California-Western States Life Ins. Co. v. Kester

WOOD (Parker), J. In this action for declaratory relief, it was alleged in the complaint that a controversy existed between plaintiff and defendants as to which of the defendants was the beneficiary under a certain certificate that was issued in connection with a group policy of insurance. Plaintiff deposited in court, for payment to the beneficiary as determined by the court, the amount of the proceeds then due under the certificate; and plaintiff asked that the court determine which defendant was the beneficiary. Judgment was in favor of defendant Valerie Rae Kester, the daughter of the insured. Defendant Nellie May Kester, the mother of the insured, appeals from the judgment.

L. Ray Kester, the insured, was an employee of C. O. Sparks, Inc., and Mundo Engineering Company (herein referred to as employer). He died on October 29, 1951.

[478]Prior to January 4, 1951, Bankers Life Insurance Company issued its group policy of life insurance to the employer, covering the employees. In connection with the policy, that insurance company issued to L. Bay Kester its certificate which provided that the beneficiary was “Nellie M. Kester, mother, if living, otherwise to Valerie R. Kester, daughter.”

On January 4, 1951, the plaintiff California-Western Life Insurance Company became the carrier of group insurance for the employer in place of Bankers Life. On said date, plaintiff Calif ornia-Western issued its group policy of insurance to the employer; and in connection with the policy Calif ornia-Western issued to L. Ray Kester its certificate which provided that the beneficiary was “Valerie Kester, Daughter if living.”

Plaintiff California-Western, in preparing its certificates of insurance for the various employees, did not obtain new applications from the employees but did prepare the certificates from “dummy” applications which its employee, Mr. Biles, made from record cards of Bankers Life, which cards were in the office of the employer (Sparks-Mundo).

Mr. Biles, called as a witness by defendant Nellie Mae Kester, testified in part as follows: He is the supervisor of plaintiff’s Los Angeles group office. In December, 1950, he went to the office of the employer and looked at record cards in that office and at that time prepared records or new cards for California-Western. One of the cards of Bankers Life which he saw in the employer’s office showed the name of employee L. Ray Kester, and that card indicated: “Beneficiary, Nellie Mae if living, otherwise Valerie, daughter.” In filling out the new card of L. Ray Kester on the California-Western form, he inserted as beneficiary the name “Nellie Mae Kester,” and then next to the word “relationship” on the form he wrote the word “wife.” He did not talk to L. Rae Kester. On the same day that he made the new card and after he had had a discussion with the employer’s representative who was handling the group insurance, he changed some of the words on the new card that he had made. He crossed out the name “Nellie Mae” (leaving the last name “Kester”) and inserted the name “Valerie,” and changed the word “wife” to the word “daughter.” He did not have any written authorization from L. Ray Kester to so change the card. He made the change in the name of the beneficiary on the California-Western application on the basis of information furnished by an employee of Sparks-Mundo. The