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GERSTENLAUER v. UNITED STATES

December 9, 1952

GERSTENLAUER
v.
UNITED STATES et al.



The opinion of the court was delivered by: BYERS

This cause, in which the Government is neutral as a stake-holder, involves the single question of whether one Lavin M. Andersen, who died December 9, 1945 while holding a commission in the United States Army as Major (M.C.), accomplished a change of beneficiary as to two $ 5,000 U.S. National Service Life Insurance policies in favor of his daughter, Mary Elizabeth, in place of his mother, Mary Josephine (who died August 30, 1946, her administrator being named as a defendant) as to Policy No. K678905, dated June 1, 1927; and of his wife, Lorna Alberta as to Policy No. K860637, dated April 1, 1929.

The complaint was filed November 1, 1947 by Andrew Portoghese as Trustee for the daughter, Mary Elizabeth, under a trust agreement to be explained, against the United States, Edward J. Andersen as Administrator of Mary Josephine, and the said Lorna Alberta.

 Since, then, Portoghese had died and his place has been taken by the plaintiff above-named, who became substituted trustee by order of the Supreme Court of the State of New York dated December 23,1949.

 The following facts were agreed to at the trial:

 Reliance is had by the plaintiff to establish the fact of a change of beneficiary, upon a trust agreement dated August 11, 1942, executed by the insured which in presently material respects provided:

 The insured is called the settlor and Portoghese is called the trustee, and the recital is of the issuance to the settlor of five identified life insurance policies by three named private companies, and two War Risk policies issued by the United States. As to the latter, the document reads:

 '6. United States Government Life Insurance Policy (sic) issued by the United States Government during the First World War in the aggregate sum of $ 10,000.00, bearing Nos. K860637 and K678905.

 'Second: (Embracing all policies.) That the 'Settlor' is desirous and unequivocally appoints one, Andre, Portoghese, Esq., herein called the 'Trustee' of all of the proceeds and benefits of the aforementioned numbered policies for the sole use and benefit of one, Mary Elizabeth Andersen, an infant daughter of the 'Settlor'.'

 That the insured is the physical possessor and owner of all said policies, except three which were issued by Northwestern Mutual etc. Company and which are now being held by representatives of that company. (It may be assumed that the insured had borrowed from the company on those policies.)

 'Fourth: That the 'Trustee' ask, demand, receive and collect any and all sums of money payable on the aforementioned numbered life insurance policies, or thereunder, upon the death of the 'Settlor', upon receiving proof of such death.

 'Fifth: That the 'Trustee' will hold and invest all monies so received and collected as a trust fund, and to pay over the net income from the said trust fund and so much of the principal thereof as the 'Trustee' in his uncontrolled and absolute discretion, may deem advisable in monthly installments to Mary Elizabeth Andersen, the daughter of the 'Settlor' during her lifetime.'

 If the daughter shall predecease the insured, the trust fund is to be transferred to and become part of his estate; the trust term seems to be the lifetime of the daughter, but, upon here attaining her thirty-fifth birthday, the principal and any accumulations of income are to be paid to her.

 The insured covenants with his trustee that he 'will pay any and all premiums assessments and other charges and perform any and all acts that may be necessary or desirable, in order to continue the life of the insurance policies in full force and effect.'

 Further, that the failure to deliver physical possession of the policies shall not invalidate the agreement 'and if there are any statutes of rules of law requiring the physical delivery of the said policies, then this 'Settlor' hereby specifically waives the provisions as applicable thereto.'

 The insured reserves the right to modify the terms of the agreement by a written instrument to be delivered by him to the trustee, and the latter accepts the trust upon specified terms, including:

 '(a) That it shall be no part of the duty of the 'Trustee' to see to any recording, registry, or filing of this agreement, or any supplemental agreement, or of any instrument ...


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