Case Name: Phynies and Flora CRAWFORD, Petitioners, v. Martha Shoaf COLEMAN a/n/f of Cornell Warren Shoaf, a Minor, Respondent
Court: Supreme Court of Texas
Jurisdiction: Texas
Decision Date: 1987-02-18
Citations: 726 S.W.2d 9
Docket Number: No. C-5039
Parties: Phynies and Flora CRAWFORD, Petitioners, v. Martha Shoaf COLEMAN a/n/f of Cornell Warren Shoaf, a Minor, Respondent.
Judges: Concurring and dissenting opinion by KILGARLIN, J., joined by CAMPBELL, J.
Reporter: South Western Reporter Second Series
Volume: 726
Pages: 9–14

Head Matter:
Phynies and Flora CRAWFORD, Petitioners, v. Martha Shoaf COLEMAN a/n/f of Cornell Warren Shoaf, a Minor, Respondent.
No. C-5039.
Supreme Court of Texas.
Feb. 18, 1987.
Rehearing Denied April 8, 1987.
Mark Huffman, Menaker & Huffman, Dallas, for petitioners.
Gerald A. Woolf, Smith Abney & Woolf, Houston, S.C. Cocanower, Joann Reyes, Fort Worth, for respondent.

Opinion:
SPEARS, Justice.
This is an insurance disqualification case involving the distribution of proceeds of life insurance policies. The trial court disqualified the primary beneficiary under the policy and awarded the proceeds to the contingent beneficiaries. The court of appeals affirmed. 701 S.W.2d 80 (Tex.App. 1985). We reverse that part of the court of appeals judgment awarding proceeds to one of the contingent beneficiaries and render judgment for Phynies and Flora Crawford.
On May 14, 1979, Sandra Shoaf was stabbed to death by her husband, Cornelius Shoaf. Sandra's life was insured under four insurance policies, each designating Cornelius as the primary beneficiary. The trial court disqualified Cornelius from receiving Sandra's death benefits because the jury found that Cornelius willfully caused Sandra's death. The contingent beneficiaries under the policies are Sandra's parents, Phynies and Flora Crawford (the Crawfords) and Sandra's stepson, Cornell. Cornell is Cornelius's son by a prior marriage. Martha Coleman is Cornell's mother.
After disqualifying Cornelius, the trial court awarded the proceeds of two of the four policies to the Crawfords as the contingent beneficiaries under those policies. Those proceeds awarded to the Crawfords are not a part of this appeal. The trial court also awarded the proceeds of the remaining two policies, Equitable Life Insurance Society of the United States policy No. N 78 227 787 and Metropolitan Life Insurance Company policy No. 28500-G, to Cornell Shoaf as the contingent benefi ciary. The court of appeals affirmed the trial court's judgment. The Crawfords dispute the award of the benefits of these two policies to Cornell.
The Equitable policy named Cornelius Shoaf as the "insured," and Sandra as the "insured spouse" under a family plan of insurance included in the policy. The pre-printed language of the policy provides that the "beneficiary" of the insured spouse is "the insured, if living; if not living, the surviving children of the insured."
The Metropolitan policy was obtained by Cornelius Shoaf through his employment with the State of Texas as authorized by the Texas Employees Uniform Group Insurance Beneficiary Act, TEX.INS.CODE ANN. art. 3.50-2 (Vernon 1981). Sandra's life was insured under this policy at Cornelius's option. The preprinted beneficiary designations in this policy awarded proceeds at the insured's death to the insured's beneficiary, then to the insured's spouse, then to the insured's children, and then to the insured's parents.
It is undisputed that the distribution of these policy proceeds is governed by TEX. INS.CODE ANN. § 21.23 (Vernon 1981). Section 21.23 states:
The interest of a beneficiary in a life insurance policy or contract heretofore or hereinafter issued shall be forfeited when the beneficiary is the principal or an accomplice in willfully bringing about the death of the insured. When such is the case, the nearest relative of the insured shall receive said insurance.
In construing § 21.23, this court has said that insurance proceeds are distributed to the nearest relative of the insured only "if all of the beneficiaries, primary and contingent, are disqualified from receiving such proceeds." Deveroex v. Nelson, 529 S.W.2d 510, 513 (Tex.1975). In Deveroex, the primary beneficiary murdered the insured. We construed § 21.23 as directing distribution of the proceeds to the insured's adoptive son who was a designated beneficiary under the policy rather than awarding the proceeds to the adopted son and the insured's natural son who was not designated as a beneficiary.
The Crawfords argue that the proceeds of the Equitable policy and the Metropolitan policy covering Sandra's life are distributable to them because they are Sandra's "nearest relative" upon Cornelius's disqualification. The Crawfords read Dev-eroex as directing proceeds to the contingent beneficiary only when the contingent beneficiary is expressly named and is an object of the deceased insured's obvious intent. Cornell argues that he should receive the proceeds because he is the contingent beneficiary under these policies, and distribution to the nearest relative is not triggered until all beneficiaries are disqualified. We agree that the Crawfords should receive the proceeds on Sandra's life, but for reasons different than those offered by the Crawfords.
It is undisputed that Cornelius has forfeited any interest in the proceeds because he willfully brought about Sandra's death. TEX.INS.CODE ANN. § 21.23 (Vernon 1981). Sandra is the "insured" under § 21.23. Affidavits signed by the Crawfords indicate they are Sandra's nearest relatives.
In Deveroex, we reasoned that distributing insurance proceeds to the nearest relative only if all beneficiaries were disqualified effectuated both the obvious intent of the insured and the legislature's objective to deny proceeds to the individual responsible for the insured's death. Upon review, we find our reasoning no longer persuasive.
As Justice Daniel stated in his dissent, our holding was contrary to the plain words of the statute. Deveroex, 529 S.W.2d at 514 (Daniel, J., dissenting). Jus tice Darnel correctly reasoned that § 21.23 contains a specific provision for payment of insurance proceeds when a beneficiary willfully causes the death of the insured. The specific provision directs payment of proceeds to the nearest relative. The fact that the legislature chose to withhold proceeds from the beneficiary/killer does not mean that the legislature intended that the nearest relative would succeed to the proceeds only upon the disqualification of all beneficiaries. Moreover, § 21.23 is:
. as much a part of the insured's contract as if it has been incorporated in the policy. Camden Fire Ins. Ass'n v. Harold E. Clayton & Co., 117 Tex. 414, 6 S.W.2d 1029 (1928). The rights of parties to contract with respect to insurance are limited by state laws which are a part of every contract. Scanlan v. Home Ins. Co., 79 S.W.2d 186 (Tex.Civ.App.— Beaumont 1935, writ ref d); Hamaker v. American States Ins. Co. of Texas, 493 S.W.2d 893 (Tex.Civ.App. — Houston [1st Dist.] 1973, writ ref'd n.r.e.).
Id. at 514 (Daniel, J., dissenting).
Our reasoning that the Deveroex distribution scheme effectuates the obvious intent of the deceased is also incorrect. In Deveroex, we said the insured's "obvious intent" was evidenced by the designation of the contingent beneficiary. When a beneficiary willfully causes the death of the insured, however, we are confronted with a situation where reasonable people would not form an intent regarding the distribution of the proceeds. We may safely presume that neither Sandra, Cornelius, the Crawfords, nor Cornell envisioned the circumstances of Sandra's death when the policies were obtained.
It is clear that the legislature has deliberately chosen to direct the manner in which the benefits are awarded. The practice, as dictated by Deveroex, of beginning our inquiry under the statute, moving into the policy once a beneficiary is disqualified, and then moving back under the statute once we determine no qualified beneficiaries are present, is inconsistent with the explicit language of § 21.23. Instead, by following the language the legislature employed, the inquiry begins, proceeds, and ends under § 21.23. We, therefore, overrule our interpretation of § 21.23 in Deveroex v. Nelson, 529 S.W.2d 510 (Tex.1975), and hold that when any beneficiary under a life insurance policy willfully causes the death of the insured, the policy proceeds are distributed to the nearest relative of the insured.
We recognize that other jurisdictions have reached a different result on somewhat similar statutes and facts. See, e.g., Brooks v. Thompson, 521 S.W.2d 563 (Tenn.1975); Beck v. West Coast Life Ins. Co., 38 Cal. 643, 241 P.2d 544 (1952); Lewis v. Lewis, 281 S.C. 388, 315 S.E.2d 816 (App. 1984). But see Dowdell v. Bell, 477 P.2d 170 (Wyo.1970); cf. Gardner v. Nationwide Life Ins. Co., 22 N.C.App. 404, 206 S.E.2d 818 (1974) (follows statutory direction of awarding proceeds first to alternate beneficiaries not involved in insured's death and then to estate of deceased insured); IDAHO CODE § 15-2-803(j)(l) (1979) (directing distribution to insured's estate only if all beneficiaries disqualified). Moreover, we are aware that Cornell was in no way involved in Sandra's death. Today's opinion is not to be read as implying that Cornell falls under the corruption of blood doctrine. Rather, our holding recognizes the specific direction of § 21.23 that when a beneficiary willfully brings about the death of the insured, the proceeds succeed to the insured's nearest relative.
Accordingly, we reverse the judgment of the court of appeals and render judgment that Phynies and Flora Crawford are entitled to the proceeds from Equitable Life Insurance policy No. N 78 227 787 and Metropolitan Life Insurance Company policy No. 28500-G as the nearest relative of Sandra Crawford Coleman.
Concurring and dissenting opinion by KILGARLIN, J., joined by CAMPBELL, J.
. We reject the Crawford's argument that we should distinguish between a beneficiary falling under a preprinted beneficiary provision in the policy and a beneficiary whose name is written into the policy. In each instance, the insured has selected the individual as a beneficiary even though by different means. There is no difference when an insured reads and agrees to the policy's preprinted beneficiary designations or when the insured writes out the name of the beneficiary.