Funk v. Luithle

• Decision Date: 12 August 1929
• Docket Number: No. 5669.,5669.
• Citation: 58 N.D. 416,226 N.W. 595
• Parties: FUNK v. LUITHLE.
• Court: North Dakota Supreme Court

58 N.D. 416

226 N.W. 595

FUNK

v.LUITHLE.

No. 5669.

Supreme Court of North Dakota.

Aug. 12, 1929.

Syllabus by the Court.

The beneficiary, in a contract of war risk insurance between a soldier in the military service of the United States and the federal government, has no vested interest in the unpaid installments of such insurance.

Under the provisions of federal statute section 514, USCA title 38, when the beneficiary “survives the insured and dies prior to receiving all of the two hundred and forty installments or all such as are payable and applicable,” the remainder of such installments due under the contract is to be paid to the estate of the insured.

When the United States Veterans' Bureau pays to the estate of the insured, in process of probate in this state, the remainder due under such contract of war risk insurance, this fund becomes an asset of the estate, and is to be paid over to persons entitled thereto under the laws of succession of this state.

Section 454 of USCA title 38, providing that such war risk insurance “shall not be subject to the claims of creditors of any person to whom an award is made,” and section 8719 of our Code (Comp. Laws 1913), which provides that “the avails of a life insurance policy * * * when made payable to * * * his * * * estate * * * shall not be subject to the debts of the decedent except by special contract,” have no application to the interest of a distributee, to whom the proceeds of such war risk insurance is given after it has been paid to the estate of the insured.

Where a distributee has received from the estate of a soldier insured by war risk insurance the unpaid installments due under such insurance contract, such money so received is subject to the debts of the distributee, the same as any other property of the distributee.

Appeal from District Court, Stark County; H. L. Berry, Judge.

Action by George H. Funk against Heinrich Luithle, as administrator of the estate of Elizabeth Metzger, deceased. Judgment for plaintiff, and defendant appeals. Affirmed.

Otto Thress, of Dickinson, for appellant.

S. P. Rigler, of Hebron, for respondent.

BURR, J.

Edward Metzger was in the military service of the United States during the World War, and as such had a contract for war risk insurance with the United States, in which Edward Metzger, his father, and Elizabeth Metzger, his mother, were named as beneficiaries. The son died in military service, leaving neither wife nor child. For some time the United States Veterans' Bureau made monthly payments to both beneficiaries, until the father died. The bureau continued making payments to the mother as the sole beneficiary, until she died on June 11, 1927, and at the time of her death the remaining unpaid installments due under the contract of war risk insurance amounted to $6,485.

Prior to the death of the mother the plaintiff commenced an action against her for the recovery of money, and judgment was entered in the district court of Stark county in favor of the plaintiff and against the mother in the sum of $444.57, which judgment was docketed in the district court on May 17, 1927.

Proceedings for the probate of the estate of the mother were commenced in Stark county, and the defendant Heinrich Luithle was appointed administrator. After the death of the mother, proceedings for the probate of the estate of the deceased soldier were commenced in Hettinger county, and an administrator appointed. The amount due from the United States was paid by the bureau to the administrator of the estate of the deceased soldier, and in the settlement of this estate the net proceeds of his estate were paid to the administrator of the mother's estate.

During the process of the administration of the estate of the mother, the plaintiff presented to the county court of Stark county the aforesaid judgment as a claim, but it was rejected by the county court. Plaintiff commenced this action against the administrator, to enforce his claim. The district court found in favor of the plaintiff, and from the judgment entered in favor of the plaintiff the defendant appeals.

It is conceded that the estate of the deceased soldier consisted solely of the amount still due and remaining unpaid under his contract of war risk insurance, and that the whole of the estate of the mother consists of this money received from the estate of her son. It is the contention of the defendant that this money in the hands of the administrator of the estate of the mother is not subject to this debt represented by the judgment, on the theory that this is insurance money, and that the federal exemption statute and the provisions of section 8719, of our Code apply in such cases.

[1] This error arises from a misconception of the nature of war risk insurance. In Von Der Lippi-Lipski v. United States, 55 App. D. C. 202, 203, 4 F.(2d) 168, 169, it is said: “It has been held repeatedly that a beneficiary under such a contract of insurance did not have a vested interest in installments of insurance not accrued, and that such contract is not an ordinary contract of insurance, nor is it in the nature of a pension, but is rather of the character and nature of both.” Under the provisions of the United States statutes (section 10309, Barnes Code for 1919, and statutes amendatory thereof [40 Stat. 615]) beneficiaries, as such, have no vested interest in the contract of war risk insurance. The fact the mother was the beneficiary, named as the person to receive the monthly payments, did not give her a vested interest in unpaid installments of the policy. It is true that under the federal statute only certain persons may be designated as beneficiaries to receive these monthly payments; but the beneficiary has no vested right in the policy. Battaglia v. Battaglia (Tex. Civ. App.) 290 S. W. 296;In re Pivonka's Estate, 202 Iowa, 855, 211 N. W. 246, 55 A. L. R. 570;In re Storum's Estate, 220 App. Div. 472, 221 N. Y. S. 771. The beneficiary could not have, by will, disposed of the unpaid balance due. Sutton's Executor v. Barr's Administrator, 219 Ky. 543, 293 S. W. 1075. See, also, Cassarello v. United States (D. C.) 271 F. 486, affirmed in (C. C. A.) 279 F. 396, where it is held that the contract between the government and the insured is not an ordinary contract of insurance, and that in principle it lacked the character of a vested interest, and the same could not be passed by the last will of the designated beneficiary. See Gilman Heirs v. United States (D....