Continental Assur. Co. v. Conroy
| Decision Date | 31 March 1953 |
| Docket Number | Civ. A. 601-51. |
| Citation | 111 F. Supp. 370 |
| Court | U.S. District Court — District of New Jersey |
| Parties | CONTINENTAL ASSUR. CO. v. CONROY et al. |
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Louis B. LeDuc, Camden, N. J., for cross-claimants Natalie Leona Conroy, Lois Anne Conroy, Robert Conroy and Asa M. Stackhouse, for the motion.
William Reich, Trenton, N. J., for defendant Rebecca Neidich, contra.
Alexander Denbo, Burlington, N. J., for defendants Mr. R. G. Dunn, Estate of Mrs. Emily Taggart, Estate of James Murphy, Ernest Sutton, Alice McCune, Charles Moses and Samuel Lippincott, contra.
James M. Davis, Jr., Mt. Holly, N. J., for defendant John S. Conroy, 3rd.
Plaintiff, The Continental Assurance Company, a corporation of Illinois, authorized to do business in New Jersey, instituted this action of interpleader under 28 U.S.C. §§ 1335, 1397, 2361. The complaint alleges that on or about July 12, 1929, the plaintiff issued a Twenty-Seven Year Convertible Term Insurance Policy in the face amount of $25,000 to John S. Conroy, payable to the estate of the insured, a copy of which is attached to the complaint.
The complaint alleges that the insured died on or about March 30, 1951, and that the proceeds of the insurance policy became due and payable. Members of the insured's family and certain of his creditors have asserted claims to the proceeds, basing their claims on one or more of the changes of beneficiaries, assignments or declaration of trust made by the insured. The insurer, the plaintiff, also claimed an interest in the proceeds, asserting that on or about August 16, 1946, the insured, under a Policy Loan Agreement, borrowed $2,625 from it, assigning the policy to it as security for the loan and that at the time of the filing of the complaint there was due on the policy the sum of $1,742.12, less a refund of loan interest in the sum of $27.04, leaving a balance due the plaintiff of $1,715.08.
The plaintiff paid into the Registry of the Court the sum of $25,000 and named as defendants in the suit all persons mentioned in the changes of beneficiaries, assignments and declaration of trust who may have an interest in the proceeds of the insurance policy.
No objections were raised in the answers to the claim of The Continental Assurance Company. After a hearing the court ordered that the defendants should not institute or prosecute any proceedings in any other court affecting the property involved in this interpleader action. The plaintiff was discharged from all liability in the cause and was awarded the sum of $2,000 out of the money paid into court as its allowance for its costs, expenses and attorney's fees. In addition the plaintiff was adjudged to be entitled to the refund of the sum of $1,715.08 out of the fund, that being the money due it under the Policy Loan Agreement of August 16, 1946.
The various changes of beneficiaries, assignments of the policy and declaration of trust were executed between July 12, 1929, and January 28, 1950, as recorded in the following table:
Date of Change of
Date Acceptance beneficiary
Applied Action Change Effected Reserved
Issuance of Estate of Insured July 12, Yes
policy 1929
Aug. 29, Change of Leona, John S., 3rd, Robert and Sept. 1, No
1929 Beneficiary Lois Anne Conroy made beneficiaries. 1929
Aug. 23, Change of George Neidick, creditor, added to Dec. 9, No
1929 Beneficiary list of beneficiaries. 1929
Jan. 6, Change of Estate of insured made sole beneficiary. Jan. 21, No
1930 Beneficiary 1930
Aug. 22, Change of Leona, John S., 3rd, Robert and Aug. 27, Yes
1937 Beneficiary Lois Anne Conroy made beneficiaries. 1937
Dec. 27, Change of John S., 3rd, Robert and Lois -- Yes
1937 Beneficiary made beneficiaries
Jan. 6, Collateral Howard Eastwood, assignee -- --
1938 assignment
Jan. 6, Change of John S., 3rd, Robert, Lois Anne -- Yes
1938 Beneficiary Conroy made beneficiaries in
new proportions
Mar. 2, Change of Estate of insured, 14 friends, John Mar. 2, Yes
1938 Beneficiary S., 3rd, Lois Anne, and Robert 1938
Conroy named beneficiaries
Mar. 29, Assignment To First Nat. Bank & Trust Co. -- --
1938 of Beverly and Howard Eastwood
Apr. 7, Change of Same persons named beneficiaries April 11, Yes
1938 Beneficiary as above assignees. 1938
Apr. 18, Declaration Settler's family, employees and -- --
1938 of Trust creditors made beneficiaries of
trust
Jul. 24, Change of Leona Force Conroy named beneficiary. Sept. 20, Yes
1939 Beneficiary 1939
Aug. 16, Policy Loan Insured borrowed $2,625 on policy. -- --
1946
Change of Creditors, John S., 3rd, and Robert Aug. 11, ?
Beneficiary T. Conroy made beneficiaries. 1947
Oct. 13, Change of Creditors, Charities, and John S. -- Yes
1948 Beneficiary Conroy, III, named as beneficiaries
with contingencies.
Oct. 21, Change of Creditors, charities, and John S. Oct. 26, Yes
1948 Beneficiary Conroy, III, named as beneficiaries 1948
with contingencies.
Jan. 28, Change of Creditors and John S. Conroy, III, Jan. 30, Yes
1950 Beneficiary named as beneficiaries with contingencies. 1950
Elaborating in greater detail, on March 29, 1938, the insured executed an assignment of his policy to the First National Bank and Trust Company of Beverly, New Jersey, and Howard Eastwood, and on April 7, 1938, the insured made application to the plaintiff for a change of beneficiary, revoking all former designations under the policy and changing the beneficiary to the above named bank and Howard Eastwood, co-trustees under a trust agreement.1 On or about April 18, 1938, the insured executed a declaration of trust in which he mentioned the assignment to the trustees and provided that the assignees, out of the proceeds of the life insurance policy, pay certain sums to designated persons, pay certain obligations of the insured and after making such payments hold the balance in trust paying the income therefrom to the insured's widow, Natalie Leona Conroy, for life or so long as she remained unmarried. Upon her death or remarriage the entire fund was to go to the insured's children, John S. Conroy, 3rd, Robert Conroy and Lois Anne Conroy in proportions set forth in the declaration of trust.
On July 24, 1939, the insured made application to the plaintiff for a change of beneficiary to Leona Force Conway, another way of designating the wife of the insured. An indorsement on the policy indicates that prior to August 11, 1947, the insured applied to have certain creditors and his sons, John S., 3rd and Robert T. Conroy made beneficiaries.
On October 13, 1948, the insured applied for a change of beneficiary, revoking all former designations and specifying that the proceeds of the policy be paid to certain creditors, if living, and the balance to his son, John S. Conroy, 3rd, if living. If this son predeceased the insured, his share was to be paid to certain others. A similar change of beneficiary inuring to the benefit of certain creditors and John S. Conroy, 3rd, was made on October 21, 1948, and on January 28, 1950.
Defendant Board of Trustees of Friends School answered and asserts that it had a claim of $280 against John S. Conroy and that it was named as a beneficiary in that amount in the application for change of beneficiary made by the insured on October 13, 1948, and on October 21, 1948, which later change is asserted to be still in force.
Defendant Rebecca Neidich answered and states that on March 15, 1933, the liquidator of the Burlington City Loan & Trust Company recovered a judgment against John S. Conroy for the sum of $2,611.08. This suit was upon a promissory note, for the payment of which John S. Conroy was primarily liable and George C. Neidich secondarily liable. For valuable consideration the Trust Company assigned the judgment to defendant Rebecca Neidich, who demanded payment of John S. Conroy. It was agreed between the two that Rebecca Neidich would accept in full satisfaction of the judgment the sum of $1,400 and in consideration thereof John S. Conroy would designate her as beneficiary of the proceeds of a life insurance policy to the extent of $1,400. On October 13, 1948, the insured designated this defendant a beneficiary in that amount, and she refrained from instituting proceedings to collect the debt.
By way of answer and amended answer Natalie Leona Conroy, the wife described in the complaint as Leona Force Conroy, Lois Anne and Robert Conroy assert as a first cross-claim that the designation of them and of John S. Conroy, 3rd, as beneficiaries of the insured made by the change of beneficiary executed August 29, 1929, was made without reservation of the power to change beneficiaries and therefore gave these beneficiaries a vested and...
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