar each) and there are no claims against...