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A-12397, JULY 31, 1926, 6 COMP. GEN. 89

A-12397 Jul 31, 1926
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VETERANS' BUREAU - INSURANCE - BENEFICIARIES NO OBJECTION WILL BE MADE TO THE CONTINUATION OF PAYMENTS UNDER EXISTING AWARDS OF WAR-RISK INSURANCE MADE PRIOR TO JANUARY 20. PROVIDING THAT "WHERE BENEFICIARY AT THE TIME OF DESIGNATION BY THE INSURED IS WITHIN THE PERMITTED CLASS OF BENEFICIARIES AND IS THE DESIGNATED BENEFICIARY AT THE TIME OF THE MATURITY OF THE INSURANCE BECAUSE OF THE DEATH OF THE INSURED. SUCH BENEFICIARY SHALL BE DEEMED TO BE WITHIN THE PERMITTED CLASS EVEN THOUGH THE STATUS OF SUCH BENEFICIARY SHALL HAVE BEEN CHANGED.'. HOLDING THAT THE STATUTORY PROVISION IN QUESTION WAS NOT RETROACTIVELY EFFECTIVE. IS AFFIRMED. IS FOR APPLICATION WITH RESPECT TO PAYMENTS UNDER AWARDS THEREAFTER MADE.

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A-12397, JULY 31, 1926, 6 COMP. GEN. 89

VETERANS' BUREAU - INSURANCE - BENEFICIARIES NO OBJECTION WILL BE MADE TO THE CONTINUATION OF PAYMENTS UNDER EXISTING AWARDS OF WAR-RISK INSURANCE MADE PRIOR TO JANUARY 20, 1926, UNDER AN ADMINISTRATIVE CONSTRUCTION PLACING A RETROACTIVE EFFECT ON SECTION 23 OF THE ACT OF AUGUST 9, 1921, 42 STAT. 155, PROVIDING THAT "WHERE BENEFICIARY AT THE TIME OF DESIGNATION BY THE INSURED IS WITHIN THE PERMITTED CLASS OF BENEFICIARIES AND IS THE DESIGNATED BENEFICIARY AT THE TIME OF THE MATURITY OF THE INSURANCE BECAUSE OF THE DEATH OF THE INSURED, SUCH BENEFICIARY SHALL BE DEEMED TO BE WITHIN THE PERMITTED CLASS EVEN THOUGH THE STATUS OF SUCH BENEFICIARY SHALL HAVE BEEN CHANGED.' DECISION OF JANUARY 20, 1926, 5 COMP. GEN. 501, HOLDING THAT THE STATUTORY PROVISION IN QUESTION WAS NOT RETROACTIVELY EFFECTIVE, IS AFFIRMED, AND IS FOR APPLICATION WITH RESPECT TO PAYMENTS UNDER AWARDS THEREAFTER MADE.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, JULY 31, 1926:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF MARCH 11, 1926, REQUESTING RECONSIDERATION OF DECISION OF JANUARY 20, 1926, 5 COMP. GEN. 501, WHEREIN WAS CONSIDERED THE PROPER DISPOSITION TO BE MADE OF INSURANCE UNDER THE POLICY ISSUED TO RUSSELL W. WALKER, DECEASED.

REFERENCE IS MADE TO THE FORMER DECISION FOR THE FACTS IN THE CASE. WAS HELD THAT AS THE INSURED AND HIS WIFE, THE DESIGNATED BENEFICIARY, WERE DIVORCED AND THE INSURED DIED PRIOR TO THE PASSAGE OF THE ACT OF AUGUST 9, 1921, 42 STAT. 155, THAT THE WIFE WAS REMOVED FROM THE PERMITTED CLASS OF BENEFICIARIES BY THE DIVORCE PRIOR TO THE MATURITY OF THE POLICY BY DEATH OF THE INSURED AND WAS, THEREFORE, NOT ENTITLED TO THE INSURANCE, BUT THAT THE INSURANCE WAS PROPERLY PAYABLE TO THE ESTATE OF THE INSURED UNDER SECTION 303 OF WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF MARCH 4, 1925, 43 STAT. 1310, ON THE BASIS THAT NO BENEFICIARY WITHIN THE PERMITTED CLASS HAD BEEN DESIGNATED. THE BASIS FOR THIS HOLDING WAS THAT GENERALLY RIGHTS UNDER POLICIES OF WAR RISK INSURANCE ARE TO BE DETERMINED IN ACCORDANCE WITH THE STATUTE IN FORCE WHEN THE POLICY MATURES AND THAT THE FOLLOWING PROVISION IN THE ACT OF AUGUST 9, 1921, SUPRA, AMENDING SECTION 402 OF THE WAR RISK INSURANCE ACT BY ADDING SUBSECTION (A) HAD NO RETROACTIVE EFFECT:

(A) WHERE A BENEFICIARY AT THE TIME OF DESIGNATION BY THE INSURED IS WITHIN THE PERMITTED CLASS OF BENEFICIARIES AND IS THE DESIGNATED BENEFICIARY AT THE TIME OF THE MATURITY OF THE INSURANCE BECAUSE OF THE DEATH OF THE INSURED, SUCH BENEFICIARY SHALL BE DEEMED TO BE WITHIN THE PERMITTED CLASS EVEN THOUGH THE STATUS OF SUCH BENEFICIARY SHALL HAVE BEEN CHANGED.

YOU DISCUSS AT SOME LENGTH THE ADMINISTRATIVE CONSIDERATION FOR SEEKING AN AMENDMENT TO THE STATUTE AND STATE:

IMMEDIATELY UPON THE APPROVAL OF THE AMENDATORY ACT WHICH INCLUDED THIS PROVISION, THIS BUREAU AWARDED AND PAID CLAIMS TO PERSONS WHO HAD SUSTAINED THE RELATIONSHIPS BY AFFINITY TO THE INSURED WHERE SUCH RELATIONSHIPS WERE TERMINATED BY DIVORCE OR DEATH PRIOR TO THE DEATH OF THE INSURED, INCLUDING CLAIMS SUBMITTED WHERE THE DEATH OF THE INSURED HAD OCCURRED PRIOR TO AUGUST 9, 1921. THERE WERE NUMEROUS CLAIMS OF THIS NATURE PRESENTED AND URGED BEFORE THE BUREAU AND AWARDS ON MANY OF THEM HAVE NOW BEEN RUNNING COVERING INSTALLMENTS OF INSURANCE WHICH HAVE BEEN PAID FOR A PERIOD OF MORE THAN SIX YEARS.

IF THE RULE STATED BY YOU IN THE DECISION OF JANUARY 20, 1926, IS APPLICABLE NOT ONLY TO THE CASES OF DIVORCED WIVES, BUT ALSO TO THOSE OTHER PERSONS, SOME OF WHOM HAVE BEEN ENUMERATED HEREIN, WHO BORE RELATIONSHIP TO THE INSURED BY AFFINITY, IT WILL FOLLOW THAT THE AWARDS OF PAYMENTS MADE BY THE BUREAU TO SUCH PERSONS DESIGNATED BY THE INSURED MUST BE HELD UNAUTHORIZED. IF THIS BE TRUE, THEN THE QUESTION ARISES WHETHER THE BUREAU WILL BE OBLIGED TO STOP ALL OF SUCH RUNNING AWARDS AND MAKE AWARDS TO OTHER PERSONS OR TO THE ESTATE OF THE INSURED, AND IF SO, WHETHER RECOVERY WILL BE REQUIRED FROM THOSE TO WHOM THE AWARDS WERE ORIGINALLY MADE OR WHETHER DUPLICATE PAYMENTS WILL BE IN ORDER UNDER THE NEW AWARDS.

FOLLOWING THIS STATEMENT YOU APPEAR TO URGE THAT THE QUOTED PROVISION FROM THE ACT OF AUGUST 9, 1921, AMENDING AN EXISTING PROVISION OF THE WAR RISK INSURANCE ACT, WAS A CURATIVE STATUTE AND SHOULD BE CONSIDERED AS RETROACTIVE IN EFFECT. IN CONNECTION WITH THE QUESTION OF FIXING THE RIGHTS UNDER WAR RISK INSURANCE POLICIES AS OF THE DATE OF DEATH OF THE INSURED, YOU DIRECT ATTENTION TO THE CASES OF HELMHOLZ ET AL. V. HORST ET AL., 294 FED.REP. 417; CASSARELLO V. UNITED STATES, 271 FED.REP. 486; AND SALZER V. UNITED STATES, 300 FED.REP. 764, 767.

IT IS WELL SETTLED BY JUDICIAL PRECEDENT THAT UNLESS AN INTENT TO MAKE A STATUTE OPERATE RETROSPECTIVELY AS WELL AS PROSPECTIVELY IS EXPRESSED IN APT WORDS, OR UNLESS BY NECESSARY IMPLICATION FROM THE NATURE AND TERMS OF THE STATUTE INTENT IS SHOWN SO CLEARLY AS TO LEAVE NO ROOM FOR A REASONABLE DOUBT, THE STATUTE WILL NOT BE CONSTRUED TO OPERATE RETROACTIVELY. REYNOLDS V. MCARTHUR, 2 PET. 417, 435; SOUTHWESTERN COAL CO. V. MCBRIDE, 185 U.S. 499, 503; WRIGHTMAN V. BOONE COUNTY, 88 FED.REP. 435; JASPER V. UNITED STATES, 43 CT.CLS. 368; 2 COMP. GEN. 267. THERE IS NO LANGUAGE USED IN THE STATUTE HERE UNDER CONSIDERATION TO INDICATE AN INTENT TO GIVE IT A RETROACTIVE EFFECT. ON THE CONTRARY, THE PRESENT FORM OF THE VERB IS USED. YOUR STATEMENT AS TO THE DETAILS OF THE ADMINISTRATIVE CONSIDERATION THAT PRECEDED THE ENACTMENT OF THE AMENDMENT OF AUGUST 9, 1921, WHILE INDICATING AN EVIDENCE PURPOSE ON THE PART OF THE ADMINISTRATIVE OFFICE OF SEEKING CURATIVE LEGISLATION, THE WORDING OF THE STATUTE AS ADOPTED IS NOT IN SUCH TERMS AS TO EXPRESS OR IMPLY A RETROACTIVE EFFECT. REFERENCE HAS BEEN MADE TO THE HEARINGS AND REPORTS ON THE BILL WHICH BECAME THE ACT OF AUGUST 9, 1921, BUT THERE APPEARS NOTHING DEFINITE THEREIN TO INDICATE THAT IT WAS THE UNDERSTANDING OR PURPOSE OF THE CONGRESS, OR THOSE WHO ARE GIVING CONSIDERATION TO THE BILL IN THE COMMITTEE, THAT THE PROVISION WAS TO BE RETROACTIVE IN EFFECT.

CONGRESS HAS PASSED MANY AMENDMENTS TO THE WAR RISK INSURANCE ACT AND THE WORLD WAR VETERANS' ACT, BOTH BEFORE AND AFTER THE PASSAGE OF THE AMENDMENT UNDER CONSIDERATION, AND SOME OF THEM ARE RETROACTIVE IN EFFECT. IN THOSE AMENDMENTS INTENDED TO BE RETROACTIVE IN EFFECT THERE HAS BEEN INCLUDED CLEAR AND UNEQUIVOCAL LANGUAGE SO PROVIDING. FOR INSTANCE, THIS SAME PROVISION NOW UNDER CONSIDERATION WAS OMITTED FROM THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, BUT BY SECTION 12 OF THE ACT OF MARCH 4, 1925, 43 STAT. 1309, THE PRIOR ACT WAS AMENDED TO INCLUDE THE PROVISION AND THE SECTION CLOSED WITH THESE WORDS: "THIS SECTION SHALL BE DEEMED TO BE IN EFFECT AS OF JUNE 7, 1924.' ANOTHER INSTANCE IS SECTION 13 OF THE ACT OF DECEMBER 24, 1919, 41 STAT. 371, 375, WHICH ENLARGED THE PERMITTED CLASS OF BENEFICIARIES TO INCLUDE "UNCLES, AUNTS, NEPHEWS, NIECES, BROTHERS-IN-LAW, AND SISTERS-IN-LAW OF THE INSURED.' THE SECTION CONTAINED THESE WORDS: "THIS SECTION SHALL BE DEEMED TO BE IN EFFECT AS OF OCTOBER 6, 1917.' IT WAS THIS LATTER AMENDMENT THAT WAS GIVEN CONSIDERATION BY THE COURT IN THE FIRST CASE CITED BY YOU IN CONNECTION WITH THE QUESTION OF FIXING THE RIGHTS UNDER A POLICY AS OF THE DATE OF DEATH OF THE INSURED. THE FACTS DISCLOSED THAT A PERSON BEARING A RELATIONSHIP TO THE INSURED NOT WITHIN THE PERMITTED CLASS WAS DESIGNATED AND THE INSURED DIED PRIOR TO THE PASSAGE OF THE CITED ACT WHICH ENLARGED THE PERMITTED CLASS TO INCLUDE THE RELATIONSHIP OF THE PERSON PREVIOUSLY DESIGNATED. THE COURT PROPERLY CONSTRUED THE STATUTE ENLARGING THE PERMITTED CLASS AS RETROACTIVE IN EFFECT IN VIEW OF THE EXPRESS TERMS THEREOF AND HELD THAT THE POLICIES OF INSURANCE WERE SUBJECT TO SUCH CHANGE IN THE STATUTE. THIS PRINCIPLE WAS APPROVED BY THE SUPREME COURT OF THE UNITED STATES IN DECISION DATED MARCH 1, 1926, IN THE CASE OF EMMA WHITE V. UNITED STATES ET AL., WHEREIN THE COURT WAS CAREFUL TO STATE THAT THE STATUTE WAS EXPRESSLY RETROACTIVELY EFFECTIVE. SAID DECISION MAY NOT BE CONSIDERED AS SUPPORTING THE VIEW THAT THE PRESENT STATUTE HERE UNDER CONSIDERATION IS TO BE CONSIDERED AS RETROACTIVE IN EFFECT. FOR THE REASON THAT THE CONGRESS HAS IN ALL CASES USED LANGUAGE WHICH LEAVES NO ROOM FOR DOUBT WHEN AMENDING THE WAR RISK INSURANCE ACT AND WORLD WAR VETERANS' ACT RETROACTIVELY EFFECTIVE, OTHER AMENDMENTS WHICH DO NOT CONTAIN SUCH EXPRESS LANGUAGE MAY NOT BE GIVEN A RETROACTIVE EFFECT UNLESS THERE ARE OTHER CONSIDERATIONS NOT HERE APPARENT FOR IMPELLING SUCH A CONSTRUCTION. THE OTHER COURT CASES CITED BY YOU DEAL WITH OTHER PROVISIONS OF THE LAW AND REGULATIONS NOT HERE FOR APPLICATION.

UPON REVIEW OF THE LAW AS APPLIED TO THE FACTS IN THE PARTICULAR CASE, I AM CONVINCED THAT THE DECISION OF JANUARY 20, 1926, IS CORRECT. I WAS NOT ADVISED AT THAT TIME OF THE RETROACTIVE EFFECT PLACED ON THE STATUTE BY THE FORMER DIRECTOR OF THE VETERANS' BUREAU. IN FACT, I WAS LED TO BELIEVE FROM THE STATEMENT IN YOUR FORMER SUBMISSION THAT THE DIVORCEE WAS NOT ENTITLED TO INSURANCE BENEFITS THAT THE STATUTE HAD NOT BEEN CONSIDERED BY THE VETERANS' BUREAU AS RETROACTIVELY EFFECTIVE. IN ANY EVENT, I CAN NOT AGREE WITH THE CONSTRUCTION WHICH THE FORMER DIRECTOR APPEARS TO HAVE PLACED ON THE PROVISION.

HOWEVER, IN VIEW OF THE FACT THAT THE AMOUNTS DUE UNDER THE POLICIES LAWFULLY ISSUED CONSTITUTE OBLIGATIONS OF THE UNITED STATES IN FAVOR OF SOME INDIVIDUAL OR INDIVIDUALS AND THAT AWARDS OF INSURANCE HAVE CONSISTENTLY BEEN MADE ON THE BASIS OF THE ADMINISTRATIVE CONSTRUCTION OF THE STATUTE WHICH HAS MAINTAINED FOR NEARLY FIVE YEARS, IT DOES NOT APPEAR NECESSARY AT THIS TIME TO INTERPOSE OBJECTION TO CONTINUANCE OF PAYMENTS ON EXISTING AWARDS MADE UNDER THE ADMINISTRATIVE CONSTRUCTION OF THE STATUTE. 4 COMP. DEC. 478; 14 ID. 116. SUCH CONTINUANCE OF PAYMENTS UNDER EXISTING AWARD WILL BE IN LINE WITH THE POLICY OF THE CONGRESS OF NOT DISTURBING AWARDS OF INSURANCE WHICH ARE IN COURSE OF PAYMENT WHEN AMENDING THE PROVISIONS OF THE WORLD WAR VETERANS' ACT SO AS TO CHANGE THE CLASS OF PERSONS ENTITLED TO RECEIVE THE BENEFITS UNDER STATED CONDITIONS OR CIRCUMSTANCES. SEE THE ACT OF MARCH 4, 1925, 43 STAT. 1310, AMENDING SECTION 303 OF THE WORLD WAR VETERANS' ACT SO AS TO PROVIDE FOR PAYMENT OF TERM INSURANCE TO THE ESTATE OF THE INSURED RATHER THAN TO THE ESTATE OF THE BENEFICIARY, BUT WITH A PROVISO---

* * * THAT ALL AWARDS OF YEARLY RENEWABLE TERM INSURANCE WHICH ARE IN COURSE OF PAYMENT ON THE DATE OF THE APPROVAL OF THIS ACT SHALL CONTINUE UNTIL THE DEATH OF THE PERSON RECEIVING SUCH PAYMENTS, OR UNTIL HE FORFEITS SAME UNDER THE PROVISIONS OF THIS ACT. * * *

THE DECISION OF JANUARY 20, 1926, IS FOR APPLICATION WITH RESPECT TO PAYMENTS UNDER AWARDS THEREAFTER MADE.

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