Lewis v. United States

• Decision Date: 15 February 1932
• Docket Number: No. 4459.,4459.
• Citation: 56 F.2d 563
• Parties: LEWIS v. UNITED STATES et al.
• Court: U.S. Court of Appeals — Third Circuit

56 F.2d 563 (1932)

LEWIS v. UNITED STATES et al.

No. 4459.

Circuit Court of Appeals, Third Circuit.

February 15, 1932.

John B. Nicklas, Jr., of Pittsburgh, Pa., for appellant.

Louis E. Graham, U. S. Atty., and Wm. J. Aiken, Asst. U. S. Atty., both of Pittsburgh, Pa., and William Wolff Smith, Gen. Counsel, U. S. Veterans' Bureau, L. A. Lawlor, and D. W. Washburn, all of Washington, D. C.

Wm. H. Stanton, of Pittsburgh, Pa., for Virginia T. Mossett.

Before BUFFINGTON, WOOLLEY and THOMPSON, Circuit Judges.

THOMPSON, Circuit Judge.

This is an appeal from an order of the District Court for the Western District of Pennsylvania refusing to remove a judgment of nonsuit and to direct a new trial. The facts of the case are as follows:

William R. Mossett was a soldier of the United States during the World War. He was honorably discharged March 6, 1919. He made application for the reinstatement and conversion of $2,000 of his war risk term insurance, as he was entitled to do under Act June 2, 1926, 44 Stat. 686 (38 USCA § 512). In response to this application, a policy naming Mary C. Lewis, his aunt, beneficiary, was issued and delivered to him on July 1, 1927. The insured, by letter to the Veterans' Bureau dated August 19, 1928, directed that Virginia T. Mossett, whom he named as his wife, be designated the beneficiary in place of Mary C. Lewis. The change was made a few days later. On December 5, 1928, the insured died. The United States Veterans' Bureau refused to pay the proceeds of the policy to Mary C. Lewis, the first named beneficiary, because its records showed that Virginia T. Mossett was the beneficiary. A contest, therefore, arose between Mary C. Lewis and Virginia T. Mossett as to the distribution of the proceeds of the policy. Mary C. Lewis brought suit against the United States and Virginia T. Mossett as defendants.

The plaintiff claimed and offered testimony to prove (1) that she had a vested interest in the proceeds of the policy under an agreement with the insured for a valid consideration that she was to be named the beneficiary and that the beneficiary would not be changed; (2) that the change making Virginia T. Mossett beneficiary was invalid because she was not the wife of the insured, and did not come within the permitted class of beneficiaries set forth in the War Risk Insurance Act; (3) that, at the time the insured directed the change, he was incompetent by reason of intoxication; (4) that the change of beneficiary was invalid because it was made on a Sunday and was therefore contrary to the law of Pennsylvania.

Upon trial by jury, the District Judge, on motion of defendants, entered judgment of compulsory nonsuit.

An agreement not to change the beneficiary named in an insurance policy issued by the United States under the War Risk Insurance Act in consideration of money advanced to the insured by the beneficiary is invalid, and cannot be enforced so as to prevent the insured from changing the beneficiary. White v. United States, 270 U. S. 175, 46 S. Ct. 274, 70 L. Ed. 530; Von Der Lippi-Lipski v. United States, 55 App. D. C. 202, 4 F. (2d) 168; United States v. Sterling, 12 F. (2d) 921 (C. C. A. 2). The trail judge, therefore, rightly excluded evidence offered of such agreement which, it was claimed, had been entered into between the plaintiff and the insured.

The right of Virginia T. Mossett, designated as beneficiary by the soldier in his letter to the Veterans' Bureau on August 19, 1928, to collect on the policy without proof that she was the insured's lawful wife, depends on whether the Act of May 29, 1928, permits designation of any person as beneficiary of converted insurance without regard to a permitted class. Section 300 of the Act of June 7, 1924 (38 USCA § 511), provided:

"The insurance shall be payable only to a spouse, child, grandchild, parent, brother, sister, uncle, aunt, nephew, niece, brother-in-law or sister-in-law, or to any or all of them, and also during total and permanent disability to the injured person."

The enumeration of beneficiaries in the act related to both yearly renewable term insurance and converted life insurance. The act May 29, 1928, § 13 (38 USCA § 511), amended the 1924 act so as to read: "Yearly renewable term insurance shall be payable only to a spouse, child, grandchild, parent, brother, sister, uncle, aunt, nephew, niece, brother-in-law, or sister-in-law, or to any or all of them, and also during total and permanent disability to the injured person."

In that language converted insurance is not included.

The United States Veterans' Bureau has uniformly construed the 1928 act as allowing the insured to designate the beneficiary in a policy for converted insurance without regard to any permitted class. Regulations and Procedure of the United States Veterans' Bureau, vol. 2, p. 77, § 3035. A report of the House Committee of Congress, which is in substance identical with that of the report of the Senate Committee (Report No. 1297, 70th Congress, First Session, to accompany H. R. 13039) is quoted in the margin.¹

From these reports it is obvious that the intention of Congress was to remove any restrictions upon designation of beneficiaries in converted life insurance policies.

The plaintiff cites decisions to the effect that a life insurance policy may not be issued in favor of one not having an insurable interest in the life of the insured. In the instant case, the beneficiary, when the policy was issued, was his aunt, who had an insurable interest. The question here is not ruled by the cases cited, but comes within the principle announced by the Supreme Court in Grigsby v. Russell, 222 U. S. 149, 32 S. Ct. 58, 56 L. Ed. 133, 36 L....