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District Court of Appeal, Third District, California.


Civ. 8208.

Decided: January 29, 1953

McAllister & Johnson, Sacramento, for appellant. Donald B. Richardson, San Jose, Thomas J. Randazzo, San Jose, for respondent.

This is an appeal by plaintiff from an adverse judgment in an action by which she sought a declaration of her rights under an insurance policy included in a property settlement agreement previously entered into between herself and her then husband, Nathan B. Thorp, deceased.

The facts, which are not in controversy, show that plaintiff and Nathan B. Thorp, were married on November 20, 1933; that on September 29, 1943 they entered into a property settlement agreement; that shortly thereafter she was granted an interlocutory decree of divorce which became final on November 15, 1944. According to the testimony of plaintiff which was corroborated by other witnesses, including decedent's second wife, she and the deceased remained on friendly terms during the seven years intervening between the date of the execution of the property settlement agreement and his death. There was further testimony on behalf of plaintiff that the deceased had stated that he would take care of his former wife; that she would never want for anything and that he had left a life insurance policy to her. However, respondent Randazzo, over objection of plaintiff's attorney, testified that he and the deceased had discussed the policy on numerous occasions between 1943 and 1950; that the deceased had stated many times he intended to change the policy so as to make it payable to his estate; that in March 1948, decedent was under the impression that the policy had lapsed and he took no further action in regard to it.

The particular paragraph of said agreement which forms the basis of plaintiff's action is as follows:

‘Second party does hereby waive all claims to any benefits that she may have at present, or which may hereafter be derived from the following described life insurance policies upon the life of first party, including the community interest of second party therein, or in the premiums paid for said policies, and agrees to execute any and all documents that may be required by said insurance companies to complete the release of the interest of said second party in said insurance policies;

Western States Life Insurance Company,

Policy No. 422, 482; and

New York Life Insurance Company,

Policy No. 16180557.'

At the time of the execution of said agreement plaintiff also executed and delivered to either the deceased or his attorney a printed form entitled ‘Application for Change of Beneficiary’ and the same remained in the attorney's possession until Nathan's death. The so-called application was never signed by Nathan nor was it ever delivered to the insurance company. The evidence further shows that sometime between 1943 and 1947 it was changed by Thorp thereby making the policy payable to his estate rather than to plaintiff who originally was named the beneficiary therein.

The pertinent findings of the trial court were that plaintiff had received and accepted all benefits to which she was entitled under the terms of said agreement; that deceased had performed all acts required of him thereunder; that plaintiff was estopped from asserting any claim to the proceeds of the policy for the reason that said agreement was a complete settlement of all the property rights of the parties and that by the terms thereof plaintiff waived all interest in said policy, its premiums or its proceeds; that by the execution of said agreement the parties intended to relinquish and waive all right to succeed or take any property from the estate of the other; that said waiver was effective from the date of the execution of said agreement, and that the defendant Randazzo, as executor of Nathan's estate, was the owner and entitled to the possession of the proceeds of said policy.

It is appellant's contention (1) that since she was the named beneficiary in said policy at the time of Thorp's death she was not barred by the terms of the property settlement agreement from receiving the proceeds of said insurance policy, and (2) that there is no evidence to support the finding of the trial court that she was estopped from asserting any claim to the proceeds of the policy. It would appear that the questions raised find complete answer in the cases of Estate of Crane, 6 Cal.2d 218, 57 P.2d 476, 104 A.L.R. 1101 and Grimm v. Grimm, 26 Cal.2d 173, 157 P.2d 841.

In the Crane case, as here, there was a property settlement agreement and subsequent death of the husband. The contest was over a bequest to her of $1000.00. There it appeared that the agreement took from the wife all right or claim to an interest in the property of the husband either by virtue of her status as a wife, a widow or an heir. However, the agreement contained no renunciation of the right to receive future gifts whether inter vivos, by devise or by bequest. And the court further said, ‘As applied to such gift, we find in the agreement no basis for an estoppel against appellant with respect to the legacy claimed in the will.’ [5 Cal.2d 218, 57 P.2d 478.] The court further notes that they continued on friendly terms and that the will in which the legacy was contained had been executed some time prior to the date of the property settlement agreement and that the testator lived more than two years thereafter. Likewise, in the present case the evidence shows that although the so-called change of beneficiary form had been executed at the time of the execution of the property settlement agreement the deceased had not changed the beneficiary at the date of his death in July 1950, almost seven years after the execution of those two documents. Again, here, as in the Crane case, the parties continued friendly relations during the interval between the execution of the agreement and Thorp's death.

In the later case of Grimm v. Grimm, supra, a property settlement agreement was executed which, among other things, included an insurance policy on the life of the husband wherein the wife was named as beneficiary. The agreement made the policy the separate property of the husband and gave him the right to change the beneficiary. However, he died slightly more than two years after the execution of the agreement without having made such a change. There, as in the present case, the beneficiary's claim to the proceeds of the policy was contested by the administrator of the husband's estate. In resolving the problem there presented the Supreme Court stated that although a wife released her interest in such an insurance policy she could still be a beneficiary thereof.

This is true, the court there says, since ‘If she executes such a release and the husband revokes his designation of her as beneficiary she has no right to the insurance proceeds upon his death; but if he fails to revoke his designation of her as beneficiary, she is entitled, like any other beneficiary, to the proceeds of the policy at the time of his death.’ [26 Cal.2d 173, 157 P.2d 842.] However, the court noted, if the parties specifically agree that no rights were to accrue to her even though she remain the beneficiary at the time of his death she would not be entitled to such proceeds. Thus, the court says, the question to be determined is whether the parties agreed, ‘not only that the policy should become the separate property of the husband, but that no rights should accrue to plaintiff even though she remained the beneficiary at the time of the husband's death.’

‘The interest of a beneficiary designated by an insured who has the right to change the beneficiary is', the court there held in 26 Cal.2d at page 175, 157 P.2d at page 842, ‘like that of a legatee under a will, a mere expectancy of a gift at the time of the insured's death’, and when such expectancy has developed into a right it may be enforced in equity.

And, continuing 26 Cal.2d on page 176, 157 P.2d on page 843 the court said that ‘In interpreting property settlement agreements courts weigh carefully the language of the agreements before concluding that they eliminate rights the disavowal of which is not necessarily connected with the purpose of such agreements.’ In other words, general expressions or clauses in such agreements ‘are not to be construed as including an assignment or renunciation of expectancies and that a beneficiary therefore retains his status under an insurance policy or under a will if it does not clearly appear from the agreement that in addition to the segregation of the property of the spouses it was intended to deprive either spouse of the right to take property under a will or an insurance contract of the other.’ And where, as in the present case, ‘the husband has the power to revoke his will or to change the beneficiary named in an insurance policy his failure to do so ordinarily indicated that he did not wish to effect a change so that in effect his failure to act amounts to a confirmation of the will or the designation of the wife in the insurance policy.’

Frequently, the court noted, a husband is willing to grant more to her as a matter of bounty, than the agreement provides he is willing to give as a matter of right, since the affection of the spouses for each other may well survive separation agreements and divorce proceedings.

In the present case, as in Grimm v. Grimm, supra, under the particular provision of the property settlement agreement the insurance policy was like any other community property that was to become the separate property of the husband. Although she did execute a change of beneficiary form it was for him to decide whether to use it or not. Again, here, as in both the Crane and Grimm cases, it is significant that the husband lived for several years after making the agreement—in fact the deceased here lived longer thereafter than either of the decedents in those cases. It is of further significance in the present case that he did remove her as the beneficiary in the New York Life policy but that he did not do so in the policy here in question even though his counsel repeatedly requested him to do so.

The judgment is reversed.

PEEK, Justice.

VAN DYKE, P. J., and SCHOTTKY, J., concur.