Untitled Texas Attorney General Opinion ( 1975 )

The Honorable Leonard Prewitt Opinion No, H- 721
F,xecutive secretary, Teacher
Retirement System of Texas Re: Responsibilities of the
1001 Trinity Street Teacher Retirement
Austin, Texas 78701 System when a member
is murdered by his bene-
Dear Mr. Prewitt: ficiary.
You have requested our opinion regarding the responsibilities of the
Teacher Retirement System when one of its members or retired members
is murdered or alleged to have been murdered by his designated beneficiary.
Attorney General Opinion O.-Z590 (1940) resolved this question on the
basis of a 1918 decision of the Beaumont Court of Civil Appeals, Murchison
w 203 S.W. 423 (Tex. Civ.App. --Beaumont 1918, no writ),
which declared that it is against public policy to permit a beneficiary to
recover the proceeds of a life insurance policy if he feloniously kills the
insured and that, in such cases, the proceeds are payable to the estate
of the insured. Nevertheless, the court held that the bene’ficiary-Murderer,
as the sole heir of decedent’s estate, was entitled to the proceeds.
Following the court’s decision in Murchison, the Legislature enacted
section 21.23 of the Insurance Code [formerly article 5047, V. T. C. S. ] ,
which provides that the “interest of a beneficiary [is] . . . forfeited
when the beneficiary is the principal or accomplice in willfully bringing
about the death of the insured.” In such cases, “the nearest relative
of the insured shall receive said insurance.” Since survivors’ benefits
under the Teacher Retirement System are not governed by the Insurance
Code, however, it is necessary to look to the common law to determine the
applicable principles.
Since Attorney General Opinion O-2590 ( 1940 ), the ,Texas courts, as
a means of carrying out the public policy which prevents a person from
profiting by his own wrong. have imposed a constructive trust upon
property passing to heirs who murder their ancestors. Under this doctrine,
legal title to decedent’s property passes to the murderer, but the law imposes
p. 3087
., .
The Honorable Leonard Prewitt, page 2 (~-721)
a constructive trust thereon for the benefit of other heirs. Parks V. Dumas,
321 S.W.2d 653 (Tex. Civ. App. --Ft. Worth 1959, no writ); Pritchett v.
Henry. 287 S.W.2d 546 (Tex. Civ. App. --Beaumont 1955, writ dism’d. ).
In Pritchett, the court explained its rationale thus:
By imposing a constructive trust upon the
murderer, the court is not making an excep-
tion to the provisions of the statutes, but is
merely compelling a murderer to surrender
the profits of his crime and thus preventing
his unjust enrichment. 287 S.W.2d at 549.
Quoting the Supreme Court’s decision in Pope V. Garrett, 211 S.W.2d 559
(Tex.Sup. 1948). the court in Parks v. Dumas, sup, held that the
constructive trust doctrine is a creature of equity. Its purpose is to
prevent a situation in which “the statutes of descent and distribution may
. .~. be used as an instrument for perpetuating or protecting a fraud. ”
321 S.W.2d at 655.
Under the law of most jurisdictions, the disqualification of a bene-
ficiary bars the claim of anyone who succeeds to his rights, whether it be
his assignee, his heirs, or the administrator of his estate.4 Couch on
Insurance 2d. § 27:161. at 709-10. Thus, a beneficiary cannot confer
upon his heirs or assigns the proceeds of his victims estate. In addition,
section 3.07 of the Education Code provides that “any . . . right . . .
accruing to any person under the provisions of this chapter . . . shall
be unassignable except as provided. . . .I’
From the analogy of Pritchett and Parks, we may conclude that, in the
event a member of the System is murdered by,his designated beneficiary,
a constructive trust will be imposed upon such beneficiary, in favor of
those persons in whom benefits vest, according to statute, when the desig-
nation of the primary beneficiary fails. Section 3.33 of the Education Code
provides, in pertinent part:
(b) In the event a member fails to designate
a beneficiary, or the designated beneficiary
predeceases the member and there is no
designation effective at the date of death, the
death benefits and election right to survivor
benefits shall vest (in the, order listed) with
p. 3088
The Honorable Leonard Prewitt, page 3 (H-721)
(1) the surviving widow or surviving
dependent widower of the deceased; or
(2) the children of the deceased in
equal portions;. or
(3) the dependent parent or parents of
the deceased in equal portions.
(c) If none of the persons named in Subsection (b)
(l), (Z), and (3) of this section survive; then, to
the member’s estate, or to his heirs, in complete
discharge of all claims for death and survivor bene-
fits under this chapter, there shall be paid
(1) the return of the accumulated con-
tributions of the member; or
(2) a $500 lump sum if death occurs
after retirement.
Thus, it is our opinion that, where a constructive trust is imposed, those
persons listed in section 3.33 shall be entitled, in the order listed, to the
available benefits, provided that such beneficiary is not himself the mur-
derer of the member. We note that, by the terms of section 3.34(t) of the
Education Code, if the beneficiary is
other than a surviving widow, dependent widower,
child, grandchild, brother, sister, or dependent
parent of the deceased, or other persons ‘financially
dependent on the deceased, the death benefits pay-
able to the beneficiary under the provisions of this
chapter shall be limited to the accumulated contri-
butions in the member’s member savings account.
You also ask whether the Teacher Retirement.System may rely upon a
waiver executed by the alternative beneficiaries created by section 3. 33(b)
in favor of the designated beneficiary-murderer, or may enter into a
settlement agreement which results in an obligation on the part of the
System to pay benefits to the murderer, In our opinion, neither a waiver
p. 3089
.
The Honorable Leonard Prewitt, page 4 (H-721)
nor a settlement agreement to such effect would be valid. AS the Supreme
Court declared in Poue v. Garrett, supra. the doctrine of constructive
trust is to be “imposed irrespective of and even contrary to the intention
of the parties. ” 211 S.W.2d at 561. If the public policy which prevents
a person from profiting by his own wrong is strong enough to require, in
effect, a judicially-created exception to the descent and distribution
statutes, it certainly may not be thwarted by any agreement between the
murderer, the alternative beneficiaries, and the Teacher Retirement
System.
As to the procedure which the System should follow when it has informa-
tion that the member was murdered by his designated beneficiary, we
believe that the System, in order to protect itself from liability, should
await a judicial order imposing a constructive trust. It,is of COU~RC
possible that the designated beneficiary will be determined not to have
caused the death of the member. The standard promulgated by article 21.23
of the Insurance Code, “w’illfully bringing about the death of the insured, ”
has been construed by the Supreme Court to require something more than
intent to cause death. But although the factor of illegality must also be present,
“willfully” should not be construed to mean “maliciously. ” Green v.
Franklin Life Insurance Co., 221 S.W.2d 857, 859 (Tex. Sup. 1959). This
standard may reasonably be applied to situations involving the Teacher
Retirement System.
In most cases, either the designated beneficiary or the alternative bene-
ficiaries uader section 3. 33 will probably bring an action against the
System to require payment of benefits. If none of these parties do so within
a reasonable time, the System should, in our opinion, file an interpleader
action in the district court. Interpleader has been frequently upheld as
a proper action in such cases. See Murray V. American National Insurance
co.. 300 S. W. Zd 187 (Tex..Civ. AT. --Ft. Worth 1957, writ ref’d. ); Murray
v. Bankers Life Co., 299 S.W.2d 730 (Tex. Civ. App. --Ft. Worth 1957,
writ ref’d); Cooley v. Coolev, 503 S.W.2d 604 (Tex. Civ. App. --Eastland
1973, no writ). As the court held in McCormick v. Southwestern Life
Insurance Co., 35 S. W. Zd 502,503 (Tex. Civ. App. --Waco 1931, no writ),
the purpose of interpleader is to protect an innocent stakeholder. It is
proper SO long as the stakeholder is in some real doubt or hazard in passing
and acting upon conflicting claims. Until a court has imposed a constructive
trust in favor of the alternative beneficiaries, the Teacher Retirement System
p. 3090
. . -
.
.
The Honorable Leonard’Prewitt, page 5 (H-721)
may be said to be “in some real doubt or hazard” as to whom it
should pay the available benefits. If and when a constructive trust
is recognized, the System may pay the proceeds to the alternative
beneficiaries in accordance with the terms of section 3.33 of the
Education Code.
SUMMARY
When a member of the Teacher Retirement
System is judicially determined to have been
murdered by his designated beneficiary, the courts
will impose a constructive trust upon such bene-
ficiary in favor of those persons in whom benefits
vest under section 3.33 of the Education Code when
the designated beneficiary is disqualified. The
Teacher Retirement System should not pay any
benefits in such situations, however, until a
constructive trust has been imposed by judicial
order. If no interested party files an action to
require payment within a reasonable time, the System
should bring an interpleader action for the purpose
of determining to whom it should pay the proceeds.
Very truly yours,
JOHN L. HILL
Attorney General of Texas
APPROVED:
7i.Lk.Tb
DAVID M. KENDALL, First Assistant
ROBERT HEATH, Chairman
Opinion Committee
p. 3091