Williams v. Williams

• Decision Date: 20 September 1961
• Docket Number: No. 28,28
• Parties: Florence H. WILLIAMS v. Alice H. WILLIAMS.
• Court: North Carolina Supreme Court

Page 536

121 S.E.2d 536

255 N.C. 315

Florence H. WILLIAMS v. Alice H. WILLIAMS.

No. 28

Supreme Court of North Carolina.

Sept. 20, 1961

McMullan, Aydlett & White, Frank B. Aycock, Jr., Elizabeth City, for plaintiff appellant.

John H. Hall, W. W. Cohoon, Elizabeth City, for defendant appellee.

DENNY, Justice.

It is provided in 38 U.S.C.A. § 749, as follows: 'Subject to regulations, the insured shall at all times have the right to change the beneficiary or beneficiaries of a United States Government life insurance policy without the consent of such beneficiary or beneficiaries.'

In light of the provisions of the foregoing statute, the appellant concedes that since she did not pursue the exclusive procedure provided in 38 U.S.C.A. § 784, she has no claim against the Government of the United States, or any agency thereof, as a result of the adverse ruling of the Veterans' Administration and its Board of Veterans' Appeals awarding the proceeds of the two policies of insurance to the defendant as the proper beneficiary named in such policies. Moreover, such ruling is not open to challenge in a State court. In re Greiner's Estate, 195 Wis. 332, 218 N.W. 437; United States ex rel. Norris v. Forbes, Director, 51 App.D.C. 248, 278 F. 331.

In the absence of an appeal in pursuing one's claim to proceeds of insurance policies issued by the Government of the United States, serviced by the Veterans' Administration, the decisions of the administrator of such administration are final and conclusive and 'no other official or any court of the United States shall have power or jurisdiction to review any such decision.' 38 U.S.C.A. §§ 211 and 785.

Consequently, the plaintiff in this action seeks to impress a trust on the proceeds of these insurance policies in her favor. She contends that the defendant's right to retain the proceeds from said insurance policies must be determined in light of the terms of the separation agreement and property settlement entered into between the plaintiff and her former husband.

The appellant further contends there is no distinction between the status of the proceeds of United States savings bonds in the hands of the owner or beneficiary therein and the proceeds of Government life insurance policies in the hands of the beneficiary named in such policies. We do not concur in this view.

While Government savings bonds, Series E, are not assignable and the Code of Federal Regulations provides that 'if either co-owner dies without having presented and surrendered the bond for payment * * *, the surviving co-owner will be recognized as the sole and absolute owner of the bond, and payment will be made only to him,' Tanner v. Ervin, 250 N.C. 602, 109 S.E.2d 460, 462, the weight of authority is to the effect that when the proceeds from such bonds are paid to the owner, such proceeds may be impressed with a trust growing out of a bona fide agreement whereby the holder of such bonds has surrendered his or her interest in the bonds to the co-owner for a valuable consideration. Tanner v. Ervin, supra; In re Hendricksen's Estate, 156 Neb. 463, 56 N.W.2d 711, certiorari denied, Kelly v. Rohn, 346 U.S. 854, 74 S.Ct. 68, 98 L.Ed 368; Tharp v. Besozzi, 128 Ind.App. 73, 144 N.E.2d 430; Chase v. Leiter, 96 Cal.App.2d 439, 215 P.2d 756; Roman v. Smith, 228 Ark. 833, 314 S.W.2d 225.

Furthermore, the Government of the United States has not, by congressional legislation or otherwise, sought to exempt the proceeds from Government savings bonds in the hands of the owner or beneficiary thereof, from attachment, levy, or seizure under any legal or equitable process after receipt by the owner or beneficiary. The proceeds of a Government life insurance policy have been so exempted by congressional action, 38 U.S.C.A. § 3101, which in pertinent part reads as follows: '(a) Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assignable * * * and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.'

In the case of Eldin v. United States, D. C., 157 F.Supp. 34, 36, the plaintiff, Caroline S. Eldin, was married to one Zaky Eldin, and the other plaintiffs, Patricia Eldin and Karen Eldin, were children born of the marriage. Zaky Eldin served in the military forces of the United States and there had been issued to him a National Service Life Insurance policy. Caroline S. Eldin was designated as beneficiary and this policy was in full force and effect at the time of the insured's death on 28 February 1954. On 4 January 1946 Caroline and the decedent separated and on 17 January 1946 a separation agreement was entered into. They were later divorced. The divorce decree entered in the State of Illinois ratified and confirmed the separation agreement. In the separation agreement the decedent agreed to name his wife Caroline his irrevocable primary beneficiary in the insurance policy involved and to name their two children as his irrevocable secondary beneficiaries. On 27 August 1946 the decedent married Eleanor A. Eldin and named her as the beneficiary under his policy. Upon the death of the insured, the plaintiff and the second wife filed claims for the proceeds of the policy. The...