Peart v. Chaze

• Decision Date: 14 May 1926
• Docket Number: No. 1497.,1497.
• Citation: 13 F.2d 908
• Parties: PEART v. CHAZE et al.
• Court: U.S. District Court — Panama Canal Zone

13 F.2d 908 (1926)

PEART v. CHAZE et al.

No. 1497.

District Court, W. D. Louisiana, Alexandria Division.

May 14, 1926.

Peterman, Dear & Peterman, of Alexandria, La., for plaintiff.

Porterie & Bordelon, of Marksville, La., for defendant Chaze.

Philip H. Mecom and Frank O. Chavez, both of Shreveport, La., and John M. George, of Washington, D. C., for the United States and the Veterans' Bureau.

DAWKINS, District Judge.

Louis Ernest Chaze was a soldier in the World War, and was honorably discharged from service on September 25, 1919. At his enlistment on May 24, 1918, he took out war risk insurance for the sum of $5,000, naming as his beneficiary Elliot Ernest Chaze, his minor son. While in the service, monthly premiums were deducted from his pay, but after discharge his policy was allowed to lapse, and was not reinstated until November 7, 1920. He was killed on the 25th of the same month in an automobile accident.

On April 11, 1921, Mrs. Ella Chaze, mother of the deceased and grandmother of Elliot Ernest Chaze, beneficiary named in the policy or certificate of insurance, applied to the state court of Avoyelles parish, La., and was appointed tutrix for said minor, alleging that the mother, present plaintiff, had renounced her rights as natural tutrix. The application set forth that the insurance named represented the entire estate of the deceased. She thereafter, as tutrix of the minor, collected the monthly payments of $28.75, until February 29, 1924, or a total of $1,127.

About that date the present plaintiff, Mrs. Peart, mother of the minor, learned that the deceased had carried insurance. She had been divorced from him in March or April, 1918, prior to his enlistment in the army and the taking of the insurance on May 24th of the same year. This, no doubt, accounts for the fact that at that time his said son was made the beneficiary. On July 3, 1919, plaintiff married a second time. Her minor child, Elliot Ernest Chaze, only issue of her marriage with deceased, at all times continued to reside with his mother in the parish of Rapides, in which jurisdiction she also qualified as natural tutrix for her said son, on August 27, 1921. When the plaintiff learned of the existence of the insurance, she notified the Veterans' Bureau of her appointment as tutrix and of the alleged invalidity of the designation of the defendant, Mrs. Ella Chaze, as such, and demanded that payments in the future be made to her. The bureau ceased all payments, and informed the plaintiff that application would have to be made for the revocation of the letters of tutorship to Mrs. Ella Chaze before plaintiff would be recognized.

Some time between the date in February, 1924, when the plaintiff first advised the department of her interest in the matter, and the 9th of May of that year, there was found among the files of the bureau two letters written by the deceased with regard to a change of beneficiary. The first bore date September "31," 1919, and the second was undated, but bore the receiving stamp of the bureau as of December 4, 1919, both of which letters I quote as follows:

"Sept. 31/19.

"To Treasury Dept., Washington, D. C. — Dear Sirs: Enclosed find check for my insurance for Oct. and Nov. 1919. My serial No. is 2900611. I was discharged Sept. 24. Was master engineer, Jr. grade. I was insured for Elliot Chaze, my son. I wish to change my beneficiary to my mother, Mrs. Jos. U. Chaze.

"Kindly let me know if I could change my policy to an 20 yr. endowment and what it will cost for $2,000.00.

"Kindly answer at once. "Yours respectfully "Signed Lewis Ernest Chaze. "P. S. — I included 20 cents exchange." "Marksville, La.

"Treasury Dept., Washington, D. C.: Now this is the second time I write in regards to my policy, which I want to change to a 20 yr. endowment. I sent ck. last month and a letter to that effect. Now kindly answer and send me necessary papers to fill out. I was insured for Elliot Chaze, my son. Now I want to change the beneficiary to my mother, Mrs. Jos. U. Chaze.

"My policy No. is 2422360 and I want some action on this please.

"Kindly attend to this at once.

"Please do.

"Yours respectfully "Signed L. E. Chaze. "Serial 2900611. "Grade — Master engineer. "Discharged Sept. 26."

After finding these letters, the bureau wrote the attorneys for the defendant Mrs. Ella Chaze, under date of May 9, 1924, advising that it would recognize her as the beneficiary, a portion of which letter I quote as follows:

"You are advised that the mother of this former soldier was designated beneficiary of his insurance prior to his death, and an award will be approved in her favor, following the receipt of form 514, which is inclosed, properly executed by her.

"According to the bureau records, the original beneficiary designated in this case was Elliot E. Chaze, minor son of the insured; but subsequently the insured clearly indicated his desire to have his mother, Mrs. Ella Chaze, receive the benefits of this insurance by requesting a change in two different letters.

"It is believed that the above statement will make it unnecessary to reply to other matters referred to in your recent communication.

"In view of the fact that there is some controversy at present existing between the divorced wife of the insured and the insured's mother, as to who is entitled to benefits in this case, no award will be made until the expiration of 30 days from this letter, in order that they may present any evidence they desire to refute the holding that the letters in question are a proper change of beneficiary, executed by the insured without undue influence and while he was mentally competent to make such a change."

Thereafter the bureau persisted in its decision to pay the installments of insurance to the mother of the deceased, and on November 10, 1924, plaintiff filed this suit, making the government and the mother of deceased, Mrs. Ella Chaze, parties defendant, prayed to be recognized as the lawful tutrix of the minor, Elliot Ernest Chaze, and entitled to receive the proceeds of said insurance for said child as the lawful beneficiary of said policy.

It is the contention of the plaintiff that the policy of insurance was a contract between the government and the deceased, which could only be changed or modified by a strict compliance with its terms, the law, and the regulations of the Treasury Department made pursuant thereto; that the letters relied upon by the department as effecting the change in the beneficiary, when received and recognized as such, were merely expressions of a wish or desire to that end, and never reached the dignity of an application for such change, as contemplated by the statute and regulations thereunder; that, since no lawful change had been made prior to the soldier's death, neither the bureau nor any one else could do anything to defeat or prejudice the vested rights of the minor named as beneficiary; that at the time the said letters were written the policy had lapsed, was no longer in force, and if proper application had been made the same could not have been complied with, because there was no insurance in effect to be changed; and that when the policy was finally reinstated, in November, 1920, it was revived in the same form, with the same terms and conditions which it bore when it lapsed, and which provided for the payment of its benefits to the son, Elliot Ernest Chaze.

The Act of October 6, 1917 (40 Statutes at Large, p. 409), in force when the insurance in this case was originally applied for on May 24, 1918, by section 204, provided:

"Subject to regulations, the insured shall at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries, but only within the classes herein provided." Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 514uuu.

On February 24, 1919, the Treasury Department promulgated what was known as "Treasury Decision No. 41, War Risk Insurance," which is embodied in sections 4137 and 4138 of the Regulations of the United States Veterans' Bureau, reading as follows:

"Sec. 4137. A change of beneficiary to be effective shall be made either (a) by the last will and testament of the insured, or (b) by notice in writing to the United States Veterans' Bureau, signed by the insured or by his duly authorized agent. Whenever practicable such notice shall be given on blanks prescribed by the United States Veterans' Bureau. (T. D. 41, W. R., February 24, 1919, supersedes T. D. 25, W. R.)"

"Sec. 4138. No change of beneficiary shall be effective until the same has been received and recorded in the United States Veterans' Bureau. Payments of installments of insurance shall be made to beneficiaries last of record in the United States Veterans' Bureau until the change of beneficiary has been so received and recorded. (T. D. 41 W. R., February 24, 1919. Supersedes T. D. 25 W. R.)"

It is clear, from these provisions, that the insured had the right to change the beneficiary of his insurance, and the only question to be decided is as to whether that result was legally accomplished by what he did. The main facts of this case are not disputed. When the first letter was written in September, 1919, his former wife had been remarried on July 3d of that year, and according to the undisputed evidence her son had at all times been living with her, and continued to do so after her second marriage.

It is argued by counsel for the defendant Mrs. Chaze, and this appears to be a reasonable human experience, that after being discharged from the army on September 25, 1919, and returning home to find that his former wife had remarried, the deceased feared that the funds to be paid upon his insurance to his son, in event of his death, would fall into the hands of the second husband, so that promptly, on September "31" (probably September 30th) following, he made the first request that the beneficiary be changed to his mother....