Stone v. Stephens

Decision Date21 April 1950
Docket NumberNo. 514,514
Citation92 Ohio App. 53,110 N.E.2d 18
PartiesSTONE v. STEPHENS et al.
CourtOhio Court of Appeals

Syllabus by the Court.

1. The right of a named beneficiary to the proceeds of a policy of life insurance becomes vested upon the insured's death, and where the policy prescribes the procedure for changing beneficiaries and the insured makes no effort to effect such change in compliance therewith during his lifetime, an attempted change of beneficiary by will is ineffective.

2. Where a married woman is named beneficiary in a policy of insurance on the life of her husband and remains such beneficiary until the husband's death, she is entitled to the proceeds of the policy notwithstanding the fact she had obtained a divorce prior to the insured's death.

3. In a controversy between two or more parties claiming to be beneficiaries of the same policies of life insurance, the insurer may interplead and thereby waive any interest in the outcome of the action and the cause may proceed among the respective claimants uninfluenced by any right or interest of the insurer.

Routzohn, Routzohn & Nevin, Dayton, for appellant.

Merritt E. Schlafman, Dayton, for appellees.

WISEMAN, Judge.

Two actions were instituted in the Common Pleas Court of Greene County by Jeannette Marie Stone, formerly the wife of Sylvan Ray Garver, deceased, for declaratory judgments seeking to determine who was entitled to the proceeds of two insurance policies issued on the life of the decedent Garver. The actions, involving the same questions of law, were heard and decided together.

During the pendency of the litigation, the plaintiff Jeannette Marie Stone, died, and the actions were revived in the name of her administrator, John C. Glenn, who appeals to this court on questions of law from an adverse judgment of the trial court.

On January 4, 1943, Garver purchased an insurance policy and a trust certificate (in the nature of an insurance policy) and named his then wife, Jeannette Marie Garver, as beneficiary, reserving the right to change the beneficiary. On July 5, 1944, Jeannette Marie Garver obtained a divorce in the state of Florida and was restored to her maiden name of Jeannette Stone. On July 18, 1944, Garver, while serving as a pilot in the Royal Air Force; Air Transport Command, and while stationed in the city of Montreal, Canada, executed his will in which he gave all his property to his wife, 'including all or any insurance policies on my life,' and provided further: 'Should I die unmarried, I hereby give and bequeath all my said property to my grandmother, Mrs. Frank Stephens, presently residing at 43 Clover Street, Fairfield, Ohio.'

On December 16, 1944, Garver disappeared at sea and was subsequently listed as dead.

The actions for declaratory judgments were brought by Jeannette Marie Stone, the former wife of the decedent, for the purpose of securing judgments declaring that she was entitled to the proceeds of the policies. Permelia Stephens, as an individual and also as administratrix with the will annexed of Sylvan Ray Garver, deceased, and designated in his will as Mrs. Frank Stephens, the Investors Syndicate of America, Inc., and The Western & Southern Life Insurance Company were named parties defendant. The two insurance companies interpleaded, acknowledging their obligation to pay, and paid into court the amounts due under their respective policies.

The question presented is whether the insured could change the beneficiary named in the policies by the execution of a will. The policies contained provisions setting forth the steps to be taken in order to effect a change of beneficiary. The record does not disclose that the insured made any attempt to change the beneficiary in the manner prescribed in the policies. At the time of the death of the insured, his former wife, Jeannette Marie Garver, remained the designated beneficiary of the policies.

The trial court found that the insured by the execution of his will clearly indicated his intentions to change the beneficiary and did all that he could do under the circumstances to effect the change. The court found that the defendant Permelia Stephens was the beneficiary and entitled to the proceeds of the policies. The only error assigned by the plaintiff-appellant is that the judgment of the Common Pleas Court is contrary to law.

It is contended that where a married woman is named as a beneficiary in a policy of insurance on the life of her husband, she is entitled to the proceeds of the policy, notwithstanding a divorce obtained by her before his death. Counsel for the plaintiff cite in support of this proposition Overhiser's Adm'x v. Overhiser, 63 Ohio St. 77, 57 N.E. 965, 50 L.R.A. 552; Treadway v. Tewksbury, Ohio App., 49 N.E.2d 955; Hergenrather v. State Mutual Life Assur. Co., 79 Ohio App. 116, 68 N.E.2d 833; 29 American Jurisprudence, 976, Section 1309. It is conceded that the fact that plaintiff's decedent was divorced from the insured would not deprive her estate of the right to recover the proceeds of the policies in which she was named as beneficiary.

It is also contended that where the policy provides the steps to be taken to effect a change in the beneficiary such provisions of the policy must be followed to effect such a change. 29 American Jurisprudence 984, Section 1315. This rule of strict construction has long since been abandoned by the courts in Ohio. It has been held that the provisions in a policy with respect to the manner in which the change of beneficiary can be effected is for the benefit and protection of the insurer and may be waived by it. Atkinson v. Metropolitan Life Ins. Co., 114 Ohio St. 109, 150 N.E. 748; Arnold v. Newcomb, 104 Ohio St. 578, 136 N.E. 206; Glen v. Aetna Life Ins. Co., 73 Ohio App. 452, 56 N.E.2d 951; Union Central Life Ins. Co. v. Macbrair, 66 Ohio App. 144, 31 N.E.2d 172; Pennsylvania Mutual Life Ins. Co. v. Mecklenborg, 16 Ohio Law Abst. 162.

It has also been held that, in any controversy between a former named beneficiary and a new beneficiary, if the insurance company interpleads in an action to recover the proceeds of the policy, it thereby waives any interest in the outcome of the action and the cause shall proceed between the respective claimants uninfluenced by any rights or interest of the insurance company. Atkinson v. Metropolitan Life Ins. Co., supra.

In the instant case the insuring companies, having interpleaded and paid the amounts due under their policies into court, are no longer interested in the outcome of this proceeding. The above-cited cases are authority for the proposition that a strict compliance with the terms of a policy with respect to the method of changing the beneficiary is not required, and if the insured, during his lifetime, clearly indicates his intention to change the beneficiary the consent of the insurance company is not essential. Atkinson v. Metropolitan Life Ins. Co., supra.

However, the principle of law laid down in those cases does not reach the question presented here.

The question before us is: Can the insured change the beneficiary by a provision in his will?

Where the insured reserves the right to change the beneficiary named in the policy such beneficiary's interest is not vested but remains only an expectancy during the life of the insured, contingent upon the designated beneficiary being the beneficiary at the time of the insured's death. If no change is made during the life of the insured, the interest of the beneficiary becomes vested at the insured's death. Katz v. Ohio National Bank, 127 Ohio St. 531, 191 N.E. 782; Arnold v. Newcomb, supra, 104 Ohio St. 586, 136 N.E. 206; 46 C.J.S., Insurance, § 1173, p. 62. In 29 American Jurisprudence, 952, Section 1276, it is stated that upon the death of the insured without changing the beneficiary in fact or law, the fixed rights of the beneficiary cannot be affected by any subsequent act of the insurer. Payment of funds into court neither improves nor prejudices the legal position of either party. McDonald v. McDonald, 212 Ala. 137, 102 So. 38, 36 A.L.R. 761. In Miller v. Miller, 200 Iowa 1070, 205 N.W. 870, 43 A.L.R. 567, it was held that the method prescribed in the policy for a change of beneficiary is exclusive and the insured cannot change the beneficiary by will.

In 46 C.J.S., Insurance, § 1176, p. 85, is found this statement:

'Where the policy prescribes and regulates the method of changing the beneficiary, the method prescribed is generally held to be exclusive to the extent that insured may not change the beneficiary by will and thereby dispose differently of the proceeds of the policy.'

The precise question presented in the instant case was determined in Aetna Life Ins. Co. v. Mallory, 291 Mich. 701, 289 N.W. 302; Cook v. Cook, 17 Cal.2d 639, 111 P.2d 322; and Parks' Ex'rs v. Parks, 288 Ky. 435, 156 S.W.2d 480.

In the Michigan case the court held that the insured did not evidence any intention to change the beneficiary during his lifetime and in attempting such change by will his intention became effective only on his death.

In the California case the court held that a beneficiary under a will has no vested right until the death of the testator; that the right of the beneficiary to the proceeds of a life insurance policy becomes vested upon the death of the insured, and no expression in the insured's will purporting to change the...

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4 cases
  • Sun Life Assurance Co. of Canada v. Jackson
    • United States
    • U.S. District Court — Southern District of Ohio
    • August 5, 2016
    ...and any attempt to change the beneficiary after that point is ineffective. Doc. #50, PAGEID #711-12 (citing Stone v. Stephens, 92 Ohio App. 53, 57, 110 N.E.2d 18 (2d Dist. 1950)). Sun Life argues that principle applies even when, as here, the Policy is governed by ERISA. Consequently, Sun L......
  • Cannon v. Hamilton
    • United States
    • Ohio Supreme Court
    • March 13, 1963
    ...authority of the cases of Hergenrather v. State Mutual Life Assur. Co. of Worcester, 79 Ohio App. 116, 68 N.E.2d 833; Stone v. Stephens, 92 Ohio App. 53, 110 N.E.2d 18; and Overhiser's, Admx. v. Overhiser, 63 Ohio St. 77, 57 N.E. 965, 50 L.R.A. 552, 81 Am.St.Rep. The cause is now in this co......
  • Modarelli v. Midland Mut. Ins. Co.
    • United States
    • Ohio Court of Appeals
    • May 3, 1967
    ...(Overhiser, Admx., v. Overhiser, 63 Ohio St. 77, 57 N.E. 965, 50 L.R.A. 552, approved and followed.)' See, also, Stone v. Stephens, 92 Ohio App. 53, 110 N.E.2d 18; Hergenrather v. State Mutual Life Assurance Co., 79 Ohio App. 116, 68 N.E.2d 833; Valentine v. Van Schoyck, 19 Ohio Law Abst. 5......
  • Kenneth H. Sidaway v. Betty Winters, Executrix of the Estate of Hazel G. Russell, 85-LW-3319
    • United States
    • Ohio Court of Appeals
    • August 16, 1985
    ... ... the insured, the interest of the beneficiary becomes vested ... at the insured's death." Stone v ... Stephens (1950), 92 Ohio App. 53, 57, affirmed ... (1951), 155 Ohio St. 595 ... The ... contract of deposit ... ...

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