Kit v. Stecker

• Decision Date: 15 January 1940
• Docket Number: No. 7187.,7187.
• Citation: 109 F.2d 281
• Parties: KIT v. STECKER.
• Court: U.S. Court of Appeals — Third Circuit

109 F.2d 281 (1940)

KIT v. STECKER.

No. 7187.

Circuit Court of Appeals, Third Circuit.

January 15, 1940.

E. A. Howell and Lloyd Goman, both of Chester, Pa., for appellant.

A. Albert Feldman, of Philadelphia, Pa., for appellee.

Before BIGGS, JONES, and BIDDLE, Circuit Judges.

BIDDLE, Circuit Judge.

This is an interpleader proceeding involving claims to a $1,000 group life insurance certificate in the Equitable Life Assurance Society. The plaintiff, Helen Kit, alleged that she was named beneficiary by Peter Stacy, the deceased assured; and the defendant, Anna Stecker, a sister of Peter Stacy, claims both as administratrix of his estate and as belonging to the class designated by the policy where no beneficiary had been named.

The individual certificate issued to the deceased by the Society provided: "Subject to the terms and conditions of the policy the insurance is to be payable to the beneficiary"; and the form for request for change of the beneficiary which accompanied the policy, contained the words: "Subject to the right of the Insured to change the beneficiary in accordance with the policy provisions." When the policy was issued on February 1, 1936, it had the following beneficiary clause: "Any employee may from time to time while insured hereunder change the beneficiary by a written request upon the Society's blank filed at its Home Office. Such change to take effect only upon the receipt of the request for change at the Home Office of the Society." On February 1, 1937, this clause was amended to read: "Any employee insured hereunder may from time to time, while this policy is in force, change the beneficiary. Every change of beneficiary must be made by written notice to the employer, signed by the employee. Upon receipt of said notice by the employer a record of such change will be entered by the employer upon the insured's records maintained by it in connection with the insurance under this policy and unless such entry is made the change shall not be effective." Neither Stacy nor Mrs. Kit had any actual knowledge of the contents of the policy. Early in September, 1937, Stacy filled in on the form the name and address of Helen Kit and wrote above this: "In case of my death, ful Beneficiary for the sum of one Thousand Dollars goes to Mrs. Helen Kit and no body else." He signed the form, on which the date of February 4, 1936, had already been typewritten; his signature was witnessed by Jane McCollough, and he delivered the executed request for change and the certificate to Mrs. Kit, telling her that he was giving her the policy. He died October 15, 1937. The question presented, therefore, is whether this was a sufficient designation of the beneficiary under the provisions of the policy. The District Court for the Eastern District of Pennsylvania refused to enter judgment for Anna Stecker, the defendant, on her statutory demurrer. The case was tried, and the jury found a verdict in favor of Helen Kit, under instructions that they must determine whether Stacy intended to make Mrs. Kit his beneficiary, and "whether he did all that could be reasonably expected" to that end. Thereafter, the court entered judgment for the defendant stating in the accompanying opinion that under the decisions something more than a mere intention is necessary to effect a change of beneficiary, and that since the policy required that the request should reach the company, "the insured must at least start a communication of his intention moving in that direction." 29 F.Supp. 261. The learned trial judge was of the opinion that the proof showed only "that the insured had formed an intention that Mrs. Kit should have the money * * * which is not sufficient. * * *"

The question is a narrow one. How closely do directions in a policy relating to the manner of effecting a change in the beneficiary have to be complied with? The early cases required strict compliance. A will devising death benefits from a lodge was held not to comply with the regulations adopted by the lodge that the change of beneficiary must be made on the certificate in a prescribed form; Vollman's Appeal, 92 Pa. 50. Bell v. Police Beneficiary Ass'n, et al., 270 Pa. 407, 411, 113 A. 417, 418, held that a requirement in the by-laws of a benevolent association that the consent of beneficiaries was necessary before the change could be made, must be complied with. The "right must be exercised strictly in accord with the by-laws of the association * * *." These two cases dealt with beneficial associations, and perhaps do not present entirely the same considerations as clauses found in the policies of insurance companies. But in Kress v. Kress, 75 Pa.Super. 404, the Superior Court of Pennsylvania held that where the method required notice and a return of the policy for endorsement the giving of the notice by letter alone was not sufficient. Judgment in favor of the original beneficiary was entered by the court on an interpleader proceeding. The court found that the insured had not done all he could to complete the change. "The valid substitution of the beneficiary depended upon a full compliance with the terms provided in the contract of insurance * * *."

As the lower court in the case before us indicated, the execution of the request or the endorsement of the policy alone is not sufficient. Some external act of delivery or surrender must be made. Jinks v. Banner Lodge, 139 Pa. 414, 418, 21 A. 4, 5; Thomeuf v. Knights of Birmingham, 12 Pa.Super. 195, 201; Sproat v. Travelers' Ins. Co., 289 Pa. 351, 137 A. 621, 622, where the insured signed the blank request, but did not return it, and the court said, quoting from Corpus Juris, that a "mere unexecuted intention to change the beneficiary is not sufficient"; and in Stoll v. Boyle, Casserly, appellant, 116 Pa.Super. 64, 176 A. 43, the court held that the execution of a will did not satisfy a requirement of written notice of a change of beneficiary in a mutual benefit association.

Other and more recent cases have taken a more liberal view by endeavoring to give effect to the intention of the assured where this intention has been clearly expressed, or where the holder of the policy "has made every reasonable effort to effect a change."¹ Thus in Beaver Trust Co. v. Kertis, 298 Pa. 322, 324, 148 A. 471, 472, the provision was that the policy must be returned with the written request to modify so that the name of the new beneficiary could be endorsed on the policy. The second beneficiary was claiming under a change executed by the decedent while in the hospital two days before his death, but not delivered to the company until eight days thereafter. The Supreme Court said: "An assignment would be valid...