Estate of Sanes

• Decision Date: 08 July 1927
• Docket Number: 116-1927
• Citation: 91 Pa.Super. 466
• Parties: Estate of K. I. Sanes. (No. 1.)
• Court: Pennsylvania Superior Court

91 Pa.Super. 466

Estate of K. I. Sanes. (No. 1.)

No. 116-1927

Superior Court of Pennsylvania

July 8, 1927

Argued April 27, 1927

Appeal by residuary legatee from decree of Orphans' Court of Allegheny County-1926, No. 243, in Estate of K. I. Sanes deceased.

Exceptions to decree of distribution of an estate. Before Miller, P. J Trimble and Mitchell, JJ.

The facts are stated in the opinion of the Superior Court.

The court dismissed the exceptions and affirmed the decree of distribution. Sidney Sanes appealed.

Error assigned was the decree of the court.

Henry Ellenbogen, and with him Benjamin Rosenshine, for appellant cited: Kress v. Kress, 75 Pa.Super. 404; Burst v. Weisenborn, 1 Pa.Super. 276; Herrod v. Kimbrough, 83 Pa.Super. 238; Gannon v. Gannon, 88 Pa.Super. 239; French v. Providence Saving Life Assurance, 205 Mass. 424; Grant v. Faires, 253 Pa. 232; Young v. Hipple, 273 Pa. 439.

Maurice Finkelhor, for appellee, cited: Barner v. Lyter, 31 Pa.Super. 435; Mikesell v. Mikesell, 40 Pa.Super. 399; Hani v. Germania Life Insurance Co., 197 Pa. 276; Bonistalli, Admrx. v. Bonistalli, 269 Pa. 8; Scheid v. Storch, et al., 271 Pa. 496.

Before Porter, P. J., Henderson, Trexler, Keller, Linn, Gawthrop and Cunningham, JJ.

OPINION

CUNNINGHAM, J.

At the audit by the Orphans' Court of Allegheny County of the account of the Fidelity Title and Trust Company, executor of the will of Kay Isador Sanes, who died May 9, 1925, a contest arose over the disposition of an item therein of $ 10,300.68, the proceeds of a life insurance policy written upon the life of decedent by the Equitable Life Assurance Society. The proceeds of this policy were claimed by decedent's sister, Fannie Sanes, as the sufficiently designated beneficiary, and it was contended, on the other hand, by Sidney Sanes, a nephew of decedent and a residuary legatee under his will, that they belonged to, and should be distributed as part of, the estate. The auditing judge distributed the entire proceeds of the policy " to Fannie Sanes, sister and assignee of insurance policy claim." Exceptions to the decree of distribution and a petition for a rehearing were filed by Sidney Sanes. The exceptions and petition were argued before the court below, sitting in banc, and a final decree, supported by an opinion, was entered, in which a rehearing was refused, the exceptions dismissed and the decree of the auditing judge affirmed. Sidney Sanes then took the present appeal and his brother Robert the separate appeal to No. 117-1927.

The errors here assigned are that the court below erred: (a) in taking jurisdiction of the contest over the fund, and (b) in awarding it to Fannie Sanes instead of the estate. The following material facts are undisputed: The policy is numbered 2162213 and is called an " Income Bond." Decedent was forty-four years of age at the time it was applied for and it provided for the payment of a life income of $ 1,500 a year to the assured, under the description of " the annuitant," beginning when he reached the age of sixty. The annual premium to be paid during a period of sixteen years was $ 1,080.75. The policy contained a provision for a refund of the " sum of the payments made to the Society" in the event of the death of the assured during the continuance of the contract and before the date upon which the income was to begin. As the assured died before the income was to begin this provision became operative. In the application for the policy, dated May 15, 1915, decedent directed that the income should be payable to him during his lifetime and that the refund, if any, should be made to his " estate." This provision of the policy reads: " If, during the continuance of this contract, the annuitant should die before the date upon which the income is to begin, the Society will .... refund to the annuitant's executors, administrators or assigns --, beneficiary, (the annuitant having the right to change the beneficiary) the sum of the payments made to the Society" etc. The amount due under the policy was $ 10,300.68. On February 7, 1925, about three months before his death, decedent executed, in the presence of a witness, a paper entitled, " Request for Change of Beneficiary." It was addressed to the insurance company on its printed form and was sent by decedent to the office of the Edward A. Woods Agency, the representative of the company at Pittsburgh, in which office it was found when the policy was presented there for payment after the death of the insured. The paper reads: " I hereby certify that there is no existing assignment of my policy No. 2162213 and I now elect to designate a new beneficiary, and request the said Society to make such designation effective by endorsement upon the said policy. (Name of proposed beneficiary) Miss Fannie Sanes, sister." The form contains a printed notice reading: " Please forward policy with this request." There is printed on the reverse side of the policy an appropriate blank form designated as " Change of Beneficiary Register" and a notice that " Entries in this register are to be made only by the Society at its Home Office in New York. No other entries will be recognized." No entries were made in this register on the policy. The provision of the policy relative to the exercise of the right to change the beneficiary is: " If the right to change the beneficiary has been reserved, and there is no written assignment of this contract on file with the Society, the annuitant may from time to time change the beneficiary or beneficiaries by a written request (upon the Society's blank) filed at its Home Office; but such change shall take effect only upon the endorsement of the same hereon by the Society. If there be no beneficiary surviving at the death of the annuitant, any payment thereafter due hereunder shall be made to the annuitant's executors, administrators or assigns."

With respect to assignments the policy contains the following provision: " No assignment of this contract shall be binding upon the Society unless in writing and until filed at its Home Office. The Society assumes no responsibility for the validity of any assignment." The policy itself was found after the death of the decedent in his safe deposit box in the Peoples Savings and Trust Company of Pittsburgh when the box was opened by the representative of the executor. The company raised no question about the extent of its liability under the policy but, in view of the situation then existing, drew its check for the amount due to Fannie Sanes and Fidelity Title and Trust Company, Executor, and Fannie Sanes endorsed the check to the order of the executor. The policy was then surrendered to the insurance company. At the audit the representative of the executor testified:"

Q. Was the check made by the Insurance Company to her?

A. Yes, to Fannie Sanes and the Fidelity Title & Trust Company jointly. Their statement at the time was that they didn't care to pass on the question and Miss Sanes gladly endorsed the check to us to have the matter raised at the audit. Mr. Levin [counsel for executor] explained that to her and explained it was a question of law. We included it in our inventory and in our account and listed it in the audit statement as the claim of Fannie Sanes." Under these facts two questions are raised by the assignments.

1. We have first the question of the jurisdiction of the Orphans' Court to hear and determine the issue. Appellant contends that the money was held by the trust company as stakeholder rather than as executor and that the lower court therefore had no jurisdiction. On this question that court said: " The Fidelity Title and Trust Company took the money and has accounted for it and Fannie Sanes claims it at the audit of this estate as her own by submitting herself to the jurisdiction of this court." In the recent case of Blaszcak's Estate, 90 Pa.Super. 589, Judge Linn, speaking for this court, reviewed and analyzed the decisions of our appellate courts relative to the jurisdiction of the Orphans' Court to dispose of contests over property alleged to belong to the estate of a decedent and also claimed individually by another. In that case the fund in dispute was not a part of the estate at the time of the decedent's death but had been transferred during her lifetime to the claimant and it was there held that the ownership as between the claimant and the estate should be determined by an issue in the Common Pleas. See also Leadenham's Estate, 289 Pa. 216, 137 A. 247, in which the securities in dispute were not included in the inventory. Here, however, the policy was a part of the decedent's estate and its proceeds were, with the consent of the claimant, included in the inventory and account and brought into the Orphans' Court for distribution. Under such circumstances we agree with the court below that it had jurisdiction to adjudicate all questions incident to the proper distribution of the balance shown by the account.

2. The question arising upon the merits is whether this case comes within the established exception to the general rule that in order to effect a change of beneficiary the mode prescribed by the policy must be followed at least substantially. The exception, as stated by Judge Gawthrop in Gannon, App v. Gannon, 88 Pa.Super. 239, and quoted with approval by Mr. Justice Walling in Sproat, App., v. Travelers Insurance Co., Etc., 289 Pa. 351, 137 A. 621, is that " the courts will give effect to the intention of the insured to change the beneficiary by holding that the change has been accomplished where he has done all he could to comply with the provisions of the policy," or, as phrased by Mr. Justice Walling, " where the policy holder has made every reasonable effort to effect a change of beneficiary it...