Edwards v. Farm Bureau Mutual Insurance

Tom Glaze, Justice. This case involves the construction of the will of J. P. Thornton, who died on September 2, 1961. Thornton was survived by his widow, Ava West Thornton (now Collins), a daughter from a prior marriage, Annie Laurie Thornton Edwards, and two grandchildren, James Edwards and Kathy Edwards Fossick. Since Thornton’s death, the relationship between Ava and Thornton’s daughter and grandchildren has been strained. Thornton’s will devised Ava an undivided one-half interest for her life in his plantation situated in Desha County. In following paragraphs of the will, he devised Ava and Annie each a one-third fee simple absolute interest and James and Kathy together a one-third fee simple absolute interest in the plantation, all such fee simple interests being subject to Ava’s undivided one-half life interest. Thornton’s will language, in making these devises, has become an issue because Ava, who has had exclusive possession of the only dwelling on the plantation, claims all insurance proceeds ($75,000) covering the dwelling after it was destroyed by fire. Ava, undisputably, paid the premiums for this insurance coverage and she was named as the insured. Annie, James and Kathy claim entitlement to two-thirds of the proceeds, stating Ava had a fiduciary relationship with them as co-tenants which required her to protect and secure their common interest. As a result of this dispute, Farm Bureau Mutual Insurance filed an interpleader action and deposited the insurance proceeds into the court registry. After a bench trial, the trial court held that all proceeds should be paid Ava. Annie, James and Kathy (hereafter appellants) appeal, arguing that the trial court erroneously found they were not co-tenants or tenants in common with Ava and that it incorrectly relied on the case of Jackson v. Jackson, 211 Ark. 547, 201 S.W.2d 218 (1947). In the Jackson case, the testator devised a life estate in the mansion house to his widow, who by other terms in the will, was free from payment of the taxes and for improvements in maintaining the home place. The widow procured and paid premiums for fire insurance on the house, which was subsequently extensively damaged by fire. The trial court held the insurance proceeds were payable to the trustee named in the testator’s will to be held for the use and benefit of future interest owners of the testator’s estate. This court reversed, quoting 33 Am. Jur. Life Estates, Remainders, Etc. § 332, p. 838, as follows: It is clearly the general rule that where a legal life tenant insures the property in his own name and for his own benefit and pays the premiums from his own funds, he is, at least in the absence of a fiduciary relationship between him and the remainderman existing apart from the nature and incidents of the tenancy itself, or of an agreement between him and the remainderman as to which of them shall procure and maintain insurance entitled to the proceeds of the insurance upon a loss; and the fact that the insurance was for the whole value of the fee is not generally regarded as affecting the right of the life tenant to the whole amount of the proceeds. The Jackson court further quoted the following from 31 C.J.S. Estates § 46, p. 58: It has been stated, as a general rule, that the life tenant is not bound to keep the premises insured for the benefit of the remainderman or reversioner, unless there is an agreement that he shall do so, or a provision to that effect in the instrument creating the estate; but that either may insure for his own benefit, the tenant for life and the remainderman-paying insurance for their respective interests. Ordinarily this is what is done, and it has been held that neither the life tenant nor the remainderman will be benefited by the other’s policy. The court in Jackson concluded the testator’s widow never agreed to insure the premises for the benefit of the estate or the owners of future interests in the property, but instead procured the insurance in her own name and for her own benefit. Because the widow had no obligation under the will to insure for the benefit of the remainderman, this court held she was entitled to the insurance proceeds. Appellants argue Jackson is inapplicable because there the will specifically left the widow a life estate in the home place and here Thornton’s will failed to mention the dwelling and instead devised Ava an undivided one-half interest for life in the entire plantation. Appellants argue the present situation is more like the one in Krickerberg v. Hoff, 201 Ark. 63, 143 S.W.2d 560 (1940). Krickerberg involved a partition suit. A will was not in issue. However, the right to partition depended upon whether the parties in Krickerberg were co-tenants or tenants in common and thereby entitled to such remedy. In Krickerberg, through intestate distribution, the surviving husband, Mr. Krickerberg, received a life estate in one-half of the intestate’s property and the remainder vested in the intestate’s sister, Mrs. Hoff. At trial, Krickerberg and Hoff agreed Krickerberg had a life estate in an undivided one-half interest in the property and Hoff held fee simple title subject to Krickerberg’s interest. From these findings, this court in Krickerberg concluded Hoff possessed an undivided one-half interest along with Krickerberg in the entire property and Hoff held the remainder in fee. Apparently, the court determined that because Krickerberg had only an undivided one-half interest in the entire property, the other undivided one-half interest was in Hoff. Reaching this conclusion, the court held Krickerberg and Hoff were co-tenants or tenants in common and therefore held interests that could be partitioned. In comparing the facts here with those in Krickerberg, appellants contend the language in Thornton’s will devised a split or one-half life estate in Ava, leaving the remaining one-half life interest to the remaindermen, i.e., Ava and the appellants. That being so, appellants claim a concomitant life interest and right to possession, which satisfies the definition of tenants in common. Appellants asserts that, because they were co-tenants or tenants in common with Ava, Ava had a fiduciary relationship with them and owed them a legal duty to protect and secure their common interest. Coffey v. Coffey, 274 Ark. 335, 625 S.W.2d 444 (1981); Brown v. Brown, 263 Ark. 189, 563 S.W.2d 444 (1978). In reading the Jackson and Krickerberg cases, we conclude that both are distinguishable from the facts here. Nonetheless, the Krickerberg case does seem to underscore the ambiguous estate of title where only an undivided one-half life interest is devised or otherwise vested in an entire property, and subject to that one-half interest, the remaining fee simple is vested in others (which in the present case includes Ava as well). The intention of Thornton, the testator, is to be gathered from the four corners of his will, considering the language used and giving meaning to all of its provisions when possible to do so. See In Re Estate of Conover, 304 Ark. 268, 801 S.W.2d 299 (1990). And, oral testimony is admissible only for the purpose of showing the meaning of the words used in the will when they are ambiguous,' and not to show what the testator intended, as distinguished from his expressed words. Id. In reading Thornton’s will in light of Ava’s and the appellants’ arguments and the foregoing rules of construction in mind, we are left with two salient points, one, Thornton made no mention of the dwelling in his will and instead devised Ava an undivided one-half life interest in the entire plantation, and, two, he omitted any reference in his will to the other one-half life interest in his estate or who received it. However, Ava testified that, since her husband’s death, she had leased the plantation as farm land. In doing so, she kept one-half of the rents received under the leases and paid one-half of them to the appellants, thus indicating both parties have had a cognizable present possessory interest in the property.1 We are compelled to conclude that both Ava and appellants have present possessory interest rights in the entire plantation, and that being so, they have, as co-tenants, a fiduciary relationship with one another. Therefore, we reverse and remand this cause with directions that the insurance proceeds be paid to the parties according to their respective interests. Holt, C.J., and Brown, J., dissent. Footnotes [1] We note that the doctrine of merger or its application, if any, was never argued.