Fleming v. Smith, 36928

• Decision Date: 09 April 1964
• Docket Number: No. 36928,36928
• Citation: 64 Wn.2d 181,390 P.2d 990
• Parties: Donald D. FLEMING, as Guardian ad Litem for Michael Allan Smith, a minor, Respondent, v. Mary L. SMITH, Appellant.
• Court: Washington Supreme Court

Page 181

64 Wn.2d 181

390 P.2d 990

Donald D. FLEMING, as Guardian ad Litem for Michael Allan Smith, a minor, Respondent, v. Mary L. SMITH, Appellant.

No. 36928.

Supreme Court of Washington, Department 2.

April 9, 1964.

Brethorst, Fowler, Bateman, Reed & McClure, Seattle, for appellant.

Donald D. Fleming, Seattle, for respondent.

RUMMEL, Judge. ¹

Norton M. Smith was married in New Mexico on December 7, 1957. He signed a divorce complaint on the 30th of that month in King County, Washington, alleging that a child would be born to his wife sometime in July, 1958, and stating his willingness to pay support for such child.

On the 12th of June, 1959, Norton M. Smith appeared in court and obtained a divorce. His wife did not appear, but was represented by counsel. A property settlement providing for the custody and support of his minor son, Michael Allan Smith, was stipulated into the record, and a divorce was granted to the plaintiff husband.

This decree provided the wife should have custody of the son, subject to reasonable rights of visitation to the father, that monthly payments were to be paid by the plaintiff for the support of the child, and

'* * * that the plaintiff shall maintain in full force and effect that certain National Service Life Insurance policy upon plaintiff's life, No. R 51823-00-05, in the face amount of Ten Thousand Dollars, and that Michael Allan Smith, the minor child of the parties, shall be designated as beneficiary until his majority; that the plaintiff shall not encumber the policy in any way and shall be required to keep said policy in full force and effect during the minority of the minor child; * * *.'

Norton M. Smith died on November 5, 1961, but the record is devoid of any evidence that he made the slightest effort to change the beneficiary of his National Service Life Insurance policy to name his son. The policy, issued to him prior to his marriage, named his mother as beneficiary, and upon her filing a claim, the proceeds were paid to her by the United States.

This action was brought on behalf of the minor to acquire the proceeds from Mary L. Smith, decedent's mother. A motion to consolidate the probate proceedings of the decedent with this case and for summary judgment was made on behalf of the minor son. The defendant mother moved for judgment on the pleadings. The court consolidated the two proceedings and granted summary judgment in favor of the minor child. Decedent's mother has appealed.

The appellant mother contends that the right of the assured to designate the beneficiary is absolute, and that the trial court should have granted the motion for judgment on the pleadings and dismissed the action. Appellant asserts that Congress has clearly stated the right to designate and change the beneficiary as an absolute right of the serviceman by this language of the statute:

'The insured shall have the right to designate the beneficiary or beneficiaries of insurance maturing on or after August 1, 1946, and shall, subject to regulations, at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries.' 38 U.S.C.A. § 717(a), p. 264.

Appellant also asserts that a further provision indicates that the courts cannot touch the proceeds in any manner, under the following section:

'Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. * * *' 38 U.S.C.A. § 3101(a), p. 135.

A great many cases dealing with the interpretation of these sections have been before the courts of this country. In 2 A.L.R.2d 490 is a large collection of these cases, together with a detailed analysis of the whole subject.

In view of the existnce of this rather complete treatise, it is unnecessary to do more here than to state briefly some of the established principles. Because of the substantial identity of the National Service Life Insurance Act of 1940 with the War Risk Insurance Act of World War I, the decisions dealing with change of beneficiary under the latter act are largely applicable. The rules governing private life insurance do not govern relationships under the statutorily created National Service Life Insurance.

It is well settled that, under the statutes, an insured has the absolute right to change the beneficiary, and this is so despite any agreements made in consideration of advances made to him to pay premiums, or regardless of irrevocable covenants not to change the beneficiary, or for any other reason.

A regulation of the Veterans' Administration promulgated pursuant to statutory authority provides that, to be effective, a change of beneficiary must be made by notice in writing signed by the insured and forwarded to the Administration, must contain sufficient information to identify the insured, and when practicable such notice shall be on blanks provided by the Administration. However, it is thoroughly settled that the veteran, in exercising his right to change the beneficiary, need not comply literally with these regulations.

There is no difference of opinion in the decisions as to the first requirement to evidence a change of beneficiary, that is, that the insured must have a manifest intent to change the beneficiary. The split of authority seems to be over what actual act, if any, must be coupled with a showing of intent before the courts will treat the change of beneficiary as having...