A-12971, FEBRUARY 15, 1926, 5 COMP. GEN. 635

A-12971: Feb 15, 1926

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SPECIAL FUND" IS AVAILABLE FOR PAYMENT OF THE GOVERNMENT'S LIABILITY UNDER AN INSURANCE CONTRACT WHERE SUCH LIABILITY IS ORDERED TO JUDGMENT IN AN ACTION BROUGHT IN A UNITED STATES DISTRICT COURT IN ACCORDANCE WITH THE TERMS OF THE WAR-RISK INSURANCE ACT AND THE WORLD WAR VETERANS' ACT ON A CONTRACT OF TERM INSURANCE UNDER THE PROVISIONS OF ARTICLE IV OF THE WAR- RISK INSURANCE ACT OR ARTICLE III OF THE WORLD WAR VETERANS' ACT. APPROPRIATED FUNDS UNDER THE ADMINISTRATIVE CONTROL OF THE DIRECTOR OF THE VETERANS' BUREAU ARE NOT AVAILABLE FOR PAYMENT OF COSTS INCLUDED BY A UNITED STATES DISTRICT COURT AS A PART OF A JUDGMENT AGAINST THE UNITED STATES IN A SUIT BROUGHT PURSUANT TO THE PROVISIONS OF THE WAR RISK INSURANCE ACT OR IN THE WORLD WAR VETERANS' ACT.

A-12971, FEBRUARY 15, 1926, 5 COMP. GEN. 635

VETERANS' BUREAU - INSURANCE - PAYMENT OF JUDGMENTS THE APPROPRIATION "MILITARY AND NAVAL INSURANCE, VETERANS' BUREAU, SPECIAL FUND" IS AVAILABLE FOR PAYMENT OF THE GOVERNMENT'S LIABILITY UNDER AN INSURANCE CONTRACT WHERE SUCH LIABILITY IS ORDERED TO JUDGMENT IN AN ACTION BROUGHT IN A UNITED STATES DISTRICT COURT IN ACCORDANCE WITH THE TERMS OF THE WAR-RISK INSURANCE ACT AND THE WORLD WAR VETERANS' ACT ON A CONTRACT OF TERM INSURANCE UNDER THE PROVISIONS OF ARTICLE IV OF THE WAR- RISK INSURANCE ACT OR ARTICLE III OF THE WORLD WAR VETERANS' ACT. APPROPRIATED FUNDS UNDER THE ADMINISTRATIVE CONTROL OF THE DIRECTOR OF THE VETERANS' BUREAU ARE NOT AVAILABLE FOR PAYMENT OF COSTS INCLUDED BY A UNITED STATES DISTRICT COURT AS A PART OF A JUDGMENT AGAINST THE UNITED STATES IN A SUIT BROUGHT PURSUANT TO THE PROVISIONS OF THE WAR RISK INSURANCE ACT OR IN THE WORLD WAR VETERANS' ACT.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, FEBRUARY 15, 1926:

I HAVE YOUR LETTER OF FEBRUARY 4, 1926, REQUESTING DECISION WHETHER THERE IS ANY APPROPRIATION AVAILABLE FOR THE PAYMENT OF A JUDGMENT RENDERED BY A UNITED STATES DISTRICT COURT AGAINST THE UNITED STATES AND IN FAVOR OF MAE NELA DEMARIA BOYD, FOR THE AMOUNT OF WAR-RISK INSURANCE REMAINING DUE UNDER THE TERM POLICY ON THE LIFE OF JOHN A. DEMARIA, DECEASED, TOGETHER WITH COSTS AMOUNTING TO $30.

YOU STATE IN YOUR SUBMISSION THAT A COUNTERCLAIM FOR $751 ASSERTED ON BEHALF OF THE UNITED STATES, REPRESENTING DISABILITY COMPENSATION PAID TO THE WIDOW OF THE DECEASED SUBSEQUENT TO THE TIME SHE HAD FORFEITED HER RIGHT THERETO UNDER THE PROVISIONS OF SECTION 22 OF THE WAR-RISK INSURANCE ACT, HAD BEEN DENIED BY THE COURT ON THE BASIS THAT SHE HAD ENTERED INTO A COMMON-LAW MARRIAGE WITH HER PRESENT HUSBAND. ON THE BASIS OF THIS COMMON -LAW MARRIAGE, THE WIDOW, WHILE NOT FORFEITING HER RIGHT TO DISABILITY COMPENSATION UNDER SUBSECTION 5 OF SECTION 22OF THE WAR-RISK INSURANCE ACT OF OCTOBER 6, 1917, 40 STAT. 401, DID THEREBY UNDER SUBSECTION (G) OF SECTION 301 OF THE WAR-RISK INSURANCE ACT, OCTOBER 6, 1917, 40 STAT. 405, AS AMENDED BY THE ACT OF JUNE 25, 1918, 40 STAT. 612, LOSE HER RIGHT TO SUCH DISABILITY COMPENSATION. SEE ALSO AMENDATORY ACT OF MARCH 4, 1923, 42 STAT. 1524, AND SECTION 201, (2) OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 617. THE OFFICE HAS BEEN ADVISED BY A REPRESENTATIVE OF THE VETERANS' BUREAU THAT THE COURT HAS AGREED TO RECONSIDER ITS ACTION ON THE COUNTERCLAIM WHICH IS NOW PENDING, AND THAT YOUR REQUEST FOR DECISION AS TO AUTHORITY TO OFFSET THE AMOUNT OF THE COUNTERCLAIM AGAINST THE AMOUNT OF THE JUDGMENT, MAY BE CONSIDERED AS WITHDRAWN FOR THE PRESENT, AND THE SUBMISSION CONSIDERED AS A REQUEST FOR DECISION OF THE OTHER QUESTIONS, WHETHER THERE IS AN APPROPRIATION AVAILABLE FOR PAYMENT OF THE NET AMOUNT OF THE FINAL JUDGMENT TO BE RENDERED, INCLUDING COSTS. CONNECTION WITH THE AUTHORITY TO OFFSET AMOUNT OF THE COUNTERCLAIM SEE 4 COMP. GEN. 858.

IT IS UNDERSTOOD THAT THE INSURED DIED NOVEMBER 1, 1918, THAT INSURANCE PAYMENTS CEASED JANUARY 31, 1923, AFTER THE DEVELOPMENT OF FACTS RAISING A DOUBT AS TO WHOM THE REMAINDER OF THE INSURANCE DUE UNDER THE POLICY SHOULD BE PAID, AND THE SUIT WAS FILED FEBRUARY 14, 1924.

THE WAR-RISK INSURANCE ACT, AS AMENDED BY THE ACT OF MAY 20, 1918, 40 STAT. 555, PROVIDES AS FOLLOWS:

* * * THAT IN THE EVENT OF DISAGREEMENT AS TO A CLAIM UNDER THE CONTRACT OF INSURANCE BETWEEN THE BUREAU AND ANY BENEFICIARY OR BENEFICIARIES THEREUNDER, AN ACTION ON THE CLAIM MAY BE BROUGHT AGAINST THE UNITED STATES IN THE DISTRICT COURT OF THE UNITED STATES IN AND FOR THE DISTRICT IN WHICH SUCH BENEFICIARIES OR ANY ONE OF THEM RESIDES, AND THAT WHENEVER JUDGMENT SHALL BE RENDERED IN AN ACTION BROUGHT PURSUANT TO THIS PROVISION, THE COURT, AS PART OF ITS JUDGMENT, SHALL DETERMINE AND ALLOW SUCH REASONABLE ATTORNEY'S FEES, NOT TO EXCEED FIVE PERCENTUM OF THE AMOUNT RECOVERED, TO BE PAID BY THE CLAIMANT IN BEHALF OF WHOM SUCH PROCEEDINGS WERE INSTITUTED, TO HIS ATTORNEY.

THIS PROVISION WAS SUPERSEDED AND AMENDED BY SECTION 19 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 612. NO PROVISION IS MADE IN EITHER STATUTE RELATIVE TO ASSESSMENT OF COSTS. THE WAR-RISK INSURANCE ACT CONTAINED NO PROVISION FOR PAYMENT OF JUDGMENTS FROM THE APPROPRIATIONS OR INSURANCE FUNDS UNDER THE JURISDICTION AND CONTROL OF THE VETERANS' BUREAU, THE FUND "MILITARY AND NAVAL INSURANCE APPROPRIATION" HAVING BEEN LIMITED TO PAYMENTS IN ACCORDANCE WITH AWARDS BY THE DIRECTOR. SEE ACT OF OCTOBER 6, 1917, 40 STAT. 400. SECTION 16 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 612, PROVIDES AS FOLLOWS:

ALL SUMS HERETOFORE APPROPRIATED FOR THE MILITARY AND NAVAL INSURANCE APPROPRIATION AND ALL PREMIUMS COLLECTED FOR THE YEARLY RENEWABLE TERM INSURANCE PROVIDED BY THE PROVISIONS OF TITLE III DEPOSITED AND COVERED INTO THE TREASURY TO THE CREDIT OF THIS APPROPRIATION, SHALL, WHERE UNEXPENDED, BE MADE AVAILABLE FOR THE BUREAU. ALL PREMIUMS THAT MAY HEREAFTER BE COLLECTED FOR THE YEARLY RENEWABLE TERM INSURANCE PROVIDED BY THE PROVISIONS OF TITLE III HEREOF SHALL BE DEPOSITED AND COVERED INTO THE TREASURY FOR THE CREDIT OF THIS APPROPRIATION. SUCH SUM INCLUDING ALL PREMIUM PAYMENTS IS MADE AVAILABLE FOR THE PAYMENT OF THE LIABILITIES OF THE UNITED STATES INCURRED UNDER CONTRACTS OF YEARLY RENEWABLE TERM INSURANCE MADE UNDER THE PROVISIONS OF TITLE III, INCLUDING SUCH LIABILITIES AS SHALL HAVE BEEN OR SHALL HEREAFTER BE REDUCED TO JUDGMENT IN A DISTRICT COURT OF THE UNITED STATES OR IN THE SUPREME COURT OF THE DISTRICT OF COLUMBIA. PAYMENTS FROM THIS APPROPRIATION SHALL BE MADE UPON AND IN ACCORDANCE WITH THE AWARDS BY THE DIRECTOR.

YOUR DOUBT AS TO THE AVAILABILITY OF THE MILITARY AND NAVAL INSURANCE APPROPRIATION FOR PAYMENT OF THIS JUDGMENT APPEARS TO ARISE BECAUSE THE QUOTED SECTION DOES NOT SPECIFICALLY MENTION INSURANCE CONTRACTS UNDER TITLE IV OF THE WAR-RISK INSURANCE ACT UNDER WHICH THE LIABILITY AROSE IN THE PRESENT CASE. TITLE III OF THE WORLD WAR VETERANS' ACT, RELATIVE TO INSURANCE, SUPERSEDES TITLE IV OF THE WAR RISK INSURANCE ACT. IT IS REASONABLE TO CONCLUDE THAT THE WORDS "INCLUDING SUCH LIABILITIES AS SHALL HAVE BEEN" REFER TO LIABILITIES OF THE UNITED STATES INCURRED IN THE PAST UNDER CONTRACTS OF YEARLY RENEWABLE TERM INSURANCE UNDER ARTICLE IV OF THE WAR-RISK INSURANCE ACT, AND THAT THE WORDS "OR SHALL HEREAFTER" REFER TO LIABILITIES INCURRED UNDER ARTICLE III OF THE WORLD WAR VETERANS' ACT, FOR THE REASON THAT ARTICLE III OF THE WORLD WAR VETERANS' ACT WAS NOT IN EXISTENCE PRIOR TO THE DATE OF THE ACT. THE EVIDENT PURPOSE WAS TO MAKE THE APPROPRIATION AVAILABLE FOR PAYMENTS OF ALL LIABILITIES UNDER THE CONTRACTS OF INSURANCE WHEN REDUCED TO JUDGMENT PURSUANT TO EITHER STATUTE.

YOU ARE ADVISED, THEREFORE, THAT THE APPROPRIATION "MILITARY AND NAVAL INSURANCE, VETERANS' BUREAU, SPECIAL FUND," IS AVAILABLE FOR PAYMENT OF THE INSURANCE LIABILITY WHICH WAS REDUCED TO JUDGMENT IN THIS CASE.

THE JUDGMENT PROVIDES FOR THE PAYMENT OF THE INSURANCE LIABILITY "TOGETHER WITH THE COSTS AND DISBURSEMENTS AGAINST THE DEFENDANT, UNITED STATES OF AMERICA AND IN FAVOR OF THE PLAINTIFF IN THE SUM OF THIRTY ($30.00) DOLLARS.' THE CONTROLLING STATUTES ARE SILENT AS TO THE ASSESSMENT OF COSTS OF ACTIONS BROUGHT UNDER THE PROVISIONS THEREOF. AND IN VIEW OF TERMS OF THE STATUTE, SUPRA, MAKING THE APPROPRIATION AVAILABLE FOR LIABILITIES OF THE UNITED STATES "INCURRED UNDER CONTRACTS OF * * * INSURANCE * * * INCLUDING SUCH LIABILITIES * * * REDUCED TO JUDGMENT" AND THE RULINGS OF THE SUPREME COURT TO THE EFFECT THAT COSTS CAN NOT BE TAXED AGAINST THE UNITED STATES (SEE STANLEY V. SCHWALBY, 162 U.S. 255, 272, CITING UNITED STATES V. HOOE, 3 CRANCH 73, 91, 92; UNITED STATES V. BARKER, 2 WHEAT. 395; THE ANTELOPE, 12 WHEAT. 546, 550; UNITED STATES V. RINGGOLD, 8 PET. 150, 163; UNITED STATES V. BOYD, 5 HOW. 29, 51; SEE ALSO PINE RIVER LOGGING COMPANY V. UNITED STATES, 186 U.S. 279, 296), IT MUST BE HELD THAT SAID APPROPRIATION IS NOT AVAILABLE FOR THE PAYMENT OF COSTS. SEE IN THIS CONNECTION 16 COMP. DEC. 693.

YOU ARE ADVISED, THEREFORE, THAT THAT PORTION OF THE JUDGMENT REPRESENTING COSTS MAY NOT BE PAID FROM ANY APPROPRIATION OR FUND UNDER YOUR ADMINISTRATIVE CONTROL.