O'Connor v. Travelers Insurance

California Court of Appeal Apr 21, 1959 No. Civ. 23274Published

Before: Wood (Parker)

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Holding. The court held that the insurance proceeds were not community property because the premiums were paid by the employer as a voluntary contribution and the husband's conduct implied consent to the wife's separate treatment of her earnings and the beneficiary change.

Issues

Whether group life insurance premiums paid by an employer constitute community property.
Whether a spouse's change of beneficiary on a life insurance policy without the other spouse's express consent is valid when the other spouse had knowledge and impliedly consented to the arrangement.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The premiums paid on the policies were entirely paid by Ruth’s employer as a voluntary contribution by the employer, and said premiums were not attributable to or a part of the earnings of Ruth.”

“The proceeds of said policies, payable on the death of Ruth, were not community property of Ruth and her husband.”

“It is implicit, in the finding that the premiums and the proceeds were not community property, that the act of the wife in changing the beneficiary was done with his knowledge and consent and was not in contravention of his rights.”

WOOD (Parker), J.

Action by Lawrence M. O’Connor, a minor, by his guardian ad litem, for a declaration of his rights with respect to the proceeds of two group insurance policies in which his mother, Ruth M. Lonon, was the named insured and he was the named beneficiary. Ruth was formerly married to Dalton O’Connor. Plaintiff Lawrence O’Connor is the issue of that marriage. After the termination of that marriage, Ruth married Charles Lonon, a defendant herein.

In July, 1954, while Ruth and Charles were husband and wife, she became an employee of Hansen-Lynn Company, a corporation. That company had an arrangement with the

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Travelers Insurance Company whereby the insurance company issued policies of group life insurance and group accident insurance for the benefit of the employees of the Hansen-Lynn Company. In September, 1954, Ruth became insured under those policies. The amount of her insurance under each policy was $2,500. Her employer paid all the premiums for the insurance directly to the insurance company, and no deductions for such premiums were made from Ruth’s salary.

When Ruth became insured, the beneficiary named in the policies was her husband, defendant Charles Lonon. In each policy there was a provision that she had the right at any time to designate a different beneficiary. About November 15, 1955, Ruth designated her son Lawrence as beneficiary in each policy in the place of her husband. She was killed in an automobile accident on May 20, 1956.

The insurance company alleged in its answer, among other things, that it was a stakeholder of the proceeds of the policies, namely, $5,000, and it was ready to deliver the money as directed by the court. Apparently, the $5,000 was deposited in court by the insurance company.

Pursuant to stipulation of the other parties, and pursuant to order of court based on the stipulation, $2,500 of said proceeds was delivered to plaintiff Lawrence. The remainder of the proceeds $2,500, was the amount in controversy between plaintiff Lawrence and the defendant Charles.

The judgment was that plaintiff Lawrence was entitled to the remainder of the proceeds of the policies, and that the clerk of the court should deliver to the plaintiff the said amount of $2,500.

O'Connor v. Travelers Insurance

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