Taylor v. Gardner

• Citation: 393 F.2d 257
• Decision Date: 26 March 1968
• Docket Number: No. 18822.,18822.
• Parties: Opal L. TAYLOR and Mary A. Taylor, Appellants, v. John W. GARDNER, Secretary of Health, Education and Welfare, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

393 F.2d 257 (1968)

Opal L. TAYLOR and Mary A. Taylor, Appellants, v. John W. GARDNER, Secretary of Health, Education and Welfare, Appellee.

No. 18822.

United States Court of Appeals Eighth Circuit.

March 26, 1968.

Opal L. Taylor, St. Joe, Ark., for appellants.

Ned A. Stewart, Jr., Asst. U. S. Atty., Fort Smith, Ark., for appellee; Charles M. Conway, U. S. Atty., Fort Smith, Ark., was on the brief.

Before VAN OOSTERHOUT, Chief Judge, and GIBSON and HEANEY, Circuit Judges.

HEANEY, Circuit Judge.

This appeal caps the eighteen-year effort of Opal Taylor to secure Social Security benefits for herself and her permanently and totally disabled daughter, Mary Alice.

Mrs. Taylor has, with persistence but ineptness, pressed her claim before the Social Security Administration. She has been assisted in her unsuccessful effort by her Senator, her Congressman, the Veterans of Foreign Wars and by counsel in District Court.

There is no doubt as to the need of the mother and daughter, but we can no more award benefits because we sympathize with these needs than we can deny benefits because of an unwillingness to explore the complexities of the problem.

After threading our way through a maze of laws and regulations and searching a voluminous record, we conclude that the need of the Taylors for Social Security benefits is supported by their right to receive them.

The right of the mother and the daughter to receive Social Security benefits is based on wage credits earned by Darwin Taylor, husband and father, while in the United States Navy from 1928 to 1948.¹ It was the usability of these naval wage credits that gave rise to the dispute leading to this appeal.

The Social Security Administration has, from the outset, taken the position that the naval wage credits cannot be used because "the Bureau of Naval Personnel has determined that on the basis of this military or naval service, a benefit is payable by it to Darwin Taylor under another law of the United States." It adds that a benefit was, in fact, paid to Darwin Taylor² from May 7, 1948, the date of his transfer to the Fleet Reserve, to July 28, 1949. On that date, he attacked his wife without provocation and was shot and killed by her in selfdefense.³ The Secretary of Health, Education and Welfare adopted this view when the matter was presented to him on appeal.

Mrs. Taylor's answer to this contention was and is that Darwin Taylor was incompetent to apply for transfer to the Fleet Reserve, that the benefits that he received resulted from this application, and that since he was incompetent when he signed and submitted it, his election is not valid. The Secretary replies that this fact is immaterial. He is joined in this position by the District Court:

"* * * In the opinion of the Court, it is entirely immaterial in the present context whether as of the time of his retirement a service man who has attained the period of service and meets the requirements for retirement under the law, possesses or lacks contractual or testamentary capacity. If his post-September, 1940, quarters of coverage are in fact included in calculating his retirement pay, it is only reasonable they cannot after his death be considered as quarters of coverage for Social Security purposes."

Taylor v. Gardner, 264 F.Supp. 610, 614 (W.D.Ark.1967).

We cannot agree with the Secretary or the District Court.

Receipt of retirement benefits was not automatic. An application to transfer to Fleet Reserve was necessary before the Navy could authorize the payment of retirement benefits. The Naval Reserve Act of 1938, § 204, 52 Stat. 1179, as amended, 60 Stat. 993 (1946). Darwin Taylor was not competent to make the application. It was, therefore, in our judgment, invalid.

It is generally recognized that an incompetent cannot execute a valid will, deed or contract,⁴ make a change of beneficiaries in an insurance policy,⁵ elect to surrender a life insurance policy,⁶ or elect to take under or against a will.⁷

The general rule prohibiting an incompetent from making elections of the type indicated above has been recognized with respect to elections permissible under federal statutes providing benefits to servicemen. Thus, the Uniform Services Contingency Act of 1953, 67 Stat. 501 (1953), makes specific provisions for election by a person determined to be incompetent, § 3(c), 67 Stat. 502, as amended, 10 U.S.C. § 1431 (1964 ed.); the federal regulations provide a manner in which an incompetent may elect whether to receive retirement pay or veterans' benefits, 38 C.F.R. § 3.750(b) (1957), even though the statute makes no specific provisions, see §§ 3104, 3105, 72 Stat. 1230, 1231 (1958), 38 U.S.C. §§ 3104, 3105 (1964 ed.); and the federal courts have held that a fiduciary may change beneficiary of a National Service Life Insurance Policy even though that right to do so is not specifically granted by statute or regulation. Murray v. United States, 107 F.Supp. 290 (E.D.Mich.1950), aff'd per curiam, 188 F.2d 362 (6th Cir.), cert. denied, 342 U.S. 816, 72 S.Ct. 30, 96 L.Ed. 617 (1951).

In Murray, the question was whether the guardian of an incompetent insured could change the beneficiary when the Act provided that such change must be made by the insured. In answering the question in the affirmative, the Court asked rhetorically:

"* * * Should we not in such review take cognizance of the fact that here we have a unique situation not specifically covered or anticipated by either the law as written or the regulations as promulgated?"

Id. 107 F.Supp. at 293.

The reasoning and result of Murray was followed in United States v. Tighe, 229 F.Supp. 680 (S.D.Miss.1964). The Fifth Circuit affirming in part, Roecker v. United States, 379 F.2d 400 (5th Cir. 1967) (rehearing denied en banc), stated:

"* * * But the law does not provide for the eventuality that the veteran insured would become incompetent. We read the word `competent\' into the Act. Although the language of the regulation, read literally, requires the insured to sign the request for change of beneficiary, Congress and the VA surely did not mean to bind the United States to every whim of a lunatic. When it declared that the insured was to have the absolute right to change the beneficiary, Congress operated `against the background * * * of the basic principle\' in our jurisprudence that an incompetent may not validly dispose of his property. See, e. g., 3 Pomeroy, Equity Jurisprudence § 946 (5 ed. Symons 1941). Since it is evident, at least to this Court, that Congress did not intend such an anomalous result, we need not follow the strict language of the regulation. * * *"

Id. at 404 (footnote omitted).

The cases found to be most closely analogous to the precise facts in this case relate to an election by an incompetent school teacher to receive various benefits under the New York statute providing for teacher retirement benefits. Although the statute does not specifically deal with elections by incompetents, the New York courts have developed substantial case law in respect to the question. It has been uniformly established that where an incompetent has been committed as such, his election to receive a certain benefit in lieu of another is invalid. E. g., Feltner v. Teachers' Retirement Board, 235 App. Div. 207, 256 N.Y.S. 826 (1932). Indeed, such an election may only be made by a court of competent jurisdiction and cannot be made by the incompetent's committee, e. g., Moorhead v. Teachers' Retirement Board, 134 Misc. 123, 234 N.Y.S. 626 (1929), or by a relative, Hunn v. New York State Teachers' R. System, 264 App.Div. 188, 35 N.Y.S.2d 49, aff'd, 289 N.Y. 171, 45 N.E.2d 161 (1942). Furthermore, it makes no difference that the incompetent had not been formally adjudicated as such at the time of his election, or that he ever was. E. g., Schwartzberg v. Teachers Retirement Board, 273 App.Div. 240, 76 N.Y.S.2d 488, aff'd, 298 N.Y. 741, 83 N.E.2d 146 (1948); Beisman v. New York City Employees' Retirement Sys., 81 N.Y.S.2d 375 (N.Y.Sup.1948), rev'd on other grounds, 275 App.Div. 836, 88 N.Y.S.2d 411, aff'd, 300 N.Y. 580, 89 N.E.2d 876 (1949); Martin v. Teachers' Retirement Board, 70 N.Y.S.2d 593 (N.Y. Sup.1947).

The rule prohibiting an incompetent serviceman from making an election with respect to benefits conferred by federal statutes was recognized in an earlier case involving Mrs. Taylor. Taylor v. United States, 113 F.Supp. 143 (W.D.Ark.1953), aff'd, 211 F.2d 794 (8th Cir. 1954). There, Mrs. Taylor brought an action against the United States claiming that she was the rightful beneficiary of her husband's service life insurance policy. On April 23, 1944, the decedent had changed beneficiaries on the policy from his wife to his father. The District Court found that the decedent was incompetent on, before and after the date that he made the change and that the attempted change was ineffective. It stated:

"`* * * The mental capacity necessary for a valid change of beneficiaries by an insured is the same as that necessary to execute a valid will, deed, or contract.\'"

Id. at 148.

Implicit in the decision of the Secretary and the District Court is the view that even if Darwin Taylor were incompetent, his choice was so clearly beneficial to himself and his family that it should not now be declared invalid. The District Court stated:

"The argument of plaintiffs would establish a rule of law that would permit a widow or dependent child of a retired service man to enjoy indirectly during the post-retirement lifetime of a spouse or father, the higher benefits resulting from including in his retirement income base the period of time after September 16, 1940, in active military service and then following his death to permit relevant quarters of military or Naval coverage treated as though they had been excluded from his retirement pay base and included in his Social Security quarters of coverage. This `have their cake and eat it, too,\' contention find no support

...