New York Life Insurance Company v. Lawson

• Citation: 134 F. Supp. 63
• Decision Date: 02 September 1955
• Docket Number: Civ. A. No. 1500,1501.
• Court: U.S. District Court — District of Delaware
• Parties: NEW YORK LIFE INSURANCE COMPANY, Plaintiff, v. Norman S. LAWSON, Executor of the Estate of Marcia L. Winn, Margaret B. Manear and Sara Neff Grove, Defendants. NEW YORK LIFE INSURANCE COMPANY, Plaintiff, v. Norman S. LAWSON, Executor of the Estate of Marcia L. Winn, and Joseph T. (sometimes known as Joe T.) Winn, Defendants.

134 F. Supp. 63

NEW YORK LIFE INSURANCE COMPANY, Plaintiff, v. Norman S. LAWSON, Executor of the Estate of Marcia L. Winn, Margaret B. Manear and Sara Neff Grove, Defendants.

NEW YORK LIFE INSURANCE COMPANY, Plaintiff, v. Norman S. LAWSON, Executor of the Estate of Marcia L. Winn, and Joseph T. (sometimes known as Joe T.) Winn, Defendants.

Civ. A. Nos. 1500, 1501.

United States District Court D. Delaware.

September 2, 1955.

Richard F. Corroon (of Berl, Potter & Anderson), Wilmington, Del., for plaintiff.

Caleb M. Wright, Georgetown, Del., for defendant Norman S. Lawson.

Ralph S. Baker, Georgetown, Del., for defendants Margaret B. Manear, Sara Neff Grove and Joseph T. Winn.

LEAHY, Chief Judge.

Plaintiff insurance company filed a bill of interpleader seeking an adjudication of beneficiaries entitled to the proceeds of three insurance policies upon the life of the late Marcia L. Winn. The total proceeds of the three policies satisfy the requisite jurisdictional amount. There is no dispute of facts for a stipulation of facts was agreed to by all parties. Prior to August 14, 1954, the deceased was the owner of three annuity policies whose beneficiaries were:

Policy No. 113 254 — Joseph T. Winn

Policy No. 202 825 — Margaret B. Manear and Sara Neff Grove

Policy No. 213 234 — Margaret B. Manear and Sara Neff Grove

By letter dated August 14, 1951, Mrs. Winn wrote to plaintiff requesting "forms and instructions for changing beneficiaries in three policies I have in your company". Two days later plaintiff replied, requesting names of the proposed beneficiaries and their relationships so the proper forms could be forwarded. To plaintiff's letter the insured replied in her own handwriting,¹ dated August 31, 1951, in part as follows:

"I would like the beneficiaries of the three annuities to be changed to payable to my estate (so that in case of my death the amounts to be put in with the general estate) and I shall attend to the individuals in my will." (Emphasis by the insured).

On September 13, 1951, Marcia L. Winn died, after having first made her will, dated September 8, 1951, naming defendant Lawson executor of her estate. Thereafter by letter dated September 17 plaintiff forwarded the "official" forms to be completed for the change in beneficiaries with instructions they be signed, witnessed and returned to plaintiff with the three policies.

The policies provide the procedure for change of beneficiary:

"Beneficiary. The Annuitant may from time to time change the Beneficiary, unless otherwise provided by indorsement on this Policy or unless there be an existing assignment of this Policy. Every change of beneficiary must be made by written notice to the Company, at its Home Office accompanied by the Policy for indorsement of the change thereon by the Company, and unless so indorsed the change shall not take effect. After such indorsement the change will relate back to and take effect as of the date the Annuitant signed said written notice of change whether the Annuitant be living at the time of such indorsement or not, but without prejudice to the Company on account of any payment made by it before receipt of such written notice at its Home Office. Unless otherwise provided herein, the interest of any beneficiary dying before the Annuitant shall vest in the Annuitant."

1. The question for decision is whether the deceased during her lifetime effected a legally recognizable change of beneficiaries. Defendants Winn, Manear and Grove (original beneficiaries) contend the deceased's mere expression of a desire to change beneficiaries, absent a transmittal of the policies to the plaintiff-insurer for indorsement, does not constitute compliance with the formal requirements of the policies. Defendant Lawson, qua executor, argues the deceased did all within her power to disclose her intention to consummate the change of beneficiaries before her death.

2. All counsel for claimants agree the Delaware Courts have adopted the substantial compliance doctrine in cases involving validity of a change of beneficiary, but part company in their views whether the deceased's actions in the instant case fall within the ambit of this equitable principle.

3. From the legion of cases involving status of beneficiaries under policies of insurance, certain fundamental principles are guide-posts in the determination of this problem.² A named beneficiary has a vested interest in a policy of insurance unless the right to change the beneficiary is reserved in the policy or given by statute.³ An insurer, however, has no discretion to refuse to indorse the change of beneficiary in the policy when the insured has sent the policy to the home office with a request for the change.⁴ A court of equity, considering that done which ought to be done, will treat an attempted change as actually accomplished, where the insured has done all she could to bring about that end to the extent her intent is plainly manifested.⁵

For decision here I adopt Chancellor Wolcott's view in New York Life Insurance Co. v. Cannon,⁶ where concerning the necessity for compliance with the policy provisions in attempting a change...