Ferneau v. Unckrich (45 Ohio App. 531, 1933)

Richards, J.

The original action was begun by E. C. Unckrich, as administrator with the will annexed of the estate of Frank D. Ferneau, deceased, for the purpose of having the court construe the will and determine the rights of the parties to the commuted value of certain war risk insurance paid by tbe United States government to the administrator of said deceased. Tbe trial court rendered a judgment and decree favorable to tbe contentions of Unckrich, administrator, plaintiff in that court, and from that judgment error is prosecuted.

A copy of the will of Prank D. Perneau is attached to tbe petition, and, after directing that bis debts be paid, it reads as follows: “2. After which 1“ will & bequeath to my brother S. W. Ferneau all money & personal property I possess.”

This will was duly probated on May 21,1919.

Tbe case was submitted to tbe trial court on an agreed statement of facts, from which it appears that Prank D. Perneau served during tbe World War as a soldier of tbe United States, and was insured under tbe War Risk Insurance Act of October 6, 1917 (40 Stats, at L., 409, Section 400 et seq.), in tbe sum of $10,000. He died on May 18,1919, having duly designated bis brother S. W. Perneau, as the beneficiary^ of tbe insurance. Prank D. Perneau never married, and never bad any children. He left surviving him as bis next of kin bis brother S. W. Perneau, a brother Otbo Perneau, a sister MinnieWilson, and Marjorie Ward, daughter and only child of a deceased sister. S. W. Perneau died on July 22, 1930, and left surviving bim a widow, Laura Perneau, and two children. After tbe death of Prank D. Ferneau, tbe monthly installments of war risk insurance were paid to S. W. Ferneau, the beneficiary of tbe insurance, until bis death. Soon after tbe death of S. W. Perneau the government paid tbe commuted value of tbe war risk insurance, amounting to $5,211.40, to tbe administrator de bonis non of the estate of Prank D. Perneau. This fund is claimed under tbe will of Frank D. Perneau by tbe administratrix of the estate of S. W. Perneau, and is claimed as intestate property by tbe surviving brother, sister, and niece of Prank D. Perneau.

This case involves the federal statute providing for war risk insurance and a construction of the will of Frank D. Ferneau, deceased. As originally enacted by Congress, the beneficiaries of war risk insurance were confined to certain permitted classes, specified in the statute. We think it clear, however, that no class had a vested right to the insurance, and it is settled that Congress had power to amend the statute and make the change retroactive. The statute, as amended March 4,1925 (Title 38, Section 514, U. S. Code), reads as follows: “If no person within the permitted class be designated as beneficiary for yearly renewable term insurance by the insured either in his lifetime or by his last will and testament or if the designated beneficiary does not survive the insured or survives the insured and dies prior to receiving all of the two hundred and forty installments or all such as are payable and applicable, there shall be paid to the estate of the insured the present value of the monthly installments thereafter payable, said value to be computed as of date of last payment made under any existing award: Provided, That all awards of yearly renewable term insurance which were in course of payment on March 4, 1925, shall continue until the death of the person receiving such payments, or until he forfeits same under the provisions of this chapter. When any person to whom such insurance was awarded prior to such date dies or forfeits his rights to such insurance then there shall be paid to the estate of the insured the present value of the remaining unpaid monthly installments of the insurance so awarded to such person: Provided further, That no award of yearly renewable term insurance made to the estate of a last surviving beneficiary prior to March 4, 1925, shall be affected by the foregoing provisions. In eases when the estate of an insured would escheat under the laws of the place of his residence the insurance shall not be paid to the estate but shall escheat to the United States and be credited to the military and naval insurance appropriation.' This section shall be deemed to be in effect as of October 6,1917.”

By its terms, the statute shall be deemed to be in effect as of October 6, 1917, a date prior to the death of Frank D. Ferneau.

This statute has been many times before the courts, and it has been determined that by its provisions the earlier rule which limited the benefit of the unpaid insurance to persons within certain designated classes has been abandoned by the present statute, and the estate of the insured substituted as the payee. Under this statute all unpaid insurance becomes assets of the estate of the insured upon his death, and, in the absence of a will, would, like other personal property, pass to-his heirs. As has been well said in Mason’s Administrator v. Mason’s Guardian, 239 Ky., 208, 39 S. W. (2d), 211: “This sum is a part of the personal estate of the soldier, it is payable to and is receivable by his personal representative, and, with the exception of not being subject to his debts, to be administered just like any other personal estate of the soldier * * *.”

It is apparent from the will of Frank D. Ferneau that it was his intention to bequeath to his brother S. W. Ferneau all the money and personal property which the testator possessed. The language manifestly includes his claim on the government for the war risk insurance, and he did not die intestate as to that. Upon the death of the soldier in 1919, the installments were payable to the designated beneficiary, S. W. Ferneau, during his life, and upon his death the commuted value would be payable to the soldier’s administrator for the benefit of the widow and children of the legatee, S. W. Ferneau.

A great many cases construing the war risk insurance statute have been determined by the courts, of which we cite only a few: Ogilvie’s Estate, 291 Pa., 326, 139 A., 826; Singleton v. Cheek, 284 U. S., 493, 52 S. Ct., 257, 76 L. Ed., 419, 81 A. L. R., 923; White v. United States, 270 U. S., 175, 46 S. Ct., 274, 70 L. Ed., 530; Gunn v. Yancey, 225 Mo. App., 1231, 33 S. W. (2d), 1029; Coleman v. Harrison, 168 Ga., 859, 149 S. E., 141; In re Estate of Tiffany, 137 Misc., 627, 244 N. Y. S., 255; In re Estate of Jones, 88 Colo., 386, 297 P., 990; Palmer v. Mitchell, Admr., 117 Ohio St., 87, 158 N. E., 187, 55 A. L. R., 566.

The trial court held that the administrator of the soldier should pay the amount of the fund remaining to the administratrix of S. W. Ferneau, deceased. That holding is correct, and the judgment will be affirmed.

Judgment affirmed.

Williams and Lloyd, JJ., concur.