Doss v. Kalas

• Decision Date: 26 June 1963
• Docket Number: No. 7293,7293
• Citation: 94 Ariz. 247,383 P.2d 169
• Parties: Elsie May DOSS, Executrix of the Estate of Richard Harvey Doss, also known as Richard H. Doss, Appellant, v. Margaret KALAS, Guardian of the Estate of Shelley Jo Doss, Appellee.
• Court: Arizona Supreme Court

Page 169

383 P.2d 169

94 Ariz. 247

Elsie May DOSS, Executrix of the Estate of Richard Harvey Doss, also known as Richard H. Doss, Appellant, v. Margaret KALAS, Guardian of the Estate of Shelley Jo Doss, Appellee.

No. 7293.

Supreme Court of Arizona, In Division.

June 26, 1963.

Ramon R. Alvarez, Douglas, for appellant.

Darrel G. Brown, Tucson, for appellee.

LOCKWOOD, Justice.

This is an appeal by Elsie May Doss, as executrix of the Estate of Richard H. Doss, deceased, from an order and decision of the superior court rejecting her contention that decedent's will have her the right to administer the proceeds from two life insurance policies for the benefit of the two surviving minor children.

Richard H. Doss died on the 14th day of September, 1959, a resident of Cochise County, Arizona. During his life he had been married to two different women and there was one child of each marriage. Elsie May Doss, to whom he was married at the time of his death, is the mother of Darryl Preston Doss, and appellant in this action. Margaret Kalas was formerly decedent's wife and is the mother of Shelley Jo Doss. She, as guardian of the estate of her daughter, Shelley, is appellee herein. At the time of his death decedent was insured by two Equitable Life Assurance Society of the United States Life insurance policies, numbers 4161 and 4161DA, in the amount of Six Thousand ($6,000.00) Dollars each. The beneficiaries of the two policies were the minor children of the decedent, Darryl Preston and Shelley Jo Doss, who were to share equally in the proceeds, according to the last records received by the insurance company. Both policies reserved to the insured the right to change the beneficiaries; policy No. 4161DA provided for a specific procedure to be followed to effect the change, but policy No. 4161 did not.

Richard H. Doss died leaving a will. A printed form with blanks for the testator to fill in was used. In the appropriate space is typed the name of 'my wife, Elsie May Doss' as executrix of the last will and testament, and immediately thereafter the typed wording 'and guardian of my insurance to be divided between my son, Preston and my daughter Shelley after all funeral bills have been paid from said insurance.'

Appellant was appointed executrix of the will by the superior court in its probate capacity. Later appellant petitioned for appointment of herself as trustee under the will to administer the insurance proceeds as a trust for the benefit of Preston Doss and Shelley Jo Doss. On August 26, 1960, the court ordered her appointment as trustee of the proceeds of the two insurance policies. However, upon motion for rehearing made by appellee, mother of Shelley Jo Doss, the court revoked the order of August 26, 1960, and ordered the petition of appellant for appointment as trustee denied. It further ordered that she, as guardian of the person and estate of Darryl Preston Doss, was entitled to one-half of the proceeds of the insurance policies; and that appellee, as guardian of the person and estate of Shelley Jo Doss, was entitled to the other one-half of the proceeds, and that appellant should deduct from the proceeds of the insurance policies then in her possession ¹ the amount of the funeral bill of the deceased 'prior to division of the proceeds as herein ordered.'

Appellant claims that the will was an effective method of changing the beneficiary as to policy No. 4161 and that it created a valid trust of the proceeds of both policies which appellant as trustee was entitled to administer.

To determine whether the will effected a change of beneficiaries we consider each insurance policy separately. Insurance policy No. 4161DA provides as follows:

'The employee [the insured] may from time to time during the continuance of the insurance change the beneficiary by a written request, upon the Society's blank, filed at its Home Office, but such change shall take effect only upon the receipt of the request for change at the Home Office of the Society.'

The law is not in agreement whether such a requirement must always be followed to effect a change of beneficiaries. 25 A.L.R.2d 999. In McLennan v. McLennan, 29 Ariz. 191, 240 P. 339 (1925) this court stated that if an insurance policy contract provides the method of changing the name of the beneficiary from one person to another, that particular method provided for in the policy contract is exclusive and must be followed strictly, or the attempted change if of no effect. ² See Cook v. Cook, 17 Cal.2d 639, 111 P.2d 322 (1941). The rationale generally used for such holding is amply illustrated in Stone v. Stephens, 155 Ohio St. 595, 99 N.E.2d 766, 25 A.L.R.2d 992, 996 (1951) quoting from Wannamaker v. Stroman, 167 S.C. 484, 166 S.E. 621, 623 (1932):

"To hold that a change in beneficiary may be made by testamentary disposition alone would open up a serious question as to payment of life insurance policies. It is in the public interest that an insurance company may pay a loss to the beneficiary designated in the policy as promptly after the death of insured as may reasonably be done. If there is uncertainty as to the beneficiary upon the death of insured, in all cases where the right to change the beneficiary had been reserved there would always be a question as to whom the proceeds of the insurance should be paid. If paid to the beneficiary, a will might later be probated designating a different disposition of the fund, and it would be a risk that few companies would be willing to take, * * *." ³

Other authorities, however hold that when the power to make a change of the beneficiary is reserved to the insured by the policy, and the insurer does not demand full compliance with the procedure to effect the change as set out in the policy, the insured may change his beneficiary by a valid will.

'We feel that the provisions of this policy setting up the method by which a beneficiary may be designated or changed are for the protection of the insurer, and we do not feel that the technical provisions are placed in the policy to protect the insured against hasty or impetuous action. In the case now before this court, the insurer is no longer a party, and the battle is between possible beneficiaries. Since this is the case, there is no reason to invoke technical provisions designed to protect an insurer against the possibility of double payment. We feel that the clearly manifested intent of the insured should control.' Sears v. Austin, 292 F.2d 690, 693 (9th Cir. 1961).

We believe that the latter rule is founded on the better reasoning. The provisions in a policy of insurance as...