Bradley v. United States

• Decision Date: 05 July 1944
• Docket Number: 2887.,No. 2886,2886
• Citation: 143 F.2d 573
• Parties: BRADLEY v. UNITED STATES et al. UNITED STATES v. BRADLEY et al.
• Court: U.S. Court of Appeals — Tenth Circuit

143 F.2d 573 (1944)

BRADLEY v. UNITED STATES et al. UNITED STATES v. BRADLEY et al.

Nos. 2886, 2887.

Circuit Court of Appeals, Tenth Circuit.

May 30, 1944.

Rehearing Denied July 5, 1944.

F. L. Welch, of Antlers, Okl., for appellant Lena M. Bradley.

Andrew Dilworth, of San Antonio, Tex. (R. G. Harris, of San Antonio, Tex., on the brief), for Annie Mae Bradley.

Keith L. Seegmiller, of Washington, D. C. (Cleon A. Summers, U. S. Atty., of Muskogee, Okl., on the brief), for the United States.

Before PHILLIPS, BRATTON, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

On August 21, 1941, Eugene Morris Bradley was killed while serving as a flying officer in the United States Army. His mother, Lena M. Bradley, and his widow, Annie Mae Bradley, filed separate claims with the Veterans' Administration, each claiming to be the sole beneficiary under a $10,000 life insurance policy issued to him under the National Service Life Insurance Act of 1940, 38 U.S.C.A. § 801 et seq. When the policy was originally issued on November 1, 1940, his mother was designated as the beneficiary, and the principal question presented by this appeal is whether the insured thereafter effectively changed the beneficiary from his mother to his wife, whom he subsequently married. The Veteran's Administration finally determined, and the trial court held, that the insured had effected a change of beneficiary in accordance with his expressed intentions, and the mother has appealed.

Soon after his marriage on May 30, 1941, the insured was transferred to March Field, New York, and some time later his wife joined him there. On August 18, 1941, he was ordered to report to Windsor Locks, Connecticut, and was accompanied there by his wife, who was at that time an expectant mother. Two days later and on August 20th, he executed a "confidential personal report" required of all flying officers, the declared purpose of which was to compile and maintain accurate personal records of all officers of the Air Corps.¹ The report, which was executed by the insured on a prescribed form, was addressed to the United States Army Airport, Windsor Locks, Connecticut. It stated the full name, rank, branch of service, and address of the insured; that he was married to Ann M. Bradley, who was to be notified at the same address in the event of an emergency. In respect to insurance, the report stated: "Government Insurance: Yes, Amount: $10,000.00, Type: government, Beneficiary: Ann M. Bradley, Location of policy, will or other important papers: with wife." On the next day, the insured lost his life.

The wife was permitted to testify, over the objection of appellant, that the insured had discussed with her the matter of changing the beneficiary in his policy from his mother to her while living in San Antonio, and had expressed an intention to do so "when we got to March Field", but after arriving there he stated that "he would wait until he got to Connecticut" where he would "attend to such matters as signing a will and making arrangements." She was also permitted to testify that he informed her "he had taken care of the insurance at the army base." According to affidavits of a number of his comrades, the insured on numerous occasions discussed with each of the affiants the proposition of changing the beneficiary of his insurance from his mother to his wife — that he had sought and obtained advice from them concerning the method for effecting the change, and had expressed an intention to do so.

After the death of the insured on August 21, 1941, the Veterans' Administration requested, and on November 17, 1941 received, the "confidential personal report", executed by the insured and filed with the Headquarters of the 57th Pursuit Group, Windsor Locks, Connecticut. Thereafter and on November 26, 1941, the Veterans' Administration informed the mother of its receipt of the report, and that according to it, her son had stated that his wife Annie Mae Bradley was the beneficiary under his government insurance. She was further informed that although the insured had the right to change the beneficiary without her knowledge or consent, he had not fully complied with the Administration's regulations in respect thereto. She was advised that if she believed her son wanted to retain her name as beneficiary, she might file her claim on the enclosed form. Thereafter and on April 14, 1942, the wife was advised by the Administration that after a "thorough investigation", it had determined that her late husband had effected a valid change of beneficiary from his mother to her, and that she was therefore recognized as the substituted beneficiary, but that the mother would be given thirty days in which to take such action as she deemed necessary to protect her rights.

Based upon this disagreement (see Act of June 7, 1924, c. 320, Sec. 19, 43 Stat. 612, 38 U.S.C.A. § 445, as amended by Sec. 617 of the National Service Life Insurance Act of 1940, 54 Stat. 1014, Act of July 11, 1942, c. 504, Sec. 6, 56 Stat. 659, 38 U.S.C. A. § 817), the mother brought this suit to have herself declared the beneficiary, alleging that she was the originally designated beneficiary under the policy, and that the insured did not during his lifetime effectively change the beneficiary. In the alternative, she alleged an agreement between herself and the widow to compromise their respective claims on the basis of an equal division of the benefits provided under the policy.

Issues were joined, and based upon the factual stipulation, together with the testimony adduced, including the affidavits of the insured's comrades which were treated as the testimony of the respective affiants, the trial court found "that it was clearly the intention of the deceased soldier to change the beneficiary of his insurance, and to make his wife instead of his mother the beneficiary". The trial court recognized that the burden was upon the one asserting and relying upon a change of beneficiary in the policy, but concluded that the attendant facts were sufficient to overcome that burden and to establish a valid change of beneficiary within the meaning and purposes of the applicable statute and regulations. The policy was reformed accordingly, and judgment entered for the widow, together with attorney's fee in the sum of $850, to be paid out of the accrued payments amounting to $1,315.80. The court also held that an agreement to compromise on a basis of an equal division of the proceeds of the policy, if made, was invalid because prohibited by 54 Stat. 1195, 38 U.S.C.A. § 454a.

The mother appeals from the judgment of the court decreeing a change of beneficiary, and the refusal of the court to recognize and give effect to the alleged compromise agreement. The government appeals from that part of the judgment which awards $850 attorney's fee payable in one lump sum out of the accrued payments under the policy, contending that this method of payment is unauthorized, and prohibited by Section 500 of the World War Veterans' Act of 1924, as amended, 46 Stat. 1016, 38 U.S.C.A. § 551, and made applicable here by 56 Stat. 659, 38 U.S.C.A. § 817.

Clearly, the insured did not designate or intend to designate both his mother and wife as joint beneficiaries — one of them is the sole beneficiary to the exclusion of the other. It follows therefore that an agreement to divide the proceeds of the policy constitutes an assignment by the designated beneficiary of payments of benefits due or to become due under a National Service Life Insurance policy, and that such assignment is specifically prohibited by Section 3 of the Act of August 12, 1935, 49 Stat. 609, as amended by Section 5 of the Act of October 17, 1940, 54 Stat. 1195, 38 U.S.C.A. § 454a. Robertson v. McSpadden, D.C., 46 F.2d 702. The trial court did not err by its refusal to recognize or give effect to the agreement.

The National Service Life Insurance Act of 1940 specifically authorized the insured to designate his mother as the beneficiary of his insurance, and "subject to regulations" it also authorized him to change the beneficiary to his wife without the consent of his mother. 54 Stat. 1009, 38 U.S.C.A. § 802(g). The applicable regulation governing the right to change the beneficiary, as promulgated by the Administrator in pursuance of his statutory authority, 54 Stat. 1012, 38 U.S.C.A. § 808, pertinently provides "* * * a change of beneficiary to be effective must be made by notice in writing signed by the insured, and forwarded to the Veterans' Administration by the insured or his agent, and must contain sufficient information to identify the insured. Whenever practical such notices shall be given on blanks prescribed by the Veterans' Administration. Upon receipt by the Veterans' Administration, a valid designation or change of beneficiary shall be deemed to be effective as of the date of execution * * *." The manifest purpose of the foregoing regulation is to create a legal standard for the orderly administration of the Act by providing a means and method for the exercise of the statutory right of the insured to change the beneficiary of his insurance, and to protect the insurer against conflicting claims for the proceeds of the policy. See Claffy v. Forbes, D.C., 280 F. 233; Peart v. Chaze, D.C., 13 F.2d 908; Chichiarelli v. United States, D.C., 26 F.2d 484; Farley v. United States, D.C., 291 F. 238.

When the policy of insurance matured by the death of the insured on August 21, 1941, the Veterans' Administration had not received any notice in writing, signed by the insured, directing a change of beneficiary of his insurance, and none had been forwarded to the Administration by the insured or his agent. The mother was the recorded beneficiary, and was therefore presumptively entitled to the proceeds of the policy. The burden is upon the widow who claims as a substituted beneficiary to show that the insured during his lifetime effected a valid change of beneficiary from his mot...