Collins v. United States, 3414.

• Decision Date: 23 June 1947
• Docket Number: No. 3414.,3414.
• Parties: COLLINS v. UNITED STATES et al.
• Court: U.S. Court of Appeals — Tenth Circuit

161 F.2d 64 (1947)

COLLINS v. UNITED STATES et al.

No. 3414.

Circuit Court of Appeals, Tenth Circuit.

March 17, 1947.

Writ of Certiorari Denied June 23, 1947.

Louis A. Fischl, of Ardmore, Okl. (Thos. W. Champion, of Ardmore, Okl., on the brief), for appellant.

F. L. Welch, of Antlers, Okl., for appellees A. G. Collins annd Nola Z. Collins.

Cleon A. Summers, U. S. Atty., of Muskogee, Okl., John F. Sonnett, Asst. Atty. Gen., and Searcy L. Johnson, Sp. Asst. to Atty. Gen., (D. Vance Swann, Atty., Dept. of Justice, and Fendall Marbury, Atty., Dept. of Justice, both of Washington, D. C., on the brief), for appellee United States.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

Writ of Certiorari Denied June 23, 1947. See 67 S.Ct. 1756.

HUXMAN, Circuit Judge.

Emma Lee Collins, now McCrummen, instituted this action against the United States and against A. G. Collins and Nola Z. Collins, to recover $10,000, the proceeds of a National Service Life Insurance policy issued to her deceased husband, Warren G. Collins, herein referred to as the insured. The material facts are these: The insured, a single man, was enlisted in the military forces of the United States. He made application for and received an insurance policy for $10,000 in National Service Life Insurance. He named A. G. Collins and Nola Z. Collins, his father and mother, primary and secondary beneficiaries respectively. Thereafter, on April 28, 1942, the insured married appellant. On the day preceding his marriage, but contemporaneous therewith, he voluntarily executed a change of beneficiary of the above policy, naming his wife, the appellant, as the new beneficiary, and his father and mother as contingent beneficiaries. The change of beneficiary was executed on Veterans Administration printed form No. 336, furnished by the Veterans' Administration, and was prepared for him at his request by Beverly G. Tibbals, a civilian employee in the office of personal affairs at Mather Field, California, where he was then stationed. The information contained in the change of beneficiary was furnished by the insured, and the instrument evidencing the change was executed by him in the office of Beverly G. Tibbals. It was executed in duplicate and both copies were delivered to him by Beverly G. Tibbals.

The insured kept the original copy of the executed form in his personal file with other papers in his home, where he and his wife lived until his death. Sometime in November, 1942, shortly after the death of a student pilot at the field, he took the file in which he kept the original change of beneficiary, removed it therefrom, and showed it to his wife, the appellant. He told her what it was and further told her, "If anything happens to me, give this to your father, he will know what to do with it." Thereupon he replaced the instrument in the file and left the file in the desk in their home, where it remained until after his death. On April 25, 1942, he also executed a will in which he named appellant as the sole beneficiary of the estate. He also showed this to her and then placed it in the file with the change of beneficiary.

The insured was killed while in service, December 12, 1943. Immediately after insured's death, appellant's father went to her home and while looking through the desk found the file containing the change of beneficiary. The next morning appellant gave this file to her father and related what the insured had told her concerning the change of beneficiary. Appellant returned with her father to his home, taking the file with her. Neither she nor her father sent in the change of beneficiary to the Veterans' Administration until after appellant had had some correspondence with the Veterans Administration and had been advised that insured's father was the beneficiary. Thereafter, on February 24, 1944, she forwarded the change of beneficiary to the Administration, where it was received February 26, 1944. This was the first receipt by the Administration of any notice of change. The reason given for not forwarding the change of beneficiary sooner was that neither she nor her father knew that it was necessary. Both were under the impression that one had already been sent to the Administration, and that the one in their possession was a copy, to be kept by them.

The insured was an officer in the Air Corps and as such had a desk in one of the office buildings at the Army Air Field. In this desk he had a personal 201 file, provided for the personal papers of an officer. Army regulations provided that upon the death of an officer, a summary court officer should be appointed to take charge of the affairs of the deceased officer, inventory the property found in his desk, and send his personal property found in his desk to his next of kin. The summary court officer appointed for this purpose found the carbon copy of the change of beneficiary upon Veterans' Administration Form 336 in the insured's personal 201 file. He sent this carbon copy, together with insured's other personal effects, to appellant. Upon the death of insured, his personal 201 file was not accessible to any one except the summary court officer.

Prior to going into the Army, insured had taken out insurance in a private insurance company, naming his father as beneficiary therein. After the birth of his son, he wrote the company a letter requesting a change of beneficiary to his son and giving his father as contingent beneficiary. He received the necessary papers to effectuate this change from the company, executed them, and returned them to the company. While there was some conflict in the evidence, the trial court found that insured prior to his death made rather frequent references to his insurance, and that his wife was the beneficiary thereof. The court also found that it was the intention, purpose and desire of the insured that appellant be the beneficiary of his insurance, and that he probably thought that he had effected such a change. The court, however, concluded as a matter of law that under the evidence and the law as declared by this court in Bradley v. United States, 143 F.2d 573, appellant had not sustained the burden of proving that insured during his lifetime had effected a valid change of beneficiary. Judgment was accordingly entered for the father of insured. It is from this judgment that this appeal is prosecuted.

The situation, then, is this — when the insured died, his father was the recorded beneficiary in the policy. The Veterans' Administration had received no notice of a change of beneficiary. The burden therefore rested upon any one claiming as a substituted beneficiary to show that the insured during his lifetime had effected a valid change of beneficiary.¹ Whether appellant met this burden is the only question in this case.

Insurance policies are contracts between the insured and the company.² The parties are free to make any contract they may choose, not prohibited by law,³ and when once they have made their contract they will be bound thereby, and when the contract is free from ambiguity, the court has no latitude in interpreting or enforcing its provisions. It is only where there is ambiguity in some of the provisions of the agreement that the equitable powers of the court may be invoked in construing the contract in a light most favorable to the insured.⁴

38 U.S.C.A. § 802(g) provides in part as follows: "The insured shall have the right to designate the beneficiary or beneficiaries of the insurance * * * and shall, subject to regulations, at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries * * *". The applicable regulation of the Veterans' Administration in force at the time reads in part as follows: "A change of beneficiary may be made by the insured at any time and without the knowledge or consent of the previous beneficiary, except that no change of beneficiary may be made by last will and testament * * *. 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. * * * Upon receipt by the Veterans Administration a valid * * * change of beneficiary shall be deemed to be effective as of the date of execution; Provided, that any payment made before proper notice of designation or change of beneficiary has been received in the Veterans Administration shall be deemed to have been properly made and to satisfy fully the obligations of the United States under such insurance policy to the extent of such payments."

It has been held without exception that a mere intent to change a beneficiary is not enough. Such an intent must be followed by positive action on the part of the insured evidencing an exercise of the right to change the beneficiary. Where the courts diverge is as to the degree of affirmative action necessary to effect a change. Literal compliance with the provisions of a policy for the change of a beneficiary is not necessary. It is a general rule that where the insured has manifested an intent to change a beneficiary and has done everything reasonably necessary to accomplish a change, leaving only ministerial acts to be performed, courts of equity will treat as done that which ought to be done, thus effectuating the intent of the insured.⁵

Here we have more than the expressed intent of the insured to change the beneficiary. We have positive and affirmative action on his part. The insured did everything that was necessary on his part to evidence a change in beneficiary. He obtained the particular form required by the regulation. He had a civilian employee whose duty it was to assist him to fill out the form as required, and signed it. Nothing remained for him to do in order to authorize the insurance company to make the change as soon as the notice came to its attention. The only other thing that remained was to bring the executed...