Roecker v. United States

• Decision Date: 03 July 1967
• Docket Number: No. 21926.,21926.
• Citation: 379 F.2d 400
• Parties: Mrs. Bettie Hallie Stirling ROECKER, Individually and as Administratrix of the Estate of Samuel Carter Stirling, Deceased and Mrs. Nola Chiles, Appellants, v. UNITED STATES of America et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

379 F.2d 400 (1967)

Mrs. Bettie Hallie Stirling ROECKER, Individually and as Administratrix of the Estate of Samuel Carter Stirling, Deceased and Mrs. Nola Chiles, Appellants, v. UNITED STATES of America et al., Appellees.

No. 21926.

United States Court of Appeals Fifth Circuit.

January 5, 1967.

Rehearing Denied July 3, 1967.

Alfred N. Crisler, E. B. Todd, Jackson, Miss., Nola Chiles, in pro. per., W. E. Gore, Jr., Jackson, Miss., for appellants.

B. Stirling Tighe, Robert E. Hauberg, U. S. Atty., Jackson, Miss., for appellees.

Before BROWN, BURGER,^* and WISDOM, Circuit Judges.

Rehearing Denied July 3, 1967, en banc.

WISDOM, Circuit Judge:

These cases, consolidated in the District Court, seek to determine the lawful beneficiary of a $10,000 National Service Life Insurance policy on the life of the late S. Carter Stirling. One case is an interpleader action brought by the United States as the insurer. See 38 U.S.C. § 784(a). The other is an action in the nature of a bill of review removed to the district court from the Chancery Court of the First Judicial District of Hinds County, Mississippi. We hold that the bill of review was improperly removed, and that the final determination of the interpleader action must await the outcome of the state proceedings on the bill of review.

* * * *

A long, unedifying tale lies behind the twistings and turnings in this case. S. Carter Stirling, a bachelor in Jackson, Mississippi, for most of his life, made one short excursion into matrimony. In 1930 he married; in 1936 his wife divorced him, taking with her to California, a daughter, now Mrs. Bettie Stirling Roecker, one of the claimants in this case. After the divorce, Stirling turned to the company of a hometown widow, Mrs. Nola Chiles, another claimant here.

During World War II he served as an officer in the Navy, and while in the service in 1942 procured the policy here in question. He named his father, General J. B. Stirling, as beneficiary.

Stirling, a chronic alcoholic suffering from obesity and high blood pressure, had a series of strokes starting in April-August 1947. By 1955 he was almost totally incapacitated. Meanwhile in 1950, his father, the named beneficiary of the insurance policy, died. Within three weeks Stirling changed the beneficiary of the insurance policy to his friend, Mrs. Chiles. In 1956, on the petition of Stirling's nephew, B. Stirling Tighe, an attorney, the Chancery Court of the First Judicial District of Hinds County (Jackson), Mississippi, declared Stirling non compos mentis, and appointed William S. Moore as his guardian. Mr. Tighe was and continued to be the guardian's attorney.

That was the picture before family legal maneuvers complicated the case. Less than three months after Stirling was declared incompetent, Mr. Tighe petitioned the chancery court to allow the guardian to change the beneficiary of the life insurance policy to the attorney's mother, Mrs. Hallie Stirling Tighe, S. Carter Stirling's sister, and to name the attorney and his sister as joint alternate beneficiaries. The petition recited that Mrs. Tighe was Stirling's next of kin, the natural object of the bounty of the insured. The chancellor (Judge Robertson) informed Mr. Tighe that he was not inclined to grant the change of beneficiary unless Mrs. Chiles, the designated beneficiary, had an opportunity to be heard. Mr. Tighe then advised the court that he would hold the matter in abeyance while he researched the question whether the beneficiary could be designated ex parte. The Administrator of Veterans Affairs, who was made respondent to the petition, filed an answer neither objecting nor waiving objection to the petition but pointing out that Mrs. Roecker rather than Mrs. Tighe was the insured's next of kin. At this point the guardian, through Mr. Tighe, filed an amended petition recognizing, for the first time, Mrs. Roecker's existence, but denying that she had a close relationship with her father and asserting that Mrs. Tighe had taken good care of the ward for years. The chancellor then advised Mr. Tighe that before he would change the beneficiary, he would want to hold a hearing for which both Mrs. Chiles and Mrs. Roecker should receive notice and an opportunity to be heard and represented. Mr. Tighe asked the court once again to hold the matter in abeyance.

About a year and a half later, in 1957, Mr. Tighe, by letter to Mrs. Roecker, offered to initiate proceedings to have the beneficiary of the policy changed to the ward's estate (of which Mrs. Roecker was the sole heir), if Mrs. Roecker would agree to assign a one-half interest in the estate to his mother. When she refused to agree, he proposed a fifty per cent fee contingent on his obtaining the court's permission to name the estate as the beneficiary. Although Mrs. Roecker never agreed to any of these arrangements, in May 1958 the guardian petitioned the chancery court for permission to designate the estate as beneficiary. The petition asked as well for a fifty per cent contingent fee "to Tighe and Tighe, the guardian's * * * attorneys, for their services in instituting such action in his behalf." (Apparently because the federal law, 38 U.S.C. § 784(g), prohibits attorney fees of more than 10% being taken out of the insurance proceeds, this petition requested that the fee be allowed out of the balance of the ward's estate.) The Administrator of Veterans Affairs waived any objection to the proposed change of beneficiary but asserted that any attorney's fees should be only nominal. Judge Robertson, after another conference with Mr. Tighe, granted the guardian permission to change the beneficiary to the estate, but reserved judgment on the fifty per cent fee, saying that it would be best to wait to see how much work was required.

Neither the guardian nor Mr. Tighe took any steps to make the authorized change. Instead, late in 1958, Mr. Tighe reactivated the original petition seeking to designate his mother as beneficiary. He consulted a newly appointed chancellor, Judge Summer, although Judge Robertson was available at the time. Judge Summer testified in this case that he did not recall Mr. Tighe's mentioning the prior proceedings to him; that had he known of Judge Robertson's connection with the case, he would have consulted him before taking any action; that he probably would have decided differently if all the facts had been shown as they were in the district court. Not knowing of the prior proceedings, Judge Summer held an ex parte hearing in December 1958 on the question of designating Mrs. Tighe as beneficiary. At the hearing, Mr. Tighe produced evidence tending to show that Mrs. Roecker had almost no contact with her father, that Stirling had been incompetent in 1950, and that Mrs. Tighe took kind and considerate care of her brother. No evidence to the contrary was presented, since the hearing was ex parte. Judge Summer found that Stirling had been incompetent in 1950, and that the best interest of the ward would be served by designation of Mrs. Tighe as beneficiary. December 19, 1958, Judge Summer entered a final decree granting the guardian's petition and order that the beneficiary be changed to Mrs. Tighe.

Two weeks later Carter Stirling died. Mrs. Tighe, Mrs. Chiles, and Mrs. Roecker all filed claims for the life insurance proceeds. Mrs. Tighe based her claim on the redesignation of beneficiary ordered by Judge Summer. Mrs. Chiles based her claim on the original redesignation by the insured in 1950. She argued that Stirling was competent at the time, and that the redesignation ordered by the court was null and void. Mrs. Roecker, while she agreed with Mrs. Chiles that the court-ordered redesignation should not be given effect, maintained that her father was incompetent in 1950 because of alcoholism, that his designation of Mrs. Chiles was therefore invalid, and that since the designated beneficiary, her grandfather, had predeceased the insured, the proceeds passed by law to his estate.

Upon receipt of the three conflicting claims, the United States brought the present interpleader action to determine which of the three claimants is entitled to the life insurance proceeds. While that action was pending in the district court, Mrs. Chiles and Mrs. Roecker, having learned of the court-ordered redesignation in favor of Mrs. Tighe, filed in the Chancery Court for the First Judicial District a bill in the nature of a bill of review.¹ They asked the court to set aside its former judgment on the ground, inter alia, that the judgment had been procured by the fraud of Mr. Tighe, the guardian's attorney. The fraud consisted, so the plaintiffs alleged, in Mr. Tighe's failure to inform the court of Mrs. Roecker's existence until forced to do so by the VA, his failure to notify Mrs. Chiles and Mrs. Roecker of the hearing so that they could appear and present evidence, his failure to disclose to Judge Summer that Judge Robertson had previously refused to redesignate the beneficiary in favor of Mrs. Tighe in an ex parte proceeding, and his failure to present evidence to Judge Summer which, according to the plaintiffs, was known to him and would have shown that Stirling was competent in 1950, and that there was a continuing love and affection between Mrs. Roecker and her father. Mrs. Tighe removed this action to the district court where it was consolidated with the interpleader action. Neither Mrs. Chiles nor Mrs. Roecker objected to the removal.

The case was tried without a jury. The district judge found that Stirling had been non compos mentis in 1950, and that his designation of Mrs. Chiles was therefore of no effect; that Judge Summer's ex parte redesignation in favor of Mrs. Tighe was proper; that Mrs. Roecker and Mrs. Chiles could not collaterally attack Judge Summer's decree in the federal court; and that there had been no fraud in the procurement of the redesignation. Accordingly, he awarded the proceeds of the policy to Mrs. Tighe. United...