Day v. Bradshaw

• Decision Date: 20 November 1939
• Citation: 5 S.E.2d 514
• Parties: DAY et al. v. BRADSHAW et al.
• Court: Virginia Supreme Court

5 S.E.2d 514

DAY et al.

v.BRADSHAW et al.

Supreme Court of Appeals of Virginia.

Nov. 20, 1939.

【[COPYRIGHT MATERIAL OMITTED]

Appeal from Circuit Court, Nottoway County; Robert F. Hutcheson, Judge.

Proceeding by L. R. Bradshaw, administrator of the estate of Albert E. Clarke, deceased, against Elsie H. Day and others and Joseph D. Bradshaw and others, wherein the administrator filed a petition for direction as to proper distribution of proceeds of war risk policy in his hands. From a decree for defendant Joseph D. Bradshaw and others for the entire fund of $2,582, less the cost of administration and the cost of the proceeding, Elsie H. Day and others appeal.

Affirmed.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, JJ.

Ashby Williams, of Washington, D. G, for appellants.

H. H. Watson and Fielding L. Wilson, both of Crewe, for appellees.

SPRATLEY, Justice.

The stipulated facts in this case are as follows:

Albert E. Clarke, while in the military service of the United States, took out a $10,000 yearly renewable term War Risk Insurance policy. He named himself as beneficiary. He died intestate December 13, 1918, while the policy was in force. His heirs-at-law at the time of his death were Dr. Frank V. Clarke, a brother, and the three children of Bessie Clarke Bradshaw, a deceased sister, namely Joseph D. Bradshaw, L. R. Bradshaw, Jr., and T. C. Bradshaw.

On March 18, 1919, Dr. Clarke made an application to the Bureau of War Risk Insurance, as sole beneficiary, for the payments under the policy of his deceased brother. On March 24, 1919, the Veterans' Bureau awarded to him the sum of $57.50 per month, the full amount of the monthly payments due under the policy, beginning from the date of December 13, 1918. Dr Clarke received these monthly payments from that date until the date of his death on December 14, 1934. The payments amounted to a total of $11,040.

The three Bradshaws, nephews of Albert E. Clarke, received no payments under the insurance policy.

Dr. Clarke died intestate, leaving surviving him as his sole heirs-at-law his widow, Elsie H. Clarke, who has since intermarried with a man named Day, and two infant children, Frank D. Clarke, born April 4, 1929 and Thomas E. Clarke, born September 27, 1931. He left no estate. H. E. Mayhew, however, qualified as administrator thereof.

On June 1, 1935, the Bradshaws made inquiry of the Veterans' Bureau as to the amount of insurance payable under the policy of the deceased veteran. In reply, the Bureau admitted an over-payment of $5,117.50 to Dr. Clarke, and said that if it had known of the existence of the nephews it would have amended the award to Dr. Clarke to allow payment of one-half of the installments to them from March 4, 1920, the effective date of the Act of Congress of December 24, 1919. 41 Stat. 371. It declined to recognize any claim of the Bradshaws to the unpaid balance and advised them that the commuted value thereof would be paid to the administrator of the estate of the veteran.

At the time of Dr. Clarke's death, there remained to be paid in the future 48 monthly installments of $57.50 each, of a commuted present value of $2,582. This sum was paid to L. R. Bradshaw, administrator of Albert E. Clarke, the deceased soldier.

On October 7, 1937, L. R. Bradshaw, administrator, filed his petition in the Circuit Court of Nottoway county, asking direction for a proper distribution of the funds in his hands, received as proceeds from the insurance policy of Albert E. Clarke.

Joseph D. Bradshaw, L. R. Bradshaw, Jr., and T. C. Bradshaw, the nephews of the insured, claimed that they were entitled to the entire funds, since Dr. Clarke had received, in over-payments alone, a sum in excess of $5,000, to which they were lawfully entitled. The widow and children of Dr. Clarke denied that the latter had received any amount in excess of that to which he was lawfully entitled, or any amount to which the Bradshaws were entitled. They asserted their claim to one-half of the $2,582, proceeds in the handsof the administrator, as distributees of Dr. Clarke, under the Virginia laws of descent and distribution. They further contended that if there had been any over-payment of the monthly installments to Dr. Clarke, their rights as distributees of the deceased veteran were not affected.

The trial court by decree entered on March 21, 1938, held that the nephews of the deceased veteran were entitled to the entire fund of $2,582, less the costs of administration and the costs of the proceeding.

The policy of War Risk Insurance was issued under the Act of Congress of October 6, 1917, chap. 105, art. 4, sec. 400, 40 Stat. at L. 398, 409. The contract of insurance was made expressly subject, in all respects, to the provisions of that Act, to any amendments thereto and to all the regulations thereunder then in force or thereafter adopted.

At the time of the death of Albert E. Clarke, the War Risk Insurance Act, as amended June 25, 1918, 40 Stat. at L. 609, 615, section 21, provided that the insurance was payable in 240 monthly installments, and only in favor of a spouse, child, grandchild, parent, brother or sister, and that "if no beneficiary within the permitted class be designated by the insured, * * the insurance shall be payable to such person or persons within the permitted class of beneficiaries as would under the laws of the State of the residence of the insured be entitled to his personal property in case of intestacy."

By amendment of December 24, 1919, made effective as of October 6, 1917, 41 Stat. at L. 371, 375, section 13 (subsequently re-enacted in World War Veterans' Act, U.S.C.A., Title 38, section 511) the class of permitted beneficiaries was enlarged to include uncles, aunts, nephews, nieces, brothers-in-law and sisters-in-law of the insured. It further provided that all awards of insurance under the War Risk Insurance Act, as originally enacted and subsequently amended, should be revised as of the first day of the third calendar month after its enactment.

In 1924, Congress passed the World War Veterans' Act (June 7, 1924, chap. 320, sec. 1 et seq., 38 U.S.C.A. § 421 et seq.), revising and re-enacting all existing laws relating to soldiers' insurance, and repealing the War Risk Insurance Act, 43 Stat, at L. 607. Section 303 of the new Act, as amended March 4, 1925, 43 Stat. at L. 1310 U.S.C.A. Title 38, section 514, so far as material here, reads as follows:

"If no person within the permitted class be designated as beneficiary * * * by the insured * * * or if the designated beneficiary * * * dies prior to receiving all of the two hundred and forty installments * * * there shall be paid to the estate of the insured the present value of the monthly installments thereafter payable, said value to be computed as of date of last payment made under any existing award: Provided, That all awards * * * which were in course of payment on [the date of the approval of this Act] March 4, 1925, shall continue until the death of the person receiving such payments * * *. When any person to whom such insurance was awarded prior to such date dies * * * there shall be paid to the estate of the insured the present value of the remaining unpaid monthly installments of the insurance so awarded to such person: * * * This section shall be deemed to be in effect as of October 6, 1917."

Under the policy of insurance, the only relation of contract was between the insured soldier and the Government. It was not a contract entered into by the United States for gain. As said by Mr. Justice Holmes, in White v. United States, 1926, 270 U.S. 175, 46 S.Ct. 274, 275, 70 L. Ed. 530, 531: "All soldiers were given a right to it and the relation of the Government to them if not paternal was at least avuncular. It was a relation of benevolence established by the Government at considerable cost to itself for the soldier's good. It was a new experiment in which changes might be found necessary * * *. If the soldier was willing to put himself into the government's hands to that extent no one else could complain." He further said that the interest of any beneficiary in the contract was vested only so far as the insured and the Government had made it so; that the contract was subject to any conditions upon which they might agree; and that the beneficiaries were merely volunteers.

In Madden v. United States, D.C., 1936, 18 F.Supp. 534, 536, the court following White v. United States, supra, said: "Congress had power to make retrospective changes in the insurance contract, altering rights that would ordinarily be deemed vested."

Subsequent amendments govern the disposition of proceeds from these policies, even where the insured has died before the enactment of such amendments. Singleton v. Cheek, 1932, 284 U.S. 493, 52 S.Ct. 257, 76 L.Ed. 419, 81 A.L.R. 923; McCullough v. Smith, 1934, 293 U.S. 228, 55 S.Ct. 157, 79 L.Ed. 297.

The estate of a beneficiary in a War Risk Insurance policy has no vested interest in the installments of the insurance due after the death of a beneficiary. Price v. McConnell, 153 Va. 567, 149 S.E. 515, and cases cited; 43 Stat. at L. 1310, U.S.C.A. Title 38, section 514.

The amendments in question here, by virtue of the original statute and the provisions, on their own faces, became and were retroactive to October 6, 1917.

In view of that fact, and the foregoing cases from the Supreme Court of the United States, Hatch v. United States, D.C., 1928, 29 F.2d 213, relied on by appellants, was expressly disapproved in Madden v. United States, supra.

The facts show that at the date of the death of Albert E. Clarke, the insured, in 1918, Dr. Clarke, the brother of the insured, was the only person within the then permitted class of beneficiaries entitled to receive monthly payments under the policy. With the enactment of the 1919 amendment, however, the three Bradshaws, his nephews, came within the enlarged class of permitted beneficiaries and...