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DRONEY v. UNITED STATES

March 12, 1945

DRONEY
v.
UNITED STATES (DRONEY, Intervener)



The opinion of the court was delivered by: LETTS

The plaintiff Jacqueline J. Droney brings this suit as the designated beneficiary of a contract of National Service Life Insurance, issued to Robert F. Droney on August 1, 1942, while in the military service of the United States.

 The intervener, Grace P. Droney, bases her claim to insurance benefits upon the contention that the purported change of beneficiary is ineffectual since plaintiff does not come within the permitted class of designated beneficiaries as defined by the National Service Life Insurance Act.

 The United States withholds payment of the insurance because of the conflict of interest between the plaintiff and the intervener and is ready to pay the insurance to the person adjudged by the court to be entitled to receive the same.

 Plaintiff and intervener have filed motions for summary judgment. These motions present the sole question for decision, which is one of law: whether or not a sister by adoption comes within the permitted class of designated beneficiaries as defined by the National Service Life Insurance Act.

 Section 601 of the National Service Life Insurance Act, as approved October 8, 1940, 54 Stat. 1008, 38 U.S.C.A. § 801, provides in subsection (e) that when used in part 1 of the act the term 'child' includes an adopted child.

 Section 602 of said Act, Sec. 802 of the United States Code Annotated, provides, on the subject of beneficiaries:

 '(g) The insurance shall be payable only to a widow, widower, child (including a stepchild or an illegitimate child if designated as beneficiary by the insured), parent (including person in loco parentis if designated as beneficiary by the insured), brother or sister of the insured. The insured shall have the right to designate the beneficiary or beneficiaries of the insurance, but only within the classes herein provided, and shall, subject to regulations, at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries but only within the classes herein provided.

 '(j) No installments of such insurance shall be paid to the heirs or legal representatives as such of the insured or of any beneficiary, and in the event that no person within the permitted class survives to receive the insurance or any part thereof no payment of the unpaid installments shall be made.'

 Section 601 of the Act of October 8, 1940, was amended by an Act approved July 11, 1942, 56 Stat. 659, 38 U.S.C.A. 801, by the addition of the following subsection: '(f) The terms 'parent', 'father', and 'mother' include a father, mother, father through adoption, mother through adoption, and persons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than one year.'

 The amendatory Act of July 11, 1942, struck out of section 602(g) dealing with beneficiaries the parenthetical words, following the word 'parent,' to wit, 'including person in loco parentis if designated as beneficiary by the insured.' Section 602(g) now reads: 'The insurance shall be payable only to a widow, widower, child (including a stepchild or an illegitimate child if designated as beneficiary by the insured), parent, brother or sister of the insured. * * * '

 It will be noted that in such provision only the term 'child' is enlarged beyond the natural and obvious meaning of the terms used to designate permissible beneficiaries.

 A different situation would be presented if plaintiff were claiming as beneficiary of insurance granted under the World War Veterans' Act of 1924 as amended since that act expressly defines the terms 'brother' and 'sister' as used in the statute as including 'brothers and sisters through adoption' as well as brothers and sisters of the half blood, stepbrothers and stepsisters, and the children of persons who stood in loco parentis to the insured. 38 U.S.C.A. § 424(6) and (7). It therefore seems clear that the terms 'brother' and 'sister' as used in section 602(g) of the National Service Life Insurance Act can only be held to apply to a natural or blood brother or sister of the insured. That such was the intent of Congress is more apparent from the fact that the National Service Life Insurance Act is much more restrictive in other respects than the World War Veterans' Act. This view is illustrated by the provisions in section 602(j) of the National Service Life Insurance Act; that 'No installments of such insurance shall be paid to the heirs or legal representatives as such of the insured or of any beneficiary, and in the event that no person within the permitted class survives to receive the insurance or any part thereof no payment of the unpaid installments shall be made.'

 It will be observed that the provisions of the War Risk Insurance and World War Veterans' Acts are much more liberal than the act ...


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