Aetna Life Insurance Company v. Parker

• Decision Date: 31 March 1955
• Docket Number: Civ. A. No. 12817.
• Citation: 130 F. Supp. 97
• Parties: AETNA LIFE INSURANCE COMPANY, a Connecticut corporation, Plaintiff, v. Viola H. PARKER and Gladys Parker, Defendants.
• Court: U.S. District Court — Western District of Michigan

130 F. Supp. 97

AETNA LIFE INSURANCE COMPANY, a Connecticut corporation, Plaintiff, v. Viola H. PARKER and Gladys Parker, Defendants.

Civ. A. No. 12817.

United States District Court, E. D. Michigan, S. D.

March 31, 1955.

Gerald E. Schroeder, Detroit, Mich., for plaintiff.

Harold E. Bledsoe, Detroit, Mich., for defendant Viola H. Parker.

James Montante, Detroit, Mich., for defendant Gladys Parker.

FREEMAN, District Judge.

This is an interpleader action filed under Title 28, U.S.C.A. § 1335 by Aetna Life Insurance Company to determine the beneficiary or beneficiaries of a certain group life insurance policy issued to the deceased's employer, Chrysler Corporation, a certificate of participation of which was issued to the deceased. Having paid to the Clerk of this court the sum of $3,600, representing the value of the proceeds of the certificate, a decree of interpleader was entered fully discharging plaintiff from all liability in connection therewith. The precise question presented is whether or not the insured effectuated a change of beneficiary by substantial compliance with the provisions of the policy relating to change of beneficiary.

The facts, as shown by the pleadings and as adduced at the trial on the merits, are as follows: Louis Parker, the deceased, was issued a certificate of participation in a group life insurance policy in the amount of $3,600, which certificate was subject to the terms and conditions of a group policy issued to deceased's employer. In his application for group insurance, the insured specifically designated "Viola H. Parker—Relationship Wife" as beneficiary. From the testimony at the trial and from an examination of a photostatic copy of the certificate of insurance, it appears that the insured, under "Name and Relationship of Beneficiary" and underneath the typewritten name "Viola H. Parker—Wife", printed by hand with a green color lead pencil the name Gladys Parker, and below this the word "Sign" followed by the signature of the insured. It also appears from the testimony that the insured, some time in September, 1951, because of certain marital difficulties, took up residence away from home; that his wife was aware that he had executed the purported change of beneficiary; that he had executed the purported change before he left home, and, hence, about a year before his death. Therefore, the proof clearly does not sustain the allegation of defendant Gladys Parker, insured's sister, that because of the fatal accident the insured was prevented from delivering the insurance certificate to either his employer or plaintiff.

To effectively change the beneficiary of the certificate in question, it was provided by the group policy that:

"An employee, whether or not employment shall have terminated, may designate a beneficiary, or change his designation of beneficiary, from time to time by written request filed at the employment office of the Employer or at the Home Office of the Insurance Company. Such designation or change shall take effect as of the date of the execution of such request, whether or not the employee be living at the time of such filing, but without prejudice to the Insurance Company on account of payments made by it before receipt of such request at its Home Office."

At the outset, the question arises as to whether the insurance company by commencing an interpleader action and paying the proceeds of the policy into court is deemed to have waived compliance with the provisions of the policy respecting change of beneficiary. While there is authority to this effect, Prudential Ins. Co. of America v. Glasgow, 2 Cir., 208 F.2d 908; Phoenix Mutual Life Ins. Co. v. Cummings, D.C., 67 F.Supp. 159; Sbisa v. Lazar, 5 Cir., 78 F.2d 77; United Services Life Ins. Co. v. Farr, D.C., 60 F.Supp. 829; 19 A.L.R.2d 101, this Court believes the better reasoned view, and that most consistent with the holdings in Michigan, is the view enunciated by Judge Starr in Equitable Life Assurance Society v. McClelland, D.C., 85 F.Supp. 688, 694, wherein the Court stated:

"The rights of the beneficiaries named in a life-insurance policy should certainly not be made to depend upon the discretionary election by the insurance company as to whether or not it will begin an interpleader suit to determine who is entitled to the proceeds of the policy. The beginning of a suit to determine the rights of rival claimants and the payment of the proceeds of a policy into court, or the giving of a bond to the clerk of the court, will not change the legal rights of the claimants. Their rights must be determined as of the time of the insured's death and cannot be subsequently changed by the insurer. By beginning suit the insurer does not concede the claim of any particular beneficiary but merely asks the court to determine to whom it should pay the proceeds of the policy. The better view is that the rights of named beneficiaries become vested on the death of the insured and cannot thereafter be affected by any subsequent act of the insurer."

This view seems clearly in accord with that expressed by the Supreme Court of Michigan in Dogariu v. Dogariu, 306 Mich. 392, at page 406, 11 N.W.2d 1. See also Prudential Ins. Co. of America v. Irvine, 338 Mich. 18, 61 N.W.2d 14; Aetna Life Ins. Co. v. Mallory, 291 Mich. 701, 289 N.W. 302; Johnson v. Johnson, 5 Cir., 139 F.2d 930, 151 A.L.R. 268; Phoenix Mutual Life Ins. Co. of Hartford, Conn. v. Reich, D.C., 75 F.Supp. 886, 894, 19 A.L.R.2d 109.

Therefore, the question to be determined is whether the conduct of the insured, as above indicated, amounted to a substantial compliance with the terms of the policy.

This Court is of the opinion that the insured, when he added the name of his sister to the face of the certificate and signed his name immediately below his sister's, intended to make his sister a co-beneficiary to share equally in the proceeds with his wife. While this writing on the policy is not without some ambiguity, and while the Court is mindful of the contention by the sister that the handwritten portions of the certificate should take precedence over the typewritten portions thereof, the Court believes that it would have been a simple matter for the insured to obliterate the name of his wife from the certificate had he not intended her to share with his sister in the proceeds. This conclusion seems inescapable in view of the testimony that the insured made this endorsement on the policy prior to his so-called separation from his wife. But this finding does not settle the question, for it has repeatedly been held that the unexecuted intention by the insured to change a beneficiary will not be sufficient to effect such a change. Gignac v. Columbia Nat. Life Ins. Co., 321 Mich. 201, 32 N. W.2d...