Ringler v. Ringler

Offutt, J., delivered the opinion of the Court. The question raised by this appeal is a narrow one. On. April 10th, 1914, Sylvester K. Ringler of Cumberland, Maryland, became a member of the relief department of the Baltimore and Ohio- Railroad Company, which was organized and maintained for the purpose of providing benefit insurance for such of its employees as became members of the relief department.

He was twice married and bad two* children by his first wife, Thomas Ringler and Ruth R. Kempf, the appellants in this case, and five children by his second wife. In bis application for insurance he designated as beneficiaries bis wife Ida Ringler and his two children by his first wife, Ruth and .Thomas. He remained a member of the relief association, and the insurance continued in force, until his ²⁷² dearth, which occurred on July 22nd, 1927. But before his death, on that day, he signed a paper by which he attempted to change the beneficiaries named in his original application, which paper was in the following form: “I, Sylvester K. Ringler do hereby change the beneficiary of my insurance in B & 0 Relief from the present beneficiary to my wife Mrs. Ida Ringler.” After his death, relying upon that paper, Mrs. Ringler, his widow, notified the railroad company that she claimed the entire amount of the insurance, amounting to $2,500, due from it.

But the other two beneficiaries, Ruth and Thomas Ringler, also notified it that they each claimed one-tliird of that amount on the theory that, under the contract of insurance, the insured had not the power to change the beneficiaries named in his original application until and unless the change was approved by the superintendent of the relief department, and that the paper purporting to effect the change was never submitted to, or approved by, that official prior to the death of Ringler, and therefore never took effect. In that state of the case, the Baltimore and Ohio Railroad Company filed in the Circuit Court for Allegany County a bill of interpleader against the three claimants, praying that they be required fi> interplead, and adjust their several claims and demands among themselves, and a decree granting that relief was passed. In that decree it was directed that in the interpleader suit Ruth Ringler Kempf and Thomas Ringler should be plaintiffs and Ida Ringler defendant. Ruth Ringler Kempf and Thomas Ringler thereupon filed their bill of complaint against Ida Ringler, in which, after setting out certain of the facts to which we have referred, they charged that the “paper * * * purporting to be an application * * * for a change of beneficiaries” was not delivered to the agents of the Baltimore and Ohio Railroad Company until “many days” after the death of the insured, and that under the rules of that company it was absolutely null and void.

Mrs. Ringler answered that bill, and in paragraph five thereof alleged, among other facts, that she was married to the insured in 1900; that there were five children born of ²⁷³ that marriage, of whom four were living, the youngest being fourteen years of age; that one of them, as the result of an accident, was permanently injured; that she and her husband in 1923 bought a farm for $6,000, on which they paid $3,000 in cash and gave a mortgage for the balance, on which mortgage they had paid $800 at the time of Mr. Bingler’s death, and that these payments were made from their joint savings; that Bingler was at one time discharged from the employment of the Baltimore and Ohio Bailroad Company, and after his discharge he informed his wife that he would have nothing further to do with keeping tip the insurance, but that if she wanted to keep it up she could do so; that later there was an understanding between them that Bingler should, if possible, regain his position with the railroad company, and that she would manage the farm, watch over the education of the children, and establish a permanent home; that he was, largely through her efforts, reinstated with the railroad company; that she did manage the farm and watched over the education of their children, and that she did out oí a joint fund “make the payments necessary to keep the insurance from lapsing'’; that the paper purporting to change the beneficiaries in the insurance policy was signed voluntarily by the insured out of the presence of Mrs. Bingler, and witnessed by Dr. E. B. Claybrook and Dr. W. B. Erante, and that she had “reason to believe that the said Sylvester K. Bingler thought that he was dealing with one who had some official position with the B. & O. company in having the said Dr. Claybrook, who was a surgeon for the railroad company, as a witness. Plaintiffs excepted to that answer on the ground that the allegations of paragraph five thereof were irrelevant and immaterial, and also alleged in the same pleading facts which it was supposed established counter equities. The exceptions were overruled, and the case set for a hearing on hill and answer. The effect of setting up in the exceptions matters in avoidance, which were obviously intended to bo a replication to the answer, and afterwards setting the (!ase down on bill and answer, operated as a waiver of the exceptions (Miller s Equity Eroe., sec. 255), because a plaintiff ought not to be ²⁷⁴ permitted to assert that an answer is bad because it is impertinent, and at the same time set up> new and additional facts as a reply to it.

The effect of setting' the case down for a hearing on bill and answer was to admit all averments of fact in the answer, and to dispense with proof thereof, Miller s Equity Proc., see. 256, whether the averments were responsive or in avoidance (Ibid.); so that the facts to which we have referred must be taken as established. Upon those facts the trial court in a very elaborate and careful opinion decreed that the paper changing the beneficiaries under the contract of insurance between Ringler and the Baltimore and Ohio Railroad Company was valid and effective, and awarded the whole amount of such insurance to Ida Ringler the appellee. The appeal is from that decree. The single question presented by it is whether the paper wilting, dated July 22nd, 1927, by which the insured undertook to> change the beneficiaries originaly designated in his contract of insurance, ever took effect.

The determination of that question turns mainly upon the construction of clauses 18, 58 and 60 of the regulations of the relief department of the railroad company, which are in the following form: “18. The beneficiary or beneficiaries in any application for full membership, if the applicant is married, must be his wife or his wife and children. If he be single, the beneficiaries must be his father and mother or the survivor. No application will be accepted which does not comply with these requirements unless the superintendent waive the same for reasons satisfactory to him.

No one shall be entitled as the beneficiary of a member who is not the widow or a relation not more remote than a first cousin, except in case of the assignment to the superintendent of the natural death benefit to secure a loan from the Savings Eeature, or in case of the taking of special natural death benefit for that purpose.” “58. The benefits on account of the death of a member will be paid to the beneficiary designated in the ap ²⁷⁵ plication. If none such be living, the benefits shall lapse, and remain for the benefit of all the other members. The superintendent may, in such case, defray the expenses of the member’s funeral, so far as he deems proper.” “60.

Mo assignments of benefits or change of beneficiary will be permitted without the written consent of the superintendent, nor shall benefits be subject to attachment or other legal process.” and the following clause in the application which formed a part of the contract of insurance: “I also agree that the said company, by its proper agents and in the manner provided in said regulations, shall apply monthly in advance from the first wages earned by me under said employment, in each calendar month, sums at the rate of $5.00 per month as a contribution to the relief feature of said department, for the purpose of securing the benefits provided by said regulations, for a member of class E to myself or in the event of my death to my wife Ida and children by former marriage .Ruth and Thomas or the survivor or survivors or to whomever I may hereafter from time to time designate in writing by way of substitution, with the written consent of the superintendent; or, if no such beneficiary be then living, to my next of kin (as determined by the laws of the State of Maryland), in accordance with Regulation Mo. 18 — subject to all the provisions and requirements of said regulation.” In dealing with that question it may be assumed that the beneficiaries first named in the insurance contract had no vested interest therein, because not only was the privilege of changing the beneficiary so named reserved to the insured by the contract, but it was also secured by the regulations of the insurer. For while the contract and the regulations imposed certain limitations upon the exercise of that privilege, the beneficiaries had no control of any kind over it, and could not by any act of theirs prevent the insured from exercising it. 37 C. J. 578. But assuming that the insured had the right ²⁷⁶ to change the beneficiaries first named in the contract of insurance, the inquiry is, was that an absolute or a qualified right and did he ever actually exercise it ? It is conceded that the only thing he did to effect the change was to sign the paper in which he declared that he changed the beneficiary “from the present beneficiary to” his wife, Mrs. Ida Ringler.

That paper was addressed to nobody, it was not, during the lifetime of the insured, delivered to the insurer, and it was never approved by it, although it was executed when the insured was on his deathbed, and delivered to a nurse to be delivered to the insurer, and while not directed to the insurer was nevertheless intended for it. It was delivered to the insurer after the death of the insured, which must have occurred shortly after it was executed, but it never was approved by the superintendent of the relief department. It is also apparent that the insured intended to make the change, that he did all that he could to effect it, and that it was not acted upon by the insurer because it did not receive the paper until after the death of the insured. Upon these facts appellants contend that, whatever the intentions of the insured may have been, he did not in fact change the beneficiaries first named in the contract, because the paper purporting to make the change was never delivered io the superintendent of the relief department during the life of the insured, and was never approved by him, and that therefore the rights of the beneficiaries originally named became fixed at the death of the insured, and could not be affected by any subsequent act of the insurer.

The appellee on the other hand says that the approval of the superintendent was a mere ministerial act, involving the exercise of no discretion, that in signing the paper the insured had done all that he possibly could do to effect the change, and that equity will not permit his will to be frustrated because the death of the insured deprived the superintendent of any opportunity of doing that which he was bound to do if he had had the opportunity, and that it will treat the change as complete and effective. ²⁷⁷ There is a line of cases which holds that where, under the terms of such a contract as that here involved, a change of beneficiaries is not completed until the company has performed some purely ministerial act in respect thereto, and the insured has done all that he possibly could do to effect the change, but dies before it has been completed, that the fact that the company has not performed the act specified will not prevent the change from becoming effective. 45 C. J. 209, note 26. And whilst that rule cannot be said to have been universally accepted, it has been approved by this court. Daly v. Daly, 138 Md. 154 . It predicates two factors as essential to its operation: (1) that those things prescribed as essential to changing the beneficiaries named in the contract or policy of insurance, which at the death of the insured were incomplete or unperformed, were ministerial in character, and (2) that the insured had done all that he could do to effect the change.

Daly v. Daly, supra. In applying it to the facts of this case we are not affected by any principle of waiver dr estoppel, for while, in a controversy between the insured and a beneficiary, it has been held that the filing of the bill of interpleader may operate as a waiver of any defect in the claim of the beneficiary (37 C. J. 585), although there is authority to the contrary, (15 A. L. R. 1260, 2 A. L. R. 1680), the better view in our opinion is that it has no such effect in a controversy between beneficiaries claiming under different rights (Sullivan v. Maroney, 76 N. J. Eq. 104; Berg v. Damkoehler, 112 Wis. 587 ; Freund v. Freund, 218 Ill. 189 ), and that their respective rights under the contract or policy become fixed and vested at the death of the insured. 45 C. J., “Mutual Benefit Insurance ” sec. 167. The application of the exception is limited too by the principle that a mere unexecuted intent to make the change is not sufficient (45 C. J. 204), and in some jurisdictions by the principle that the