The opinion of the court was delivered by: John E. Miller, Chief Judge.
This is an action by the plaintiff, James E. Smith,
individually and as Administrator of the Estate of Maude Spain
Smith, deceased, to recover the installment benefits of a
National Service Life Insurance policy under 38 U.S.C. § 784.
Plaintiff commenced this action on May 11, 1963, to recover the
installment benefits of one-half of a $10,000 National Service
Life Insurance policy, No. 39234003, issued on the life of
Cecil H. Smith. The defendant United States answered August 16,
1963, asserting that the insurance benefits in question are
payable to defendant Roberta M. Smith, the minor daughter of
the deceased insured and the surviving co-beneficiary. On
August 16, 1963, the defendant United States filed a motion in
which it asked that a guardian ad litem be appointed for the
minor, Roberta M. Smith, and on August 17, 1963, the court
entered an order appointing Bertha M. Ritchie, mother and
custodian of Roberta M. Smith, the guardian ad litem.
On September 23, 1963, the defendant Roberta M. Smith filed
an answer by and through her guardian, Bertha M. Ritchie,
which contained a cross claim against the defendant United
States for the benefits of said policy. The defendant United
States on October 7, 1963, filed its answer to the cross claim
of the defendant Roberta M. Smith.
The plaintiff, James E. Smith, on January 21, 1964, filed a
motion for summary judgment. On January 31, 1964, the
defendant Roberta M. Smith, through her guardian, Bertha M.
Ritchie, filed a response to the motion of plaintiff for
summary judgment, together with a motion for summary judgment
on behalf of the defendant Roberta M. Smith. On February 12,
1964, the defendant United States filed a motion for summary
The plaintiff, James E. Smith, a citizen of the State of
Arkansas and a resident of Lincoln, Arkansas, was the father
of the insured, Cecil H. Smith. Maude Spain Smith, mother of
the insured, died in Washington County, Arkansas, January 10,
1963. Defendant Roberta M. Smith, daughter of the insured,
lives with her mother and guardian, Bertha M. Ritchie, a
citizen of the State of California and resident of Sacramento.
On January 24, 1956, the insured, Cecil H. Smith, executed
VA Form 9-336, designating Maude Spain Smith, mother, and his
daughter, Roberta M. Smith, as principal beneficiaries "in
equal shares with right of survivorship, Option #2, 36
months." The insured's father, James E. Smith, plaintiff
herein, was designated "contingent beneficiary" for the full
amount of the policy to be paid under settlement Option #2 in
36 equal monthly installments.
The insured's mother, Maude Spain Smith, made her claim for
benefits under the policy after the death of the insured
December 4, 1962. Subsequent to the filing of Maude Spain
Smith's claim for benefits, she died January 10, 1963, prior
to the payment to her of any installment payments. The
contingent beneficiary, James E. Smith, the insured's father,
made claim for one-half of the total benefits which was
disallowed on February 25, 1963, and again disallowed on April
Plaintiff, James E. Smith, the contingent beneficiary,
contends that "on the death of the insured [Cecil H. Smith],
Maude Spain Smith became the owner of one-half of the total
benefits under said policy amounting to $5,000, and on her
death the plaintiff, James E. Smith, became the owner thereof
as contingent beneficiary or said sum became an asset of her
Defendant Roberta M. Smith contends that as "the surviving
principal beneficiary," she became entitled to the entire
installment benefit payments upon the death of the other
principal beneficiary, Maude Spain Smith.
The defendant United States contends that the plaintiff,
James E. Smith, is not entitled, either individually or as
administrator of the estate of Maude Spain Smith, to the
installment benefits of the deceased principal beneficiary,
Maude Spain Smith, and asserts that the "surviving principal
beneficiary" is entitled to installment benefits of the
deceased co-principal beneficiary.
National Service Life Insurance policies are contracts with
the United States, and their terms are governed by federal
statutes and regulations is determining who is to share in the
benefits arising from such policies. See, Wissner v. Wissner,
338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424 (1950); Pack v.
United States, (9 Cir. 1949) 176 F.2d 770.
Section 602(u) of the National Service Life Insurance Act,
38 U.S.C.A. § 802(u), provides that when a designated
beneficiary not entitled to a lump-sum settlement dies before
receiving all the benefits due and payable, the remaining
unpaid insurance (whether accrued or not) shall be paid in one
sum to the "estate of the insured." The Veterans Administration
in its regulations construes beneficiary to include contingent
as well as principal beneficiaries.
In United States v. Short, (9 Cir. 1956) 240 F.2d 292, the
court, in construing Sec. 602(u), supra, at page 296 said:
"The word `beneficiary' is used in the statute in
the singular. We hold that the phrase `designated
beneficiary' includes contingent as well as
principal beneficiaries. This is the construction
which has been followed by the Veterans
Administration since the enactment of the
statute, Regulations, Sec. 10:3489, 11 F.R. 9285,
38 C.F.R. § 10:3489 (Supp. 1946) 38 C.F.R. § 8.89
(1949). The trial court herein also so held.
Washburn v. United States, D.C.Mo. 1945,