Daly v. Daly

Thomas, J., delivered the opinion of the court. On or about the 15th of April, 1918, the Equitable Life Assurance Society of the United States, a body corporate of the State of Kew York, issued to the Standard Oil Company, of Kew Jersey, what is called a policy of “group insurance” on the lives of such employees of the Standard Oil Company, ¹⁵⁶ called the employer, “as are enumerated on the record known .as 'Insurance Register’ of the Standard Oil Company kept hy the society in the amounts set opposite their respective names, for the term of one year from the date hereof, or for such part of said term as they shall respectively remain in the employment of the employer,” and agreed, on receipt of due proof of death during said term of any such employee, to pay, at its office in the City of New York, the amount “for which such employee’s life is insured as aforesaid, to the beneficiary designated by such employee as; entitled to receive the same.” Among the provisions of said policy were the following: “Change of Beneficiary. “Any employee may from time to time during the continuance of this policy change the beneficiary by a written request (upon tbe society’s blank) filed at its home office, but such change shall take effect only upon the receipt of the request for change at the home office of the society. Ro assignment hy the employee of the insurance under this policy shall be valid.” “The Contract. “This policy, together with the employer’s application therefor, copy of which is attached hereto, an d the insurance register herein referred to, a copy of the form of which is attached hereto, shall constitute the entire contract between the-parties.” Some time in the summer of 1918, and after the latter part of July, Charles A. Daly, of Baltimore City, Maryland, who had been in the employ of the Standard Oil Company in Baltimore City as bookkeeper for several years, filled out and delivered to William R. Spear, of Baltimore City, who was the agent and employee of the Standard Oil Company in Baltimore City, and who had charge of the annuities, benefits and insurance department of that company, an application for insurance under the g^oup policy issued to that company by the said Assurance Society. Mr. Daly had for a ¹⁵⁷ year or more been engaged to Miss Helen C. McKenzie, of Baltimore City, and when he applied to Mr. Spear, whom he had known for a number of years! and who knew of his engagement to Miss McKenzie, for the insurance, he asked Mr. Spear if he could not name Miss McKenzie as the beneficiary of his insurance, and Mr. Spear told him that under “the schedule printed under the application” it would not be possible, the company would not permit it, “because the insurance was intended for the employee's dependents,” and a fiancee could not be considered a dependent, but after his marriage he could make the change, and that in the meantime he could name either his mother or father, who according to the schedule were the preferred beneficiaries under the company’s plan of insurance.

Mr. Daly accordingly named his father, Patrick Daly, of Wilmington, Delaware, as the beneficiary, and the following policy or certificate of insurance was issued by the Assurance Society and delivered to him by Mr. Spear: “The Equitable Life Assurance Society of the United States. “Ho. 5342425 — Insurance Amount for $1,140.00. “Hereby certifies that the Standard Oil Company (Hew Jersey) (hereinafter called the Employer) has contracted to insure the life of Charles A. Daly with The Equitable Life Assurance Society of the United States for the amount set forth in the Insurance Register kept by the society in connection with this group and ascertained in accordance with the Standard Oil Company’s life insurance plan stated on the second page hereof. The insurance is to be payable if death occurs while in the employment of said employer and during the continuance of the policy and subject to the terms and conditions thereof, as follows: $150 for funeral expenses and the remainder in twelve equal monthly payments to the beneficiary entitled thereunder to receive the same. * * * “Beneficiary — -Patrick, father. “Subject to the right of the employee, with the consent of the Employer, to change the beneficiary to any ¹⁵⁸ of the preference beneficiaries designated in the Standard Oil Company’s life insurance plan stated on the second page hereof and in accordance therewith, which change will be effective upon entry in said insurance register. If the beneficiary named as above does not survive the employee, the amount of the insurance will be payable to the first named beneficiary or class of beneficiaries designated in the Standard Oil Company’s life insurance plan stated on second page hereof, who shall survive all prior classes of designated beneficiaries. “Ho assignment of said insurance shall be valid. “This individual certificate is furnished in accordance with the terms of the Equitable Group Insurance Policy issued and delivered to said Employer, which policy with the Employer’s application therefor and the insurance register therein referred to constitute the entire contract between the parties. “W. A. Day, President. “Hew York, April 15th, 1918.” The plan of insurance referred to in the above certificate as printed on the second page thereof contains the following provision in regard to beneficiaries: “Schedule of Successive Classes of Preference Beneficiaries. “Beneficiaries are to be designated in accordance with the following schedule: “The Employee’s: 1. Widow or widower. 2.

Children in payments to be made to surviving parents and adult children as trustees for the equal benefit of the employee’s children. Should any child have died before the employee, his or her share shall be payable in equal parts to such child’s children then living. 3. Parents of the survivor of them. 4. Other blood relations, conceded by the Employer as being dependent upon the employee to at least 20% of his or her wages. “The employee may, with the written consent of the Employer, designate a beneficiary outside of the above four classes, in which event the amount of insurance ¹⁵⁹ shall be $500.

The Employer’s consent will not be given in any case where a person included in the first four classes above is dependent upon the employee to the extent of 20% of his or her wages.” There was also printed on the certificate the following statement of the Standard Oil Company: “Standard Oil Company, “(Incorporated in Yew Jersey) “Yew York. “Office of the President, “Yew York, April 15th, 1918. “To Employee named in attached certificate: “This certificate of life insurance is issued at the expense of the Standard Oil Company (Yew Jersey) in accordance with the provisions of its annuities and benefits plan. “Provision is made for the payment of a special sum in case of death from either sickness or accident, and payment on account of death by accident is independent of and supplemental to payment that may be made under the State Compensation Law. “Each employee is entitled to a copy of the pamphlet containing the annuities and benefits plan in detail, showing the provisions that have been made by the company for helping its employees and their dependents meet the financial contingencies that arise in times of sickness, accident, old age and death. “With hearty appreciation of your loyal co-operation, “On behalf of the Board of Directors, “Walter O. Tingh, President.” “Approved: A. O. Bedford, Chairman.” It appears from the evidence that Miss McKenzie had a policy of insurance on her life, and that she and Mr. Daly had agreed that she should make him the beneficiary in her policy, and that he should make her the beneficiary in his; that she had her policy written accordingly, and that when ¹⁶⁰ Mr. Daly got his certificate he gave it to her to keep and. told her the reason his father was named as beneficiary was because he was not then contributing to her support, but that as soon as they were married he would have it changed. They were married on the 3rd of September, 1918, and about a. week later, as soon as they returned from their wedding trip, he went to see Mr. Spear and asked him to' make the change in his certificate by making his wife the beneficiary. Mr. Spear testified that he could not make the change at that time because he had not received the blanks for changing beneficiaries from the New York office; that the company’s plan of insurance was practically new at that time and he had not received all the blanks', and that he told Mr. Daly that as soon as the blanks were received from the New1 York office he would give him one to fill out and sign; that the blanks were received sometime later, he could not tell just when, and that not having made a note of Mr. Daly’s request, he overlooked it, forgot it, and did not give him a blank; that he, witness, was very busy at that time and was working day and night trying to get all the employees insured before the first of the year, and was also1 busy helping to malee out war questionnaires, and that that was the reason he overlooked Mr. Daly’s request; that Mr. Daly was entitled to' have the beneficiary changed because' his status had changed; that the company requires an employee to change his beneficiary after’ he marries because under its plan of insurance the wife comes before the parents; that according to the usual course of procedure, if the employee makes the request for the change he, witness, fills out the blank, which is signed by the employee and by him, and forwarded to' the New York office, and the New York office forwards one copy of it to the Assurance Society and retains the other; that if the employee does not make the request, for the change, and the company finds out he is married, the company requires him to make the application in the manner stated, because according to its schedule the wife comes before other authorized beneficiaries; that the applications for change of beneficiary are put through ac ¹⁶¹ cording to the blanks signed by the employee and by him. Shortly after he applied to Mr. Spear to make the change in his certificate, Mr. Daly was! taken sick on the 5th of October, 1918, with the “flu” and double pneumonia, and he died on the 16th of that month without having received the blank from Mr. Spear.

After his death the Assurance Society, in accordance with the terms of the certificate, paid to Mrs. Daly $150 for funeral expenses, but as she and Patrick Daly, the father of the insured, both claimed and demanded the balance due under the certificate, the society filed in the Circuit Court of Baltimore City a bill of interpleader against them, and the court passed a decree requiring them to inter-plead, and the Assurance Society to pay into court to the credit of the cause the balance of said fund, amounting to $990, less a fee of $50 to its counsel. After a hearing upon the pleadings and evidence adduced by the parties, the court below passed a decree directing the clerk of the court to pay said sum of $990, less the fee of $50 referred to, and the cost of the proceedings, to Patrick Daly, the father of the deceased, and from that decree Mrs. Daly has brought this appeal. Where the certificate or policy of insurance issued to the insured expressly reserves to him the right to* change the beneficiary named therein, whatever interest the beneficiary has in the certificate or policy is subject to that right of the insured, and where the contract of insurance, or, in case of benefit societies, the policy, constitution or by-láws of the association prescribe the manner in which the change of beneficiary shall be made; such requirements must be followed by the insured in order to> effect the change desired. These principles are generally recognized and are in accordance with the decisions in this State. 14 R. C. L., see. 545, p. 1376 and sec. 555, p. 1390; Supreme Conclave, Royal Adelphia v. Cappella, 41 Fed. Rep. 1; Berkeley v. Harper, 3 App. D. C. 308; Thomas v. Cochran, 89 Md. 390 ; Dale v. Brumbly, 96 Md. 674 ; Fitzgerald v. Balto.

L. Ins. Co., 133 Md. 619 . ¹⁶² It is said, however, in Supreme Conclave, Royal Adelphia v. Capella, supra, which is regarded as a leading case on the subject, that there are three exceptions to the general rule requiring exact compliance with the regulations in regard to the manner in which a change of beneficiary shall be made: “First — If the society has waived a strict compliance with its own rules, and, in pursuance of a request of the insured to change his beneficiary, has issued a new certificate to him, the original beneficiary will not be heard to complain that the course indicated by the regulations was not pursued. Second — If it be beyond the power of the insured to comply literally with the regulations, a, court of equity will treat the change as having been legally made. Third- — -If the insured has pursued the course pointed out by the laws of the association, and has done all in his power to change the beneficiary, but, before the new