The opinion of the court was delivered by: GOURLEY
The defendant Della Josephine Reich is a citizen and resident of Akron, Ohio. The defendant William P. Reich is a citizen and resident of the Borough of West Bridgewater in the Western District of Pennsylvania.
The complainant has paid into the registry of this Court the proceeds of a certain life insurance policy to which the defendants have asserted claims. The life insurance contract, No. 280,761, was executed and delivered to Leonard A. Reich, the insured, providing, inter alia, for the payment of $ 1,000 upon due proofs of death of the insured. The beneficiary named in the original contract was Matilda E. Reich, with right of revocation. On April 13, 1931, the said Leonard A. Reich, in accordance with the provisions of the contract relating to change of beneficiary, named Della Josephine Reich, his wife, if living at his death, as payee or beneficiary, and if not then living, Kathleen Reich, the daughter of the insured, if living, reserving again the right of revocation.
The insured, Leonard A. Reich, died on June 7, 1942. The amount payable under the provisions of said policy, including the dividends, was $ 1,241.36. The Court by previous Order has directed the payment of certain costs and attorneys' fees in connection with the filing of said complaint, so that the balance now remaining in the registry of said Court is $ 1,083.44.
Della Josephine Reich and Leonard A. Reich were married on June 1, 1926. They resided together without marital difficulties of a serious nature until December 6, 1939, on which date Leonard A. Reich filed a libel in divorce in the Court of Common Pleas of Beaver County, Pennsylvania. On January 3, 1941, a Master was appointed to hear said divorce proceeding, but due to the illness and resulting death of Leonard A. Reich on June 7, 1942, the divorce proceeding was not adjudicated.
Subsequent to the death of Leonard A. Reich on June 7, 1942, two adverse claims were made against the Phoenix Mutual Life Insurance Company for the proceeds of said policy:
(a) The claim of Della Josephine Reich was based on an absolute assignment made to her by Leonard A. Reich during the late spring or early summer of 1931 of all his right, title, interest, claim and ownership in and to said policy.
(b) The claim of William P. Reich was based on a change of beneficiary executed by Leonard A. Reich in his behalf on the 9th day of July, 1941.
In an interpleader action each defendant or claimant, after the interpleader is awarded and it is directed that an issue be framed, occupies the position of the plaintiff. Each must state his claim and answer that of the other so that issue between them is joined. It does not matter which one of the claimants or the defendants is designated as the plaintiff since each must establish his own claim by the fair preponderance of the evidence. Equitable Life Assur. Soc. of U.S. v. Kit, et al., D.C., 22 F.Supp. 1022; 33 C.J. 459, 48 C.J.S.Interpleader § 35; Cyclopedia of Federal Prodcedure, 2nd Edition, Vol. 6, Para. 2222.
In the first instance whether the claim of Della Josephine Reich to the proceeds of the policy on the basis of an assignment, or the claim of William P. Reich as designated beneficiary, is accepted by the Court, neither claimant complied with the terms and provisions of the insurance contract. As to assignments, the policy provides:
'The Company assumes no responsibility for the validity of any assignment, and shall not be held to have notice of any assignment of this policy until the original assignment, or a copy thereof, is received at the Home Office of the Company while this policy, or any extended term insurance guaranteed hereunder, is in force according to the Company's records; all assignments shall be subject to any interest the Company may have in this policy.
As to change of beneficiary, the policy provides:
'It is understood and agreed by all parties that may be interested herein: That the Insured, if there is no outstanding assignment of this policy, made as herein provided, in which the Insured has joined, may, whenever and as often as he desires, change any Payee then last named under this policy and designate a new Payee, with right of revocation, by an endorsement of such change on or by a writing to be attached to this policy, substantially in the form indorsed hereon, provided, however, that any such desired change shall not take effect unless nor until said endorsement or 'writing,' duly executed by the Insured, together with this policy shall be received at the Home Office of the Company for record while this policy, or any extended term insurance guaranteed hereunder, is in force according to the Company's records.'
Testimony was offered by the claimant Della Josephine Reich that in 1931 certain repairs and improvements were made to the home which was occupied by the parties, and, in connection therewith, Leonard A. Reich experienced difficulty in making payment of the costs incident thereto. That Della Josephine Reich had financial resources of her own in the approximate amount of $ 1100, which funds had been secured through the settlement of an automobile accident in which she had been involved. That during the late spring or early summer of 1931 the parties consulted a member of the Bar in Beaver County, Pennsylvania, by the name of Joseph Knox Stone. That the circumstances were explained and Attorney Stone suggested that if it were the desire of Della Josephine Reich to advance the necessary funds to meet the expenses incurred, deeds could be drawn in order that title to the real estate would be placed in the names of the parties as tenants by the entireties. At first impression this seemed satisfactory, and the deeds were so drawn; but when the parties returned a short time thereafter, Leonard A. Reich stated that since he had inherited the property and for sentimental reasons it was not desired by him to place the title in both names. As a result thereof, it was agreed that Leonard A. Reich should execute an assignment of all his right, title, interest, claim and ownership in and to said policy to Della Josephine Reich, which assignment was to remain in full force and legal effect until such time as Leonard A. Reich would repay to Della Josephine Reich the advancements which she would make in approximate amount of $ 1,000 for the costs incurred in the repair and improvement of said property. That this was satisfactory to the parties and, as a result thereof, Attorney Stone prepared an assignment in triplicate. Two copies of the assignment were attached to the policy in order that the insurance company would have a copy for its files and a copy could remain permanently with the policy, and a copy was retained by Attorney Stone. That the attachments were made with a paper clip, Attorney Stone witnessed the assignment, and it was the understanding of the parties that Leonard A. Reich would forward the insurance policy to the insurance company for proper attention. After the serious domestic differences arose in 1939, Della Josephine Reich observed that her husband had looked at the policy, which had been kept in a dresser at their home, and that the assignment was missing from the policy. That as a result thereof, the policy was taken by Della Josephine Reich and kept in her possession, or that of a friend, until after this litigation arose. That in June of 1939, Della Josephine Reich communicated with the insurance company and advised that she had a claim to the proceeds of the policy and that no payments of any nature were to be made to Leonard A. Reich, or a new policy issued without her knowledge or consent.
On the basis of the above set of facts, Della Josephine Reich contends that although the assignment was never forwarded to the insurance company and accepted, a just legal claim exists to the proceeds and dividends standing to the credit of said policy.
Testimony was offered by William P. Reich in support of his claim that an absolute assignment was never executed by Leonard A. Reich during the late spring or summer of 1931, or at any other time. That after the death of the mother of Leonard A. Reich, who was the original beneficiary of said insurance contract, which was issued by the company on January 8, 1913, Leonard A. Reich executed a change in beneficiary on April 8, 1931, which was accepted on April 13, 1931, in which Della Josephine Reich was made the primary beneficiary and Kathleen Reich, a step-daughter, was made the secondary beneficiary. That subsequent to the marriage of the parties, Leonard A. Reich purchased a parcel of ground and constructed the dwelling where the parties resided. That repairs and improvements were made to the dwelling and funds of Della Josephine Reich were used in connection therewith. That Leonard A. Reich changed the beneficiary in said policy to his wife in April of 1931 in order to protect his wife for the moneys which she had invested in the said property, and, in addition thereto, placed in her possession bank books of two separate accounts together with a policy in another company. That subsequent to the filing of the divorce proceeding on December 6, 1939, hearings were held before the Court of Common Pleas of Beaver County in connection with the obligation of Leonard A. Reich to make payment of the necessary legal expenses to defend the action and for the payment of alimony pendente lite. That during these hearings Leonard A. Reich maintained the position that his wife, without the knowledge or consent of her husband, took possession of certain articles of personal property, among which was the life insurance contract in question. That Della Josephine Reich during said litigation admitted that it had been agreed that she would hold said items of personal property, together with the life insurance policy in question, until the advancements which were made by her for the repair and improvement of the home would be repaid. That Della Josephine Reich relied upon the statement of her husband that it would not be necessary to sign, or assign, or otherwise transfer any of the bank accounts or policies to her, and she would not require that such an assignment be made. That in addition to setting forth said facts in an affidavit form, Della Josephine Reich so testified at the time of hearing. That Leonard A. Reich furthermore extended efforts, through his legal counsel, to secure possession of the policy involved herein, and filed a replevin action in the Court of Common Pleas of Beaver County on April 18, 1940, for the possession of said policy and the other items of personal property. Said proceeding was duly served by the Sheriff of Beaver County on April 20, 1940, and the Sheriff was informed by Della Josephine Reich that she did not have said policy. That at the time of the hearing before the Court in connection with the question of alimony, which was heard during June, 1940, Della Josephine Reich testified that the policy was in the possession of her attorney, Joseph Knox Stone, said attorney being present in court at said time. As a result thereof, an alias writ of replevin was issued on June 7, 1940, for the possession of said policy in which Della Josephine Reich and Joseph Knox Stone, Attorney for Della Josephine Reich, were named as party defendants. Said proceeding was duly served by the Sheriff of Beaver County on Joseph Knox Stone on June 28, 1940, and on Della Josephine Reich on July 2, 1940. Neither of said parties filed an answer or entered an appearance to either the original replevin action filed on April 18, 1940, or to the alias writ of replevin which has just been referred to. That on February 8, 1943, a suggestion of the death of Leonard A. Reich on July 7, 1942, was filed in the Rothonotary's Office of Beaver County, and William P. Reich, the executor of the estate of Leonard A. Reich, was duly substituted as party plaintiff. That on February 8, 1943, a praecipe for the entry of judgment was duly filed in the Prothonotary's Office of Beaver County, and judgment for the possession of said policy was entered in favor of William P. Reich, the executor of the estate of Leonard A. Reich, deceased, and against Della Josephine Reich in default of an appearance and an affidavit of defense.
Della Josephine Reich contends that she consulted an attorney to properly protect her interests, and she does not know why appropriate consideration was not given the defense in the replevin action. That the default judgment which was entered in the replevin action was not in accordance ...