STATE Ex VASTINE v. CINCINNATI (City)

OPINION By HAMILTON, J. This is an original action in mandamus, by which the relator seeks to compel the respondents, trustees of the Retirement System of the City of Cincinnati, to pay to her the benefits under said retirement system accruing to the credit of George Funke, deceased, an employee of the city. He died a natural death while so employed. The respondent, Elizabeth Funke, is the surviving widow of George Funke, and the executrix of his estate. The City of Cincinnati filed an answer in the nature of an interpleader, in which it admits in substance the facts alleged in the petition of the relator, and alleges the rival claimants to the fund, and alleges that the Board of Trustees is unable to determine who is entitled to said fund, and asks the court to determine the rights of the claimants to the fund, as between relator Ella May Vastine, and respondent, Elizabeth Funke. The amount of money involved is not in question, and the City of Cincinnati admits that this amount is in the treasury of the City of Cincinnati, ready to be paid to the proper party. The question for determination grows out of the provisions of paragraph D, §26-56 of the Ordinances of the City of Cincinnati, No. 412-1931, creating the retirement system. Paragraph D is as follows: “D. Ordinary Death Benefit. “(1) Upon the receipt of proper proofs by the Board of the death of a member in service which is not the result of an accident in the actual performance of duty, as defined in Paragraph E (1) of this section, there shall be paid to such person having an insurable interest in his life as he shall have nominated by written designation duly executed and filed with the Board, or if there be no such designated person then to his legal representative: (a) His accumulated contributions. (b) A benefit equal to a lump sum payment of fifty per centum of the compensation received by the employee during the year immediately preceding his death.” At the time George Funke became a member of the retirement system, he designated the relator Ella May Vastine by written designation duly executed and filed with the Board, as his beneficiary, and that designation was never changed by any act of Georie Funke during his lifetime. The claim of the respondent, Elizabeth Funke, is that the relator never had, and did not have at the time of the death of George Funke an insurable interest, entitling her to receive the accumulated fund. She further claims that if the relator ever had such an insurable interest, that such interest terminated before the death of George Funke. It appears that the relator was a niece of said George Funk by affinity, she being the daughter of his former wife’s sister. When seven years of age, relator went to live in the home of George Funke; she being without means of support. The facts show that George Funke maintained and educated her, and she had arrived at the age of seventeen years when the designation was made. He stood in the position of loco parentis to the girl all of these years and continued to so act until his marriage to the respondent, Elizabeth Funke, sub *98 sequent to her being designated as beneficiary under his membership in the retirement system. That after the marriage of George Funke with the respondent Elizabeth Funke, the relator ceased to live in the home of George Funke, and obtained employment, supporting herself. As before stated, it is claimed that if the relator at the time of the designation had an insurable interest, it ceased to exist when she left the home after the' marriage of Funke and the respondent, Elizabeth Funke, and that the insurable interest must exist at the time the payment accrued under the terms of the ordinance. That the relator had an insurable interest at the time she was designated by the deceased George Funke, we think is clear under the law and the authorities. It has been held that relationship by affinity, accompanied by affection and support, creates such an interest. It may be reasonably considered that the relationship of niece, alhough by affinity, creates such an interest, and certainly is this so when accompanied by support and maintenance, and where the party stood in the relation of loco parentis,. Young v Hipple, Exr., 25 A.L.R. 1541, and cases cited. Thomas v Benefit Association, 46 L.R.A. (n.s.) 779. Carpenter v United States L. Ins. Co., 161 Pa. 9. Berdan v Milwaukee Mut. L. Ins. Co., 136 Mich. 396. See also: Hessenmueller, Exr. v Sirilo et, 23 C. C. (N.S.) 313, and cases cited. It is strongly contended that a fair construction of the ordinance is that the insurable interest must exist at the time of the death of the members of the retirement system. If the fair construction of the ordinance required this conclusion, it does not follow that in this case the interest ceased when the relator left the home of George Funke. While the authorities cited relate to contracts of life insurance policies, the rule stated concerning the meaning of the term insurable interest, which is the term used in the ordinance and which we must consider council meant to be applied, has application to the instant case. The writer is in accord with the statement in 22 Ohio Jur., 408, wherein it is stated: “In case of life insurance where the contract is not one of indemnity, an insurable interest at the inception of the contract is sufficient if the contract be entered into in good faith, and it is immaterial that such interest ceases prior to the death of the insured, since a policy, once valid, does not cease to be so by the cessation of the assured party’s interest in the life insured, unless such be the necessary effect of the provisions of the policy itself.” See also: 22 Ohio Jur., page 404, §262. Applying the rules laid down in Ohio Jurisprudence, supra, to the instant case, it would be entirely unreasonable to say that after having taken the niece, re'lator, into his household as a child seven years of age, maintaining and educating her, and occupying the position of loco parentis, the mere fact that the niece went out of the uncle’s home on his remarriage, and supported herself would not establish altogether that she no longer had any reason to expect further assistance. There would certainly be reasonable grounds to expect further benefits arising from the relationship existing. We are therefore of opinion that since the designation was valid, the mere fact that the relator left her uncle’s home and supported herself would not cause a cessation of her interest in her uncle’s life. We are further of the opinion that if the proper construction of the ordinance required her to have an insurable interest at the time of payment, which was at the time of death, she had an insurable interest sufficient to entitle her to the receipt of the fund as the designated party. Moreover, the writer is of opinion that the ordinance does not require the construction that the insurable interest must exist at the time of the death of the member. The ordinance is not entirely clear in its expression. It provides that there shall be paid to such person having an insurable interest in his life as he shall have denominated by written designation duly executed and filed with the board. It is only when there be no such designated person that the fund passes to the legal representative. There is such designated person, nominated at the time the deceased became a member. To make the designation legal, the beneficiary must have had at the time an insurable interest. The designation being proper, and there being no provision in the ordinance for changing the beneficary, except upon voluntary retirement, it seems the fair construction of the ordinance and the intention of council was that the money would be paid to the designated party upon the death of the member. There being no provision in the ordinance for the change of the beneficiary, the designation once having been made, whether the member *99 could change the beneficiary except as provided in paragraph 4 of §26-56, relating to voluntary retirement, is a question. However that may be, the deceased did not make any change or attempt to do so. The provision under option 1 of paragraph 4, throws some light on the meaning of council as to the interpretation of paragraph D, which provides upon retirement, that if he dies before he has received in payment of his annuity the present value of his_ annuity as it was at the time of his retirement, the balance shall be paid to his legal representatives or to such person as he shall have nominated by written designation duly executed and filed with the Board. There is no question made in this option concerning an insurable interest, but it is payable to the person nominated by the written designation. There is no more reason for reading into paragraph D “insurable interest at the time of death,” than there would be in option 1, paragraph 4. The writer’s conclusion is that paragraph D means that designated party must have an insurable interest at the time of designation and not at the time of payment; that the relator had an insurable interest at the time of designation, and that that insurable interest did not cease when she left the home of her uncle to support herself, that she possessed such an interest at the time of his decease if that were necessary for a determination of the case. Under the law and the facts,, the relator is entitled to receive the fund in question, and we find that the respondent, Elizabeth Punke is not entitled to receive the same. The writ will be granted accordingly. ROSS, J, concurring in judgment in separate memorandum.