Opinion
32846.
DECIDED MAY 30, 1950.
Trover; from Polk Superior Court — Judge Tison presiding. October 22, 1949.
Cecil D. Franklin, for plaintiff in error.
W. W. Mundy Jr., Arnold, Gambrell Arnold, contra.
The evidence authorized the verdict and the court did not err in overruling the motion for a new trial based solely on the usual general grounds.
DECIDED MAY 30, 1950.
Mrs. Evelyn B. Pope (formerly Mrs. Evelyn M. Baker, wife of John B. Baker, deceased) brought an action in trover against Cecil D. Franklin, administrator of the estate of John B. Baker and against the Rockmart Bank to recover thirty-nine United States Saving Bonds, series E, having a cash value of $1,134.75. The bank entered a plea of disclaimer and upon depositing the bonds in court was discharged and relieved from all liability. No exception was taken to this action. The administrator admitted his refusal to deliver the bonds and gave as his reason for such refusal that the plaintiff and her husband were on January 16, 1945, living in a bona fide state of separation and a divorce suit brought by the plaintiff was then pending on that date in the Superior Court of Polk County and that upon the trial of such divorce case the plaintiff was granted a total divorce from John B. Baker; and on January 16, 1945, a valid contract was entered into between Mrs. Evelyn M. Baker and John B. Baker wherein Mrs. Baker accepted from Mr. Baker the sum of $500 and certain personal property in lieu of alimony, support, right or dower, or year's support; and the defendant administrator asserted that the plaintiff by virtue of such contract has no interest or equity in any of the bonds in question. The case was submitted to the court without a jury upon a stipulated statement of the evidence. The material portions of the stipulation are as follows: ". . the bonds listed in the petition of the plaintiff were all purchased in 1942 and 1943 and were in existence at the time of the separation and divorce . . John B. Baker died August 24, 1947 and . . Cecil D. Franklin is the duly constituted administrator of the estate . . Mrs. Evelyn M. Baker and Mrs. Evelyn Baker Pope are one and the same person. . . All the bonds listed in the petition are issued in the name of John Baker, payable on death to Mrs. Evelyn M. Baker, beneficiary, or in the name of John Baker, P.O.D. Mrs. Evelyn M. Baker, the initials `P.O.D.' standing for `payable on death' in the ordinary usage in writing of bonds, and that bond No. L-49639609-E is issued in the name of John Baker or Mrs. Evelyn Baker and that bond No. Q-136388643-E is issued to John Baker or Mrs. Evelyn Baker. It is further stipulated that the last two mentioned bonds were in the possession of the Rockmart Bank and are submitted to the court, but are not listed in the petition but are included in the suit as a part of the bonds involved in this action. It is agreed that the judgment in the case will include the last two named bonds. There are 36 Q bonds of the maturity value of $25 each, four C bonds of the maturity value of $100 each, and one L bond of the value of $50." The following agreement was also included in the stipulation: "This agreement made and entered into on this the 16th day of January, 1945, between John B. Baker, on the one part, and Mrs. Evelyn M. Baker, of the other part. Whereas, the parties hereto are husband and wife and are now living separate and apart from each other and their separation is final and whereas, the wife has brought suit for alimony and divorce against the husband which is now pending in the Superior Court of Polk County, Georgia, and whereas, both parties are desirous of settling all question of alimony and support of the wife from the income and estate of the husband, now, therefore, in consideration of the said wife releasing the husband from all present or future claim for alimony and support, right of dower, or year's support, the husband agrees to give the said wife upon the execution and delivery of this agreement . . [a list of the property to be given] This said settlement of alimony is hereby accepted by the wife as a full release and quittance of any and all liability, present and future, insofar as any alimony or property adjustment between them is concerned, and the said wife hereby specifically waives and renounces any right of dower or year's support in the estate of the husband. The said wife hereby agrees to keep the said husband indemnified against all debts and liabilities which the said wife may hereafter make or contract for the support of herself. As a further consideration the said wife does hereby agree to strike from her petition in the case now pending against the husband all claim and prayer for temporary and permanent alimony." This agreement was signed, sealed and delivered by the parties. A check signed by J. B. Baker, payable to and endorsed by Mrs. Evelyn M. Baker was also part of the evidence under the stipulation. It was further stipulated that: "Two concurring verdicts favoring a total divorce for plaintiff having been rendered in the above stated case, it considered and adjudged that said marriage be and the same is hereby annulled, a total divorce rendered between the parties with liberty to the plaintiff. Mrs. Willie Evelyn Mears Baker, to marry again and with the same liberty to the defendant, John B. Baker. Plaintiff's name is hereby restored, to wit: Willie Evelyn Mears. Ordered further that the defendant, John B. Baker, pay the cost of this case . . This 27th day of Feb., 1945. /s/ Wm. W. Mundy. J.S.C.T.C." It appears also in the stipulation: "The divorce suit was based on cruel treatment and showed that the plaintiff and defendant lived together as husband and wife from the 17th day of August, 1940, until the 19th day of May, 1944, and that on June 3, 1944, plaintiff filed suit for divorce and alimony. The petition had attached to it two schedules of property — one, showing the property of the wife. . and the other schedule being a schedule of the property of the husband. . . All of the bonds referred to in the stipulation, hereinbefore quoted, and in the petition are in the same language insofar as the conditions, except as to the differences pointed out in the stipulations as to the payee [The two bonds not listed in the petition]. . . On the face of each instrument is contained the following language: `The United States of America for value received promises to pay to (and here is named the payee) Twenty-five Dollars without interest, ten years from the date as of which this bond is issued. This bond is redeemable at the option of the owner during any period after said issue date (but not within the first sixty days) in an amount equal to its redemption value during that period as showing by the following Table of Redemption Values . . `This is a United States Savings Bond of Series E, authorized by the second Liberty Bond Act, as amended, and issued pursuant to Treasury Department Circular No. 653, Revised, dated June 1, 1942, to which reference is made for a statement of the rights of holders, as fully and with the same effect as though herein set forth. This bond is not transferable; and, except as provided under said circular, it is payable, at maturity or earlier redemption, only to the registered owner and upon presentation and surrender of this bond with the request for payment on the back hereof duly executed, all in accordance with the provisions of said circular and the regulations prescribed from time to time thereunder. This bond shall be valid only if inscribed with the owner's name and address, dated the first day of the month in which the issue price is received, and duly delivered by an authorized issuing agent. The amount of United States Savings Bonds of Series E, of any designation, originally issued in any one calendar year to any one person, including bonds registered in his name alone or with another as co-owner, that may be held by that person at any time shall not exceed ($5000) maturity value . .' Two of the bonds [mentioned above] are not itemized in the petition, but are included among the bonds for which this action was brought. There are four C bonds and one L bond. The series C and series L bonds are substantially in the same language (as E bonds) except as to amounts and rates of interest. . . Plaintiff introduced as evidence sub-section b of Section 315.32, together with Section 315.36, from Regulations Governing United States Savings Bonds circular 530 Fifth Revision, dated June 1st, 1942, which reads as follows: Section 315.32 (b) `If either co-owner dies without having presented and surrendered the bond for payment to a Federal Reserve Bank or the Treasury Department, the surviving co-owner will be recognized as the sole and absolute owner of the bond and payment will be made only to him.' Section 315.36 (b) `If the registered owner dies without having presented and surrendered the bond for payment or authorized reissue to a Federal Reserve Bank or the Treasury Department, and is survived by the beneficiary, upon proof of such death and survivorship, the beneficiary will be recognized as the sole and absolute owner of the bond, and it will be paid only to him, or may be reissued in his name alone, or otherwise reissued in accordance with sub-part J as though it were registered in his name alone: Provided however, that if the bond with a properly executed request by the registered owner for payment or authorized reissue has actually been received by a Federal Reserve Bank of the Treasury Department, payment of the bond, or check, if one has been issued, will be made to the estate of the deceased owner in accordance with Sec. 315. 49.'" The judge, sitting as court and jury, found in favor of the plaintiff. The defendant moved for a new trial on the usual general grounds. The motion was overruled and the defendant excepted.
It appears from the evidence stipulated that all of the bonds for which the plaintiff brought her action of trover were purchased during the years of 1942 and 1943 by John B. Baker, who was at that time the lawful husband of the plaintiff. The plaintiff was designated in each of the bonds as the beneficiary to whom payment was to be made upon the death of Baker. Two of the bonds, which were included in the case by stipulation, were purchased by Baker during the same period of time as the other bonds and were registered in the names of Baker and the plaintiff, as co-owners. Each of he bonds provided that it was issued "pursuant to Treasury Department Circular No. 653, Revised, dated June 1, 1942, to which reference is made for a statement of the rights of holders, as fully and with the same effect as herein set forth." The pertinent provisions of that circular, as amended, and as codified in the Code of Federal Regulations of the United States (1945 Supp.), are: "§ 315.46 Payment or reissue. A savings bond registered in the name of one person payable on death to another . . will be paid or reissued as follows: (a) Payment to the registered owner. The bond will be paid to the registered owner during his lifetime upon his properly executed request as though no beneficiary had been named in the registrations. . .
(2) The bond will also be reissued upon the duly certified request of the registered owner, together with the duly certified consent of the designated beneficiary, to eliminate such beneficiary, or to substitute another person as beneficiary, or to name another person as co-owner. . . (c) If the registered owner dies without having presented and surrendered the bond for payment or authorized reissue and is survived by the beneficiary, upon proof of such death and survivorship, the beneficiary will be recognized as the sole and absolute owner of the bond, and payment or reissue, as though the bond were registered in his name alone, will be made to such survivor. . . § 315.45 Payment or reissue. A savings bond registered in the names of two persons as co-owners. . . will be paid or reissued to either as follows: (a) Payment during the lives of both co-owners. During the lives of both co-owners the bond will be paid to either co-owner upon his separate request without out requiring the signature of the other co-owner; and upon payment to either co-owner the other person shall cease to have any interest in the bond. The bond will also be paid to both co-owners upon their joint request. . . (c) Payment or reissue after the death of one co-owner. If either co-owner dies without the bond having been presented and surrendered for payment or authorized reissue, the surviving co-owner will be recognized as the sole and absolute owner of the bond and or reissue, as though the bond were registered in his name alone, will be made only to such survivor. ." By the express terms of the bonds and the regulations under which they were issued, the plaintiff is the sole owner of the bonds in which she was designated the beneficiary and is also the sole owner of the bonds in which she was designated co-owner, after the death of her husband, where the bonds have not been reissued or paid prior to the husband's death. See Knight v. Wingate, 205 Ga. 133 ( 52 S.E.2d 604). In the Knight case the Supreme Court held that by virtue of the contractual relationship between the Federal government and the owner of the bonds, which was created upon the issuance of the bonds, the Federal government assumed a duty to each of the co-owners (and the same would be true as to a beneficiary) to pay the proceeds thereof to such co-owners (or beneficiary) according to the terms of that contract, one of the terms thereof being that when the owner of the bond died and the co-owner (or beneficiary) survived him, the full proceeds of the bonds would be paid to the co-owner (or beneficiary). Under that ruling the co-owner (or beneficiary) is held to be entitled to the bonds by virtue of the contractual relationship between the owner and the government on the theory of the rights of third parties beneficiary under Code, § 20-306. The defendant, however, defends in this action of trover upon the ground that while the holding in the Knight case may be correct, the plaintiff in this case disposed of her interest as a third party beneficiary in the bonds when she entered into the property settlement contract with Baker prior to the divorce of the two. The material provision of the contract is: "This said settlement of alimony is hereby accepted by the wife as a full release and quittance of any and all liability, present and future, insofar as any alimony or property adjustment between them is concerned, and the said wife specifically waives and renounces any right of dower or year's support in the estate of the husband." This provision of the contract clearly extinguished any and all claims of the plaintiff against the estate of her husband which arose by virtue of the marital relationship. Her interest, as beneficiary, in the bonds is in no way dependent upon her marital status, or upon her status as an heir-at-law of her husband prior to her divorce. Her interest arises by virtue of the contractual relationship between the husband and the Federal government. The husband is presumed to know upon what conditions and terms the bonds would be paid in the event of his predeceasing the named beneficiary. he took no steps to cash the bonds, or to have the beneficiary changed, and no mention of the bonds is made in the property settlement agreement. While it is true he had complete dominion and control of the bonds prior to his death, and the bonds, during that time, constituted an asset of his estate, and the plaintiff's interest during his life was only a defeasible contingent interest, the moment of his death, the plaintiff's interest became an absolute indefeasible interest and just as the proceeds of an insurance policy, payable to a named beneficiary, becomes no part of the deceased insured's estate, but are the property of the beneficiary, the bonds or proceeds from them, became the property of the plaintiff beneficiary in this case. See Loyd v. Loyd, 203 Ga. 775 ( 48 S.E.2d 365); Bennett v. Rosborough, 155 Ga. 265 ( 116 S.E. 788); Pate v. Citizens Southern National Bank, 203 Ga. 442 ( 47 S.E.2d 277).
For the reasons stated above, the evidence authorized the verdict and the court did not err in overruling the motion for a new trial.
Judgment affirmed. Gardner and Townsend, JJ., concur.