
    METROPOLITAN LIFE INS. CO. v. WHITLER. WHITLER v. WHITLER.
    No. 9673.
    United States Court of Appeals Seventh Circuit.
    Jan. 31, 1949.
    
      James R. Hale, of Fayetteville, Ark., and Roy M. Seeley, of Springfield, 111., 'for. appellant.
    Harold G. T-alley and Anthony W. Daly, both of Alton, 111., and Thomas F. Butt, of Fayetteville, Ark., for appellee.
    Before MAJOR, Chief Judge/ KERNER, Circuit Judge, and LINDLEY, District Judge.
   KERNER, Circuit Judge.

This' was an- interpleader suit. Plaintiffs, corporations. of the States of New Y-ork, Connecticut and Virginia, respectively, filed their complaint against Helen Marie Whitler, a citizen of the State of Illinois, -and Ruth L. Whitler, a citizen of the State of Arkansas, to have determined conflicting claims under k policy of ■insurance issued by the Metropolitan Life Insurance Company, w-hereby it agreed to pay to the beneficiary named therein, upon the death bf Isaac E.-Whitler, an employee of Shell Oil Company, the sum -of $4,500. The existence of the requisite jurisdictional amount, the diversity of citizenship of the adverse claimants, -and -the disinterestedness of plaintiffs made the remedy of the Interpleader Act .available to the insurer. Treinies v. Sunshine Mining Co., 308 U. S. 66, 60 S.Ct. 44, 84 L.Ed. 85; Federal Life Ins. Co. v. Tietsort, 7 Cir., 131 F.2d 448.

Isaac E. Whitler -died on February 26, 1947. Helen- is his. daughter and Ruth is his widow. Each defendant claimed to be the beneficiary. Helen based her claim to the fund on the ground that she was named as the beneficiary in the policy. Ruth claimed that she had been named as beneficiary in the application for the policy and -hence was entitled to the fund. The trial judge made special findings of fact, rendered his conclusions of law thereon, and entered a decree awarding Helen Marie Whitler the money deposited by Metropolitan in the court’s registry. To reverse the decree, Ruth L. Whitler appeals.

The facts -are undisputed. On March 21, 1944, Isaac, an employee of Shell, pursuant to the terms of Group Life Insurance Policy No. 9960-G, issued by Metropolitan to Shell, .filed with Shell a written application for a policy of insurance in which ■he designated appellant as the beneficiary. The record is silent -as to any later and different -application made and filed by -him. Under this group policy, Metropolitan, about April 1, 1944, issued and delivered to Isaac the policy involved herein. This policy Isaac retained in his possession until his decease. The policy named appellee as beneficiary. Isaac knew and was ■fully aware that appellee was named as beneficiary in the policy and accepted the policy with knowledge that appellee was so named as beneficiary. After Isaac’s death the -policy was found in his safety-deposit box, to which appellant had access. She had examined the policy during.Isaac’s lifetime and knew that appellee’s name appeared therein as beneficiary. The court concluded that even if Isaac did originally intend that- appellant should be the beneficiary, by his acceptance and retention of the policy it must be presumed that he changed his mind and concluded to accept-the contract tendered by the insurer.

Upon oral argument, counsel for appel-. lant stated that the only question in this appeal -is whether appellant is entitled -to. the fund because she was named as beneficiary in -the application under the provisions of the group -policy. She calls attention to the fact that section 3 of the group or master.policy provides that an employee may ¡become insured thereunder only by making written request to the employer on, a form furnished by the insurance company, and argues that the individual policy issued to Isaac was not a part of the contract of, or necessary to, the insurance, but that the master policy constitutes the contract of insurance. She cites cases where the certificate issued by an employer was merely evidence of the employee’s participation in a group plan, and not a policy issued by an insurance company. Such ca-ses are not in point and it would serve no useful purpose to discuss them. Here, Metropolitan issued its own insurance policy in which it certified that Isaac E. W'hitler was insured for $4,500 and agreed that if he died while in the employ of Shell and while insured under the group policy, the amount of insurance at the date of his death would be paid to Helen Marie Whitler.

In consideration of appellant’s contention it is well to remember that the same rules of construction apply to group insurance as to other forms -of insurance. Howard v. Aetna Life Ins. Co., 329 Ill. App. 248, 255, 67 N.E.2d 878. Th-e law is well settled that an application f-or life insurance itself is not the -contract, but is a mere offer or proposal for a contract -of insurance. It is merely a -step in th-e creation of the insurance contract. 29 Am. Jur. p. 152. And wh-ere the insurance company tenders a policy at variance with the application, the tender constitutes a counter-offer, and upon acceptance of -the policy by the insured, there is a meeting of the minds a-nd -the policy becomes the contract between -the insured -and the -insurance company. 44 C.J.S., Insurance, § 232, page 972. See also Minnesota Mut. Life Ins. Co. v. Newman, Tex.Civ.App., 157 S.W.2d 667, 671. While it is true that an individual certificate or -policy of -group life insurance issued an-d delivered to- an ■insured employee is an integral part of the master policy, yet the provisions of the individual policy govern in determining the beneficiary entitled to the -proceeds of -the policy upon the death of -th-e insured employee. Baker v. Prudential Ins. Co., 279 Ill. App. 5; Wing v. John Hancock Mut. Life Ins. Co., 314 Mass. 269, 49 N.E.2d 905, 906. The application -confers no right -on the beneficiary named therein, and it ha-s been held that even where -an application is made a part of th-e policy -and there is an irreconcilable conflict between the application and th-e policy .issued, the provisions of the policy control. Burt v. Burt, 218 Pa. 198, 67 A. 210, 211; Aetna Life Ins. Co. v. Phillips, 10 Cir., 69 F.2d 901, 904. Moreover, receipt and retention of -a policy with knowledge as to whom it :i-s payable -constitutes ratification and it is accepted -as written. McFadden v. Equitable Life Assur. Soc., 351 Pa. 570, 41 A.2d 624; Woehr v. Travelers Ins. Co., 134 N.J.Eq. 38, 34 A.2d 136.

We -conclude -that the District Court -did not -err in -awarding the proceeds -of the policy .to -appellee. Accordingly the decree is affirmed. 
      
       28 U.S.C.A. § 41(26) [now §§ 1335, 1397, 2361].
     