Wissner v. Wissner 8212 1949, No. 119

• Court: United States Supreme Court
• Writing for the Court: CLARK
• Citation: 338 U.S. 655,94 L.Ed. 424,70 S.Ct. 398
• Decision Date: 06 February 1950
• Docket Number: No. 119
• Parties: WISSNER et al. v. WISSNER. Argued Dec. 6—7, 1949

338 U.S. 655 70 S.Ct. 398 94 L.Ed. 424 WISSNER et al.

v.

WISSNER.

No. 119. Argued Dec. 6—7, 1949. Decided Feb. 6, 1950. Rehearing Denied March 27, 1950.

See 339 U.S. 926, 70 S.Ct. 619.

Under the National Service Life Insurance Act providing that insured shall have right to designate beneficiaries of insurance and that payments to named beneficiary shall not be subject to attachment, levy, or seizure, etc., proceeds of policy wherein insured had designated his mother as beneficiary and his father as contingent beneficiary were payable to mother notwithstanding that premiums on policy were paid out of insured's army pay which was community property under law of insured's domicile, and judgment of state court to the contrary which also required that all future payments immediately upon receipt by beneficiary should be paid to insured's widow could not stand. 38 U.S.C.A. § 454a; National Service Life Insurance Act of 1940, § 602(g, i), 38 U.S.C.A. § 802(g, i).

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Mr. Carlos J. Badger, Modesto, Cal., for appellants.

Mr. Leslie A. Cleary, Modesto, Cal., for appellee.

Mr. Morton Hollander, Washington, D.C., for the United States, as amicus curiae, by special leave of Court.

Mr. Justice CLARK delivered the opinion of the Court.

We are to determine whether the California community property law, as applied in this case, conflicts with certain provisions of the National Service Life Insurance Act of 1940;¹ and if so, whether the federal law is consistent with the Fifth Amendment to the Constitution of the United States. The cause is here on appeal from the final judgment of a California District Court of Appeal, the Supreme Court of California having denied a hearing. Reading the opinion below as a decision that the federal statute was unconstitutional, we noted probable jurisdiction. 28 U.S.C. § 1257(1), 28 U.S.C.A. § 1257(1).

The material facts are not in dispute. Appellants are the parents, and appellee the widow, of Major Leonard O. Wissner, who died in India in 1945 in the service of the

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United States Army. He had enlisted in the Army in November 1942 and in January 1943 subscribed to a National Service Life Insurance policy in the principal sum of $10,000, which policy was in effect at the date of his death. The opinion below indicates that the decedent and appellee were estranged at the time he entered the Army or shortly thereafter. In January 1943 he requested his attorney to 'get an insurance policy away' from appellee. After six months in the service decedent stopped the allotment to his wife, and in September 1943 expressed the wish that he 'could find some way of forcing plaintiff to a settlement and a divorce.' It is not surprising, therefore, that, without the knowledge or consent of his wife, the Major named his mother principal and his father contingent beneficiary under his National Service Life Insurance policy. Since his death the United States Veterans' Administration has been paying his mother the proceeds of the policy in monthly installments.

In 1947 the Major's widow brought action against the appellants in the Superior Court for Stanislaus County, State of California, alleging that under California community property law she was entitled to one-half the proceeds of the policy. Appellants answered that their designation as beneficiaries was 'final and conclusive as against any claimed rights' of appellee. The court found that the decedent and his widow had been married in 1930, and until the date of Major Wissner's death had been legally domiciled there and subject to the state's community property laws. Major Wissner's army pay, which was held to be community property under California law,² was the source of the premiums paid on the policy.

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But no claim was made for the premiums; the widow sought the proceeds of the insurance. The court concluded that, consistent with California law in the ordinary insurance case, the proceeds of this policy 'were and are the community property' of the widow and the decedent, and entered judgment for appellee for one-half the amount of payments already received, plus interest, and required appellants to pay appellee one-half of all future payments 'immediately upon the receipt thereof' by appellees or either thereof. The District Court of Appeal affirmed, 1949, 89 Cal.App.2d 759, 201 P.2d 837, holding that appellee had a 'vested right' to the insurance proceeds, and the Supreme Court of California denied a hearing, one judge dissenting.

We are of the opinion that the decision below was incorrect. The National Service Life Insurance Act is the congressional mode of affording a uniform and comprehensive system of life insurance for members and veterans of the armed forces of the United States. A liberal policy toward the serviceman and his named beneficiary is everywhere evident in the comprehensive statutory plan. Premiums are very low and are waived during the insured's disability; costs of administration are borne by the United States; liabilities may be discharged out of congressional appropriations.

The controlling section of the Act provides that the insured 'shall have the right to designate the beneficiary or beneficiaries of the insurance (within a designated class), * * * and shall * * * at all times have the right to change the beneficiary or beneficiaries * * *.' 38 U.S.C. § 802(g), 38 U.S.C.A. § 802(g). Thus Congress has spoken with force and clarity in directing that the proceeds belong to the named beneficiary and no other. Pursuant to the congressional command, the Government contracted to pay the insurance to the insured's choice. He chose his mother. It is plain to us that the judgment of the lower court, as

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to one-half of the proceeds, substitutes the widow for the mother, who was the beneficiary Congress directed shall receive the insurance money. We do not share appellee's discovery of congressional purpose that widows in community property states participate in the payments under the policy, contrary to the express direction of the insured. Whether directed at the very money received from the Government or an equivalent amount, the judgment below nullifies the soldier's choice and frustrates the deliberate purpose of Congress. It cannot stand.

The judgment under review has a further deficiency so far as it ordered the diversion of future payments as soon as they are paid by the Government to the mother. At least in this respect, the very payments received under the policy are to be 'seized,' in effect, by the judgment below. This is in flat conflict with the exemption provision contained in 38 U.S.C. § 454a, 38 U.S.C.A. § 454a, made a part of this Act by 38 U.S.C. § 816, 38 U.S.C.A. § 816: Payments to the named beneficiary 'shall be exempt from the claims of creditors, and shall not be...