Court Opinion

ID: 9725530
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:51:38.730646+00
Date Added: 2024-06-11T18:25:16.247854
License: Public Domain

Fitzgerald, J.
I agree with Justice Moody’s opinion that the obligation undertaken by Steven Kasper is enforceable. The provision of the judgment of divorce which requires that Steven Kasper *258keep his minor son Jason as beneficiary of a designated life insurance policy until his son reaches the age of majority reflects a valid agreement of the parties. I would affirm the decision of the Court of Appeals.
Parties to a divorce may agree upon a property settlement and, in the absence of fraud, duress or mutual mistake, be bound thereby. West v West, 241 Mich 679; 217 NW 924 (1928); Kline v Kline, 92 Mich App 62; 284 NW2d 488 (1979). Divorce does not eliminate the continuing duty of parents to support their children during their minority. This obligation is addressed by various statutory provisions. See MCL 552.16; MSA 25.96 (judgment awarding custody); MCL 552.17a; MSA 25.97(1) (that the court may order either parent to pay such allowance as is deemed proper to support the minor children); MCL 552.27; MSA 25.105 (support and education of minor children; award as lien); MCL 552.251 et seq.; MSA 25.171 et seq. (Friend of the Court). While acknowledging that the circuit court cannot order a party to a divorce proceeding to convey property to a third party, I believe that to award the insurance proceeds in the instant case to Jason Kasper’s grandfather violates the intent of a validly drawn and agreed-upon divorce judgment.
The language of the divorce judgment recognizes the obligation to provide for the minor child until he reaches maturity: 1) support and maintenance payments to continue until age 18 or graduation from high school, whichever is later, 2) the requirements that medical insurance be maintained for Jason, and 3) that Steven Kasper keep Jason as beneficiary of the designated life insurance policy until he reaches the age of 18 years.
Several aspects of this arrangement must be *259noted. A separate section of the judgment dealing with "insurance” granted the parties to the divorce the right to change beneficiaries and deal with or dispose of life insurance policies, while specifically referring to the Metropolitan Life policy on which Jason was to be kept as beneficiary.
Jason Kasper was very young when his parents were divorced. He was not made an irrevocable beneficiary of the Metropolitan Life policy. Rather, the language clearly states that he be kept as beneficiary only until reaching age 18. This termination date implies that the primary consideration was the parental desire to provide for Jason’s maintenance and support in the event of his father’s death. The inclusion of a termination date also severely weakens appellant’s argument that the provision constitutes an impermissible award of property. See Carroll, Award of Life Insurance Proceeds to a Child in Divorce Actions, 54 Mich State Bar J 707 (1975).
I agree with Justice Moody’s conclusions that Norma Jean Kasper may have bargained away other property interests in exchange for Steven Kasper’s agreement to maintain Jason as beneficiary, and that to allow a collateral attack upon a divorce judgment after all benefits obtained under it are fully accepted would be improper.
To deny Jason Kasper the insurance proceeds because the record reveals no proof of an independent agreement between Steven and Norma Jean Kasper is to elevate form over substance and to impermissibly disregard a validly created and enforceable judgment. I agree with the Court of Appeals decision in Krueger v Krueger, 88 Mich App 722; 278 NW2d 514 (1979).
Kavanagh, J.
In this case we are asked to *260determine the legal significance of a property settlement provision in a divorce judgment which requires one party to keep a child of the parties as beneficiary of a life insurance policy.
On July 27, 1971, Steven Kasper designated his father Theodore Kasper, Jr., beneficiary of the insurance he had on his life pursuant to the group policy Metropolitan Life Insurance Company had issued to Steven’s employer, General Motors Corporation.
Steven and Norma Jean Kasper were married on September 27, 1973 and their one son, Jason Craig Kasper, was born April 10, 1974. Steven changed the beneficiary of his life insurance policy from his father to his wife on October 8, 1973. The couple were divorced November 26, 1976 and the divorce judgment contained the following provisions:
"Property Settlement
"It is further ordered and adjudged between the parties that the defendant shall keep [1] the minor child of the parties as the beneficiary on his presently existing insurance policy with Metropolitan Life until the minor child reaches the age of eighteen (18) years.
"Insurance
"It is further ordered and adjudged between the parties that neither shall hereafter have any right, title or interest in or to the insurance upon the life of the other, except as herein previously indicated: and that in any and all other insurance policies, each of them shall be entitled to change the beneficiary to said insurance upon their respective lives, or other [sic] to deal with or *261dispose of the same without interference of the other of them.”
Notwithstanding the above property settlement provision of the judgment, Steven changed the beneficiary of his life insurance policy from Norma Jean Kasper back to his father, Theodore Kasper, Jr., on March 16, 1977. Steven died July 10, 1977.
Theodore Kasper, Jr., as beneficiary, filed a claim with Metropolitan Life for the proceeds of the life insurance policy. Metropolitan Life filed a complaint of interpleader admitting liability on the policy and paid the proceeds to the court. The interpleader complaint admitted knowledge of the divorce judgment and named as defendants Theodore Kasper, Jr., and Norma Jean Kasper as guardian of Jason Craig Kasper. The trial court granted a summary judgment in favor of Theodore Kasper, Jr. The Court of Appeals granted Norma Jean Kasper’s motion for peremptory reversal, relying on Krueger v Krueger, 88 Mich App 722; 278 NW2d 514 (1979).
Theodore Kasper, Jr., appealed to this Court, asserting that a property settlement provision in a divorce judgment requiring one spouse to maintain a child as beneficiary of a life insurance policy is void as exceeding the statutorily limited jurisdiction of a court to distribute marital property between the divorcing parties only. Norma Jean Kasper argues that while a court has no authority on its own to distribute marital property to anyone but the divorcing parties, they may independently agree to do so in a property settlement agreement and the court may incorporate such a property settlement agreement into its judgment. Norma Jean Kasper further argues that by approving the proposed judgment containing the above-quoted property settlement provision, Steven Craig Kas*262per in effect executed a property settlement agreement with her which the court incorporated into its decree. We disagree.
Divorce matters have historically been heard in equity. Because divorce is not a natural or common-law right, however, a court presiding over divorce matters does not wield general equity powers but is limited to those powers specifically granted by statute. Baugh v Baugh, 37 Mich 59; 26 Am Rep 495 (1877); Perkins v Perkins, 16 Mich 162 (1867); Peltier v Peltier, Harr Ch 19 (1836); 24 Am Jur 2d, Divorce & Separation, § 5, p 180. By statute a court is restricted in distributing marital property to the parties only. MCL 552.19; MSA 25.99. The only parties to a divorce suit are the husband and wife — children are not parties. Baugh v Baugh. Thus, a court has no authority to distribute marital property to children or other non-parties. Swiney v Swiney, 107 Mich 459; 65 NW 287 (1895). However, in distributing marital property a court cannot ignore or destroy valid encumbrances thereon which favor non-parties nor can it distribute property which has already been validly conveyed by the parties or one of them prior to the divorce judgment. Title & Trust Co v Jaster, 241 Mich 416; 217 NW 42 (1928).
Agreements between married persons to distribute property pending a divorce or legal separation are valid as long as they do not offend public policy by encouraging a breakdown of the marriage relationship and are free from fraud and coercion. Owen v Yale, 75 Mich 256; 42 NW 817 (1889); Randall v Randall, 37 Mich 563 (1877). Property settlement agreements may be incorporated into a divorce judgment. Such incorporation, however, renders that portion of the divorce judgment distributing property pursuant to the agree*263ment a consent judgment. Owen v Yale. It is only in this manner that a divorce judgment may distribute marital property to a non-party.
When marital property is distributed pursuant to a consent judgment in a manner which the court would not have the power to order on its own motion, neither party can be heard to object. As with any decree distributing property, contempt power may not be utilized to enforce compliance. Shafer v Shafer, 257 Mich 372; 241 NW 144 (1932); Spence v Spence, 290 Mich 98; 287 NW 393 (1939). Actions for violations of such property settlement provisions of a divorce judgment must be at law on the contract. See Bartholomae v Stellwagen, 277 Mich 618; 270 NW 159 (1936), and Stellwagen v Stellwagen, 277 Mich 412; 269 NW 216 (1936).
The legitimacy of divorcing parties executing a property settlement agreement and having the court incorporate the agreement into its divorce judgment has been recognized by a century of case law in this state. Several decisions of this Court, however, have held invalid property settlement provisions of a divorce judgment purporting to distribute property to non-parties pursuant to such agreements. Flynn v Flynn, 367 Mich 625; 116 NW2d 907 (1962); Rex v Rex, 331 Mich 399; 49 NW2d 348 (1951); Maslen v Anderson, 163 Mich 477; 128 NW 723 (1910). A close reading of these decisions reveals the divining principle that a distribution of marital property to non-parties cannot depend on the divorce judgment, but must be based on an independent agreement between the parties which may be incorporated into the divorce judgment. The interest which inures to the benefit of the non-party is not created by the divorce judgment, as that would exceed the court’s statuto*264rily limited authority, but rather by the agreement between the parties. Thus, proof of such an agreement must be made aliunde the divorce judgment.
In Maslen v Anderson, Andrew Anderson orally consented to a property settlement agreement with his wife during the pendency of divorce proceedings between them. The wife was awarded a divorce pro confesso and the divorce decree contained the orally agreed upon property settlement provisions which included, inter alia, a distribution to their children upon reaching majority and a distribution for the maintenance of the wife’s mother — both exceeding the court’s statutorily limited distribution power. In an action by the executor of Andrew Anderson’s estate to have the above-mentioned duties extinguished this Court held those property settlement provisions of the divorce decree void. The Court reasoned:
"So we are constrained to hold that, notwithstanding the consent of Anderson, those portions of the decree above pointed out were void and of no effect for want of jurisdiction in the court to make the same. We cannot agree with counsel for appellees that those provisions of the decree alluded to can be sustained as 'family settlements.’ There is nothing to show that the said provisions were intended to operate as 'family settlements,’ and that fact is negatived by the will of Andrew Anderson, which appears in this record, showing that he made subsequent provisions for these children. Neither can a family settlement, such as is here claimed, be made in a divorce proceeding.” 163 Mich 477, 484 (emphasis added).
In Newton v Security National Bank of Battle Creek, 324 Mich 344; 37 NW2d 130 (1949), a husband and wife entered into a property settlement agreement, during the pendency of a divorce *265suit, providing that one-third of the property be distributed to the wife, one-third to the husband and one-third in trust for their child who was to take the principal at age 30 — the latter distribution being in excess of the court’s statutory power. The written property settlement agreement was incorporated into the divorce decree entered in 1920 and accordingly the trust was created and operated for 28 years, when William F. Newton sought to prevent his son from receiving the trust principal by alleging that the trust was created pursuant to an invalid property settlement provision of a divorce decree, citing Maslen v Anderson. In upholding the property settlement of the divorce decree the Court reasoned as follows:
"Plaintiff claims that the above case [Maslen] is on all fours with the case at bar and controls here. However, the situation in that case does not support the claim. The defendant did not enter an appearance, there was no property settlement or agreement entered into by the parties that was the basis of the decree, and the provisions of the decree had not been completely executed when the action was brought. In the case at bar the defendant William F. Newton appeared in the divorce case and, while he filed no answer, he was represented by a competent attorney throughout the divorce proceedings, including the property settlement agreement. The parties settled their property rights by said agreement which was approved by the court. The provisions setting up a trust for the minor child were included in the property agreement and, after the signing of the decree, the property was turned over to the trustee in accordance with the terms of the agreement and decree. Said trust was set up and the terms of the agreement as well, as the decree entered in pursuance thereof were fully executed before this suit was begun, with the single exception that the trustee had not turned over to him the minor’s property when he became 30 years of age. The purpose of plaintiffs present suit is to prevent the occurrence of that final *266event, inasmuch as William Hubbard Newton will become 30 years of age on August 10, 1949.
"In the Maslen Case, supra, p 484, it is stated:
" 'There is nothing to show that the said provisions (in the decree) were intended to operate as "family settlements.” ’
"Therein it differs from an agreement as entered into in the case at bar. To the extent that statements in the Maslen Case may be considered contrary to the conclusions herein expressed, we now decline to follow the same. Plaintiff seems to proceed upon the theory that the trust in this case was the result of the decree of divorce, and that as such it was in excess of the court’s statutory powers. The trust was in reality the result of the property settlement between the parties, which they had a right to make, and which the court had a right to confirm.
"There might be more merit in plaintiffs suit if it depended solely on the decree. He makes no attempt to excuse his voluntary agreement for the settlement of all his property matters, in the agreement signed by him. He was of full age, and makes no assertion of mental incompetence or duress. He fails to set up any adequate claim of fraud or mistake. The decree as to property matters which he now seeks to repudiate is a consent decree.” 324 Mich 344, 352-353, 357 (emphasis added).
In Maslen v Anderson there was no proof of a property settlement agreement independent of the divorce decree, nor were the terms of the asserted agreement ever carried out. Thus, there was no proof that the interest of the non-party was created aliunde the divorce decree and the Court correctly held: "Neither can a family settlement, such as is here claimed, be made in a divorce proceeding. ” 163 Mich 477, 484 (emphasis added).
In Newton v Security National Bank of Battle Creek, the Court recognized that "[t]he trust was *267in reality the result of the property settlement between the parties”. 324 Mich 344, 353. Thus, in Newton the property came before the court already encumbered by the agreement between the parties to create a trust in favor of a non-party. While the court could not have ordered that same distribution on its own authority it was likewise powerless to destroy the interest of the non-party created by the previously executed agreement between the parties. See Title & Trust Co v Jaster, 241 Mich 416; 217 NW 42 (1928). Indeed, the Court candidly admitted: "There might be more merit in plaintiffs suit if it depended solely on the decree.” 324 Mich 344, 357.
In Rex v Rex, 331 Mich 399; 49 NW2d 348 (1951), the parties were divorced in 1933 and remarried in 1935 after executing an antenuptial agreement. In 1947 the wife was granted a divorce from bed and board and the divorce decree included a property settlement provision requiring the husband to place corporate stock in trust for their children. The decree was to operate as the trust instrument if the parties failed to execute one. We held that portion of the divorce decree ordering the creation of the trust void as exceeding the statutorily limited jurisdiction of the court and lacking any support independent thereof.
"Cross-plaintiff [wife] cannot go behind the instant decree and rely on the antenuptial agreement for support of the trust, there being no such support in the agreement itself. Conceding that the antenuptial agreement be considered as a property settlement, it does not even remotely provide that the stock in the corporations owned by the plaintiff be placed in a trust fund beyond his control.” 331 Mich 399, 410.
Flynn v Flynn, 367 Mich 625; 116 NW2d 907 *268(1962), provides perhaps the most vivid example of the principle involved here. In Flynn the parties were divorced in 1951 and the divorce decree ordered that real property owned by them as tenants by the entireties be distributed to them as life tenants with remainders over to their children. In 1961 this provision of the divorce decree was declared invalid on the authority of Maslen v Anderson. In reviewing the decision of the trial court we recognized that the record of the 1951 divorce proceedings contained an extensive colloquy between counsel for both parties wherein they stipulated to a distribution of the real property which the court ultimately ordered in the decree. We held that provision of the divorce decree invalid. While there was no doubt as to the parties’ intent, the Court recognized the crucial question to be "whether the judge had the authority to decree a life estate to the parties with remainders over to their children.” 367 Mich 625, 630. When the divorce court first considered the property it was unencumbered by any interest in favor of the children. The agreement to grant the remainder interests to the children was made on the record during divorce proceedings with the court participating. The court lacked statutory authority to distribute property to the children and the parties could not give the court authority to do so by stipulation. See Kirkwood v Hoxie, 95 Mich 62; 54 NW 720 (1893). Flynn illustrates that the interest of the non-party must be created before the property is considered by the divorce court.
This Court is not unmindful of the peculiarity of property distribution between divorcing parties. Indeed, many property distribution agreements are literally made on the courthouse steps. Such an arrangement is legitimate as long as the distribution is limited to the parties only because the trial court has the authority to review and ap*269prove property distribution to parties. Today we are merely recognizing that when property is to be distributed to a non-party it must be done pursuant to an agreement independent of the divorce proceedings. When judicial proceedings are involved they are limited to the statutory grant of authority.
In the instant case the record reveals no independent agreement between Steven and Norma Kasper requiring Steven to maintain their son as beneficiary of his life insurance policy. The divorce judgment contains such a requirement in its property settlement provisions but as set forth herein the court was without power to order such a distribution and proof of agreement to do so must be made aliunde the divorce judgment.
In Baugh v Baugh, 37 Mich 59, 62 (1877), Justice Campbell noted the following, which is equally cogent today:
"It is expected of all divorce courts that they will be vigilant in examining the circumstances of all cases before them, and not allow any decree without a full scrutiny. The means furnished for this purpose are adequate for most cases. In the best circumstances justice will sometimes miscarry, but this is not peculiar to divorce cases, and it will not do to resort to unauthorized measures to redress legal misfortunes or wrongs. It would not be desirable, in order to get rid of some unjust judgments, to destroy the force of judgments generally, and allow them to be attacked by third parties where the legal rules which have been established to determine their effect have not permitted it.”
The order of the Court of Appeals is reversed and the judgment of the trial court reinstated. We hereby expressly disapprove of Krueger v Krueger, 88 Mich App 722; 278 NW2d 514 (1979).
Levin, J., concurred with Kavanagh, J.

 It is worthy of note that the word "keep” is inappropriate since Steven Kasper’s minor son was never a beneficiary of the life insurance policy in question.