Farley v. United States

• Decision Date: 16 July 1923
• Docket Number: E-8599.
• Citation: 291 F. 238
• Parties: FARLEY et al. v. UNITED STATES et al.
• Court: U.S. District Court — District of Oregon

291 F. 238

FARLEY et al. v. UNITED STATES et al.

No. E-8599.

United States District Court, D. Oregon.

July 16, 1923

Huntington & Wilson, of Portland, Or., for plaintiffs.

Thomas H. Maguire, of Portland, Or., for the United States.

Dey Hampson & Nelson and Paul P. Farrens, all of Portland, Or for defendant Farley.

WOLVERTON District Judge.

Kenneth Claire Farley enlisted in the United States army on May 31 1917, at Portland, Or., and was assigned to active duty July 7th at Camp Lewis, Wash., training camp. He was the adopted son of G.J. and Esther E. Farley. He applied for and was granted war risk insurance in the sum of $10,000, effective November 22, 1917, and designated as his beneficiaries his adoptive mother and sister, in the sum of $5,000 each. On August 31, 1918, he was married to Ruth Blair, who is known in this proceeding as Ruth Blair Farley. Farley died October 20, 1918, intestate, leaving as his widow Ruth Blair Farley. An award was made in the Bureau of War Risk Insurance April 4, 1919, to Mrs. Esther E. Farley and Etta Farley, with monthly payments to each of $28.75, commencing October 21 1918. This was amended, with the same award, payment commencing November 21, 1920. Payment, however, was suspended, but was resumed in April, and continued to October 31, 1921; all back payments in the meantime being made. This award was canceled, and another made and approved December 30, 1921, with payment of $57.50 to Ruth Blair Farley, as beneficiary, commencing October 21, 1921. This latter award is controverted by the original beneficiaries; they claiming that the deceased at no time made any changes in beneficiary, or designated Ruth Blair Farley as his rightful beneficiary. This suit was instituted to cancel the latter award, and to recover from the government the accruing payments. Both the government and Ruth Blair Farley are contesting the claim of plaintiffs.

The controversy depends upon whether the deceased, in his lifetime, made a regular and legal designation of his wife as beneficiary under his war risk insurance. That Farley intended to make such change in beneficiary can hardly be denied, in view of the evidence submitted at the trial. He applied to Maj. George H. Ball, Quartermaster Corps, for a blank form with which to change the designation of his beneficiary, and was given a blank appropriate for the purpose. Shortly afterwards Farley appeared at the orderly office, which was the first sergeant's office, and presented to John H. McDougall, company clerk, 'blanks filled out.' Being asked, 'What kind of blanks?' McDougall testified:

'Insurance and allotment both. They were made out wrong, and I took them and penciled in the notes on these blanks, and being so busy, and having so many papers ahead of me, I threw them on the back of the desk with another pile of papers, of insurance blanks and allotment changes on the back of my desk, to give them attention as I could, in the order that I could, as I had to do on account of the lot of work that was piled onto us and forced onto us at this time. There was an awful lot of it. * * * Sergeant Farley signed, in my presence, these forms in blank, and this form that he had filled out, which was wrong, and I penciled in the changes as it should be, was fastened onto these forms and thrown in the pile on top of my desk.'

Witness gives as the reason why he remembers the transaction so well that the soldiers, on being apprised of the fact that Farley was married, 'started to kid him,' and he was induced to furnish the cigars for the boys. Farley signed the required number of blanks, and witness is not sure whether it was in triplicate or duplicate. In the usual course then observed at the orderly office, these blanks would be filled in by typewriter, and dispatched on their way to the proper officers entitled to their custody. Witness does not say further that he has any recollection of filling these blanks, or respecting what he did with the papers.

The blanks, when filled out and signed by the applicant, under the regulations, all went by messenger to the company commander, to be witnessed by him. They were then returned to the first sergeant's office, to be disposed of as follows: One to be deposited with the soldier's service record, kept in the orderly office, in an envelope used for the purpose; one mailed to the Bureau of War Risk Insurance, at Washington; and one sent to the camp insurance officer at division headquarters.

No trace has been had of these papers showing designation of change of beneficiary since McDougall had them, as testified by him, although the allotment or family allowance papers, witnessed by the company commander, are in their proper place in the files of the bureau. The rules of the Bureau of War Risk Insurance respecting change of beneficiaries, obtaining at a time prior to the death of Farley, are as follows:

'(1) Every change of beneficiary shall be made in writing and shall be signed by the insured and be witnessed by at least one person. No change of beneficiary shall be valid unless and until it is recorded in the Bureau of War Risk Insurance. A change of beneficiary shall, wherever practicable, be made upon blanks prescribed by the bureau.

'(2) A change of beneficiary may be made by last will and testament. Payments of installments of insurance shall be made to the beneficiaries last of record in the bureau until the bureau receives notice of such change. In the absence of any beneficiary of record, payments shall be made according to the laws of intestacy, as provided in article IV, until the bureau receives notice that a beneficiary was designated by last will and testament.'

The strong contention of counsel for plaintiffs is that no change...