Ogilvie's Estate

Lester W. Ogilvie, a resident of Butler ounty, Pennsylvania, while a soldier in the World War, on Nov. 24, 1917, ade application in the usual form for War Risk Insurance under the provi-ons of an Act of Congress approved Oct. 6, 1917, 40 Stat. at L. 398. In the iplication he designated his father, F. S. Ogilvie, as beneficiary. On the *622same day and based upon his said application, the said soldier received a certificate of insurance issued by the War Risk Insurance Bureau in the sun of $10,000, payable in 240 monthly instalments of $57.50 each. The soldiei died Oct. 21, 1918, survived by his father but neither wife, child or grandchild. The monthly payments were made to his father until his death, Sept. 2 1920, and were thereafter made to the soldier’s grandmother, Hannah Ogilvie until her death, June 6, 1926. On Oct. 16, 1926, one Margaret Joy Houston not being of kin to the soldier, but alleged to have been his fiancee, probatec what purports to be a copy of the soldier’s last will and testament, upoi which probate letters testamentary were granted to her, she being the sol< legatee and the executrix mentioned in the will. Sometime after the letters were granted, the United States Veterans’ Bureau paid to her, as executrb of Lester W. Ogilvie, deceased, the present value of all unpaid month!? instalments on the War Risk Insurance certificate. She has filed her fina account showing a balance of said insurance fund in her hands at $6931.20 This fund is now before us for distribution. Said Margaret Joy Houston i¡ claiming it by virtue of the said will. "The next of kin of Lester W. Ogilvii are claiming it by virtue of the terms of the War Risk Insurance contrac and the intestate laws of Pennsylvania.

The War Risk Insurance contract under which this money was paid to th< executrix consists of the application made by the soldier for war risk insur anee, the certificate issued thereon by the War Risk Insurance Bureau, th War Risk Insurance Act and its amendments and the rules and regulation of the War Risk Insurance Bureau and its successor, the United States Vet erans’ Bureau. The application contains the following: “In case any bene fieiary should die or become disqualified after becoming entitled to an instal ment, but before receiving all instalments, the remaining instalments are t be paid to such person or persons within the permitted class of beneficiarle as may be designated in my last will, or, in the absence of such will, as woulc under the laws of my place of residence, be entitled to my personal propert; in case of intestacy.”

The certificate of insurance contains the following: “This insurance i granted under the authority of the Act approved October 6, 1917, and subjee in all respects to the provisions of such act or any amendments thereto an of all regulations thereunder now in force or hereafter adopted. All o which, together with the application for this insurance and the terms an conditions published under authority of the act, shall constitute the contract.

The Act of Oct. 6, 1917, authorized the War Risk Insurance Bureau t make and publish regulations not inconsistent with the act, and Bulleti No. 1, published under the authority of said act, is as follows: “If no ben< fieiary within the permitted class be designated by the insured, either in tbH insured’s lifetime or by his last will and testament, or if any designate* beneficiary does not survive the insured, or if any beneficiary shall survivB the insured but shall not receive all the instalments, then the remaining instalments shall be payable to such person or persons within the permitteH class of beneficiaries as would, under the laws of the insured's place of resH dence, be entitled to his personal property in case of intestacy.” H

The said Act of Oct. 6, 1917, contains the following provisions: “Thl insurance shall be payable in two hundred forty monthly instalments <H| $57.50 each, and shall be payable only to a spouse, child, grandchild, parenjB brother or sister. Subject to regulations, the insured shall at all times hawM the right to change beneficiaries without the consent of the beneficiaries, brH only within the class hereinafter permitted. If no beneficiaries within tlfll *623permitted class be designated by the insured, either in his lifetime or by his last will, or if the designated beneficiary does not survive the insured, the insurance shall be payable to such person or persons within the permitted class of beneficiaries as would, under the laws of the state of the residence of the insured, be entitled to his personal property in case of intestacy. If no such persons shall survive the insured, then there shall be paid to the estate of the insured an amount equal to the reserve value of the insurance at the time of his death. . . . The insurance shall not be assignable and shall not be subject to the claims of the creditors of the insured or of the beneficiaries.”

The above-quoted provisions are all part of the contract of insurance under which the money before us for distribution was paid. The Government is the insurer, not by way of conducting an insurance business, but for the sole purpose of protecting its service men and their dependents. This insurance contract has some of the features of a contract and some of the features of , pension. The Government, on account of its generosity, supervises and elects the parties who shall be protected. The whole scheme is declared in the act to be entered upon by the Government “in order to give every commissioned officer and enlisted man, and to every member of the Army Nurse Corps and of the Navy Nurse Corps, when employed in active service, protection for themselves and their dependents.”

The provision of the contract that is based upon the bulletin of the bureau was, by the amendment of Dec. 24, 1919, incorporated in the Act of Congress and the permitted class was enlarged so as to include uncles, aunts, nephews, nieces, brothers-in-law and sisters-in-law.

An Act of Congress approved June 7, 1924, 43 Stat. at L. 607, is entitled An act to consolidate, codify, revise and enact the laws affecting the United States Veterans’ Bureau and War Risk Insurance Act and the Vocational Rehabilitation Act.” This act retains all the terms and conditions of the ¡Var Risk Insurance Act, the application and certificate. This act was imended by the Act of March 4, 1926, 43 Stat. at L. 1302, which amendment retained the provisions against assignments and debts, the provisions estab-ishing the permitted class of beneficiaries, and the provision prohibiting the lesignation of a beneficiary outside of the permitted class, while allowing a change to be made, but does not retain the other terms of the contract in full, )ut provides that where no beneficiary is designated by the insured, either in fis lifetime or by his last will and testament, and that where a beneficiary vho has been receiving the instalment dies, the present value of the unpaid nstalments shall be paid to the insured’s estate. Neither by the contract of ¡nsurance nor by any Act of Congress has the insured been given any control iver the insurance money by will. The prohibition against assignment is ecessarily a prohibition against devising or bequeathing the fund. The only ower by will that the insured has is to designate beneficiaries. The insur-nce money is exempt from creditors of both the insured and his beneficiaries. Ihe insured has no power to divert it from the permitted class. The insur-.nce was intended to protect the insured and his dependents. There is no ndication in the Act of 1925 that the Government intended to relinquish its ontrol over the fund or to in any way waive or interfere with the protection fc had afforded to the permitted class; while, on the other hand, the act, by esignatjng a permitted class, by forbidding assignments and by restricting he selection of beneficiaries, shows a clear intent to maintain and continue be protection to the permitted class. The only logical conclusion that can be Irawn from an interpretation of the Act of 1924 and its amendments of 1925 *624is that the proceeds of such an insurance contract may only be paid to the next of kin within the permitted class so long as any survive. No person not in the permitted class is entitled to participate in the distribution of the fund if any of the permitted class remain. There is nothing in the act that indicates a change in policy. Protection to the soldier and dependents is the main thought. If Congress intended to throw down the bars and allow the insurance fund to go by will of the insured or to insured’s assignee or to the insured’s creditors in preference to the permitted class, we would expect that the act would contain such a provision in plain terms. If such were the intention, why would the act retain the permitted class? Why would it prohibit the assignment of the insurance money? Why protect it against the debts of the insured? Why would it prohibit the insured from designating a beneficiary outside of the class? The only logical answer is that no change was intended. Prior to the Act of 1925, the expense and annoyance of distribution by the Government was great. The purpose of the act seems to have been to relieve the bureau from the expense and annoyance in all cases where there was no beneficiary designated, and allow the distribution to ¡X made by the state courts, where the protection so clearly expressed in the act must be preserved and the permitted class recognized and protected. If the Act of 1925 pays the fund to the estate without restriction, the scheme of protection is lost and the fund would pass under the soldier’s assignments or by the provisions of his last will and testament, and it would be subject to all his debts and undertakings. A wife, child or parent dependent on him would receive no benefit whatever. Their protection would be wiped away Before we so construe the law, we should require the release to be expressed in plain and apt terms and not left to inference. Such a construction woulc violate the very purpose and spirit of the whole scheme of War Risk Insurance and must not be adopted so long as a fair and rational construction is available in harmony with the purpose and scheme of protection. To hole that the payments go to the estate for distribution under the terms and conditions of the insurance contract is to give force and effect to all the provi sions of the War Risk Insurance Act and the soldier’s contract thereundei and does not violate any of the express terms of the Act of 1925.

Having in view the spirit of the entire legislation on this subject, the term¡ of the contract as made up from the application, the certificate and the Act: of Congress, we are constrained to hold that the fund in controversy canno pass under the insured’s will, but must be distributed under the intestat laws of Pennsylvania to his next of kin, to the members of the permittei class.

In considering this case we have assumed that all Acts of Congress in fore at the present time and dealing with War Risk Insurance became part of th soldier’s contract; those enacted after his death as well as those before. Wi doubt very much whether this assumption is warranted and are inclined t the opinion that only the Act of Oct. 6, 1917, and the rules and regulation made thereunder by the War Risk Insurance Bureau could be part of th contract of insurance.

Order of court.

Now, July 12, 1927, the fund in the hands of the executrix, Margaret Jo Houston, being the proceeds of a War Risk Insurance contract, to wi' $6931.20, is hereby distributed as follows: To Myra McGonigle, $1732.80 to William P. Ogilvie, $1732.80; to Walter E. Ogilvie, $1732.80; to Charle T. Willmarth, $866.40; to Ida May Dieckman, $866.40.

From Thomas H. Greer, Butler, Pa.