McCollum v. Sieben, 14796.

• Decision Date: 01 April 1954
• Docket Number: No. 14796.,14796.
• Citation: 211 F.2d 708
• Parties: McCOLLUM v. SIEBEN et al.
• Court: U.S. Court of Appeals — Eighth Circuit

211 F.2d 708 (1954)

McCOLLUM v. SIEBEN et al.

No. 14796.

United States Court of Appeals, Eighth Circuit.

April 1, 1954.

David W. Raudenbush, St. Paul, Minn. (Morgan, Headley, Raudenbush & Morgan, St. Paul, Minn., on the brief), for appellant.

Vance B. Grannis and Grannis & Grannis, South St. Paul, Minn., submitted brief on behalf of appellee Lorraine B. Sieben.

George E. MacKinnon, U. S. Atty. for the Dist. of Minnesota, Minneapolis, Minn., and Clifford Janes, Asst. U. S. Atty., Redwood Falls, Minn., submitted brief on behalf of appellee United States of America.

Before SANBORN, WOODROUGH and THOMAS, Circuit Judges.

THOMAS, Circuit Judge.

Raymond J. Sieben, a veteran of the United States Army, died as the result of a gunshot wound on September 3, 1949. At the time of his death he was the owner of two contracts of National Life Insurance, one for $8,000 and one for $2,000. Both contracts were in full force and effect under premium paying conditions and both matured on account of his death.

The insured soldier had been married twice. This controversy involves the rights of the two surviving wives to the proceeds of the insurance. The facts are not in dispute.

The insured was first married to Virginia J. Sieben on November 23, 1945. He obtained a divorce from her on October 4, 1947. She was the last named beneficiary in both insurance contracts. Prior to the entry of the decree of divorce the parties entered into a written property settlement which provided in part that the insured was to deliver to defendant her typewriter, pay her the sum of $334.25, and —

"That save and except as herein otherwise provided there shall be no further order in favor of the defendant and against the plaintiff for alimony, support money, property settlement, attorney fees, or costs."

The decree of divorce entered by the court adjudged "That the Defendant has treated plaintiff the insured in a cruel and inhuman manner since the date of their marriage and that plaintiff is entitled to a divorce from the bonds of matrimony and the Plaintiff and Defendant be, and they hereby are, divorced forever."

And plaintiff was ordered to pay defendant the sum of $334.25.

The decree provided further "That Plaintiff be, and he hereby is, except as hereinbefore provided, released from further order in favor of defendant * * for alimony, support money, property settlement, attorney fees and costs, either temporary or permanent."

Thereafter Virginia Sieben was again married and her name is now Virginia J. McCollum. The insured, Raymond J. Sieben, was also remarried. His second wife, appellee herein, is Lorraine B. Sieben. To this marriage a son named Gary Sieben was born on July 16, 1949. This son and his mother, Lorraine B. Sieben, are the only surviving heirs of the insured soldier.

Lorraine B. Sieben commenced this action against the United States on November 9, 1950, claiming as beneficiary under both insurance contracts. The United States answered alleging that at the time of his death the insured Raymond J. Sieben was the holder of two insurance certificates for $8,000 and $2,000 respectively; that Virginia J. Sieben was designated as the beneficiary of both policies; that no change had been made by the insured in his lifetime and that at the time of his death both policies were in full force and effect; that Virginia Sieben filed with the Veterans Administration a claim for the insurance benefits, which claim was allowed, and Virginia J. Sieben had been paid all of the benefits under the $2,000 policy and $1,623.44 under the $8,000 policy; liability for the unpaid balance was admitted, and it was averred that the United States had at all times been "willing and able to pay the balance of the insurance policies to such person or persons who may be entitled thereto"; and alleging further that "Virginia J. Sieben McCollum * * * is a necessary and indispensable party to this controversy" and praying that she be joined as a party defendant.

The court entered an order joining Virginia J. Sieben as an additional party defendant. She answered admitting the receipt of the payments alleged by the United States to have been made, and claiming the balance due as the designated beneficiary. And she alleged that Lorraine B. Sieben's claim had been considered and denied administratively and, after appeal, by the Board of Veterans Appeals.

The case was tried to the court as a suit in equity. 38 U.S.C.A. § 445. The court made findings of fact and conclusions of law and entered judgment for plaintiff Lorraine B. Sieben and against the United States for the unpaid balance of the $8,000 policy less an attorney's fee in favor of her attorneys.

The court found that the government had paid to Virginia J. (Sieben) McCollum the $2,000 policy in full and $1,623.44 on the $8,000 policy, which "by virtue of the express terms of Veterans Administrative Regulation No. 3447 (38 C.F.R. § 10.3447)" shall "be deemed to have been properly made and to satisfy fully the obligations of the United States under the said policy of insurance; that * * the United States is relieved and discharged from all liability under the said $8,000 policy to the extent of $1,623.44."

The court also found that the property settlement entered into between the insured soldier and Virginia J. Sieben, now Virginia J. McCollum, at the time of their divorce in October, 1947, "operated as a revocation by the insured of the previous designation of * * * Virginia J. (Sieben) McCollum, as principal beneficiary of" both policies of insurance.

In both policies the insured's mother Emma Sieben was designated as contingent beneficiary. She was made an additional party defendant in the case but did not enter her appearance in the proceedings. And the court found that the proceeds of the $8,000 policy remaining unpaid had become payable to her but that she "has executed an assignment of all her rights, title and interest in and to the $8,000.00 policy to the insured's widow, Lorraine B. Sieben, the plaintiff herein, as shown by a signed copy of the assignment filed in this cause; that, accordingly, the death benefits under the said policy", less the installments already paid, are payable to the plaintiff Lorraine B. Sieben.

Virginia J. (Sieben) McCollum has appealed from the judgment so entered. She seeks a reversal of the judgment, claiming that "she is entitled, as designated beneficiary", to judgment for the unpaid balance of the insurance proceeds, because —

1. The property settlement agreement and divorce decree cannot operate as an exercise by the insured of his right to change or revoke his designation of appellant as primary beneficiary; and

2. Neither can they operate as a waiver or equitable transfer on her part of her interest in the policies of the insured.

In support of these contentions appellant asserts that the court erred —

(a) In receiving in evidence, over appellant's objections, certified copies of the divorce decree and property settlement referred to supra;

(b) In finding that the property settlement agreement and divorce decree operated as a waiver or equitable transfer on the part of appellant of her interest in the insurance policies;

(c) In finding that the property settlement agreement and divorce decree operated as a revocation of the designation of appellant as principal beneficiary of the policies; and in entering...