A-14316, MAY 24, 1926, 5 COMP. GEN. 933

A-14316: May 24, 1926

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WHICH WAS NOT DEPOSITED BY THE VETERANS' BUREAU FOR COLLECTION UNTIL MAY 23. WILLIAMS WAS NOT NOTIFIED BY THE BUREAU THAT HIS CHECK HAD BEEN DISHONORED UNTIL SOME TIME IN OCTOBER. WHEN HE WAS RATED PERMANENTLY AND TOTALLY DISABLED EFFECTIVE FROM AUGUST 19. THE APPLICATION FOR REINSTATEMENT WAS FILED UNDER THE PROVISIONS OF SECTION 304 OF THE WORLD WAR VETERANS' ACT AS AMENDED BY THE ACT OF MARCH 4. IT IS UNDERSTOOD FROM YOUR SUBMISSION THAT ALL THESE CONDITIONS SPECIFIED IN THE STATUTE WERE MET ON FEBRUARY 12. FOR THE REASON THAT THE CHECK IN THE AMOUNT OF $3.45 WAS INSUFFICIENT. SAME WAS HELD. THIS CHECK WAS DATED MAY 14. IT IS ASSUMED THAT THE LARGER AMOUNT REPRESENTS THE TOTAL DUE FOR BACK PREMIUMS AND INTEREST LESS $3.45.

A-14316, MAY 24, 1926, 5 COMP. GEN. 933

VETERANS' BUREAU - INSURANCE - REINSTATEMENT WHERE THE VETERANS' BUREAU HAD DELAYED IN DEPOSITING A PRIVATE CHECK FOR COLLECTION, WHICH HAD BEEN FORWARDED IN PAYMENT OF BACK PREMIUM WITH AN APPLICATION FOR REINSTATEMENT OF WAR RISK INSURANCE, UNTIL THE ACCOUNT OF THE DRAWER OF THE CHECK AT THE BANK ON WHICH DRAWN HAD BEEN CLOSED, AND THE POLICY HAD MATURED BY PERMANENT AND TOTAL DISABILITY, THE REINSTATEMENT MAY BE CONSIDERED AS HAVING BEEN EFFECTED AS OF A DATE PRIOR TO MATURITY, IN THE ABSENCE OF OTHER OBJECTION, EITHER UPON PAYMENT OF THE AMOUNT OF THE DISHONORED CHECK OR DEDUCTION OF THAT AMOUNT FROM THE NEXT INSTALLMENT DUE THE INSURED.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, MAY 24, 1926:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 8, 1926, REQUESTING DECISION WHETHER THE REINSTATEMENT OF THE WAR-RISK INSURANCE POLICY ISSUED TO CYRIL A. WILLIAMS MAY BE VALIDATED BY GIVING MR. WILLIAMS AN OPPORTUNITY TO REPLACE A CHECK FOR $3.45, DATED FEBRUARY 12, 1925, WHICH HE HAD FORWARDED AS PAYMENT OF BACK PREMIUM WITH HIS APPLICATION FOR REINSTATEMENT, BUT WHICH WAS NOT DEPOSITED BY THE VETERANS' BUREAU FOR COLLECTION UNTIL MAY 23, 1925, NOR PRESENTED TO THE BANK ON WHICH DRAWN UNTIL JUNE 6, 1925, SUBSEQUENT TO MAY 30, 1925, WHEN MR. WILLIAMS CLOSED HIS CHECKING ACCOUNT AT THE BANK.

MR. WILLIAMS WAS NOT NOTIFIED BY THE BUREAU THAT HIS CHECK HAD BEEN DISHONORED UNTIL SOME TIME IN OCTOBER, 1925, APPARENTLY SUBSEQUENT TO OCTOBER 9, 1925, WHEN HE WAS RATED PERMANENTLY AND TOTALLY DISABLED EFFECTIVE FROM AUGUST 19, 1925, WHICH MATURED THE POLICY IF THE SAME MAY BE CONSIDERED AS HAVING BEEN REINSTATED.

THE APPLICATION FOR REINSTATEMENT WAS FILED UNDER THE PROVISIONS OF SECTION 304 OF THE WORLD WAR VETERANS' ACT AS AMENDED BY THE ACT OF MARCH 4, 1925, 43 STAT. 1310. THE STATUTE FIXES CERTAIN CONDITIONS PRECEDENT TO APPROVAL OF AN APPLICATION FOR REINSTATEMENT. IT IS UNDERSTOOD FROM YOUR SUBMISSION THAT ALL THESE CONDITIONS SPECIFIED IN THE STATUTE WERE MET ON FEBRUARY 12, 1925, WHEN THE INSURED FILED HIS APPLICATION FOR REINSTATEMENT, EXCEPT THE CONDITION REQUIRING PAYMENT OF ALL BACK MONTHLY PREMIUMS WITH INTEREST AS THEREIN STIPULATED. FOR THE REASON THAT THE CHECK IN THE AMOUNT OF $3.45 WAS INSUFFICIENT, SAME WAS HELD, AND APPLICANT NOTIFIED TO FORWARD A CHECK TO COVER BACK PREMIUMS WITH INTEREST IN THE AMOUNT OF $280.75. THIS CHECK WAS DATED MAY 14, 1925, RECEIVED BY THE VETERANS' BUREAU, AND HONORED BY THE BANK ON WHICH DRAWN. ALTHOUGH YOU DO NOT SO STATE, IT IS ASSUMED THAT THE LARGER AMOUNT REPRESENTS THE TOTAL DUE FOR BACK PREMIUMS AND INTEREST LESS $3.45, THE AMOUNT OF THE SMALLER CHECK. UPON RECEIPT OF THE LARGER CHECK THE APPLICATION FOR REINSTATEMENT WAS INDORSED "REINSTATEMENT COMPLETED EFFECTIVE MAY 14, 1925," BUT LATER INDORSED "CANCELED" WHEN THE SMALLER CHECK WAS DISHONORED.

IN DECISION OF MARCH 1, 1926, 5 COMP. GEN. 672, 673, IT WAS HELD AS FOLLOWS:

THE STATUTE HERE INVOLVED GRANTS A BENEFIT OR RIGHT TO DISABLED VETERANS IN ADDITION TO THAT ARISING UNDER THE CONTRACT TERMS OF THE POLICY. THE VALIDITY OF THE REINSTATED POLICY DEPENDS ON THE RIGHT OF THE INSURED TO HAVE HIS TERM INSURANCE REINSTATED UNDER THE TERMS OF THE STATUTE. IF ALL THE CONDITIONS OF THE STATUTE WERE POSSIBLE OF FULFILLMENT AND WERE MET WITH THE ONE EXCEPTION OF THE CONDITION WITH RESPECT TO PAYMENT OF ALL BACK PREMIUMS WITH INTEREST, AND THE FAILURE TO MEET THIS ONE CONDITION WAS DUE TO AN ERROR OF THE ADMINISTRATIVE OFFICE AND NOT BECAUSE OF ANY FAULT, ACTUAL OR CONSTRUCTIVE, ON THE PART OF THE INSURED, THE ADMINISTRATIVE ERROR WILL NOT BE HELD TO RENDER INVALID THE REINSTATEMENT OF THE TERM INSURANCE, THE ERROR BEING SUCH AS MAY NOW BE CORRECTED BY DEDUCTION OF THE AMOUNT OF THE BACK PREMIUMS WITH INTEREST, THAT SHOULD HAVE BEEN PAID, FROM THE AMOUNT OF INSURANCE DUE UNDER THE POLICY. COMP. GEN. 656, 658.

WHILE THE APPLICANT FOR REINSTATEMENT IN THE PRESENT CASE MAY HAVE BEEN NEGLIGENT IN NOT KEEPING A PROPER RECORD OF OUTSTANDING CHECKS, THE VETERANS' BUREAU WAS AT FAULT IN DELAYING SO LONG BEFORE DEPOSITING THE CHECK FOR COLLECTION. SUCH CHECKS SHOULD BE DEPOSITED IMMEDIATELY FOR COLLECTION AND TAKEN UP IN A SPECIAL-DEPOSIT ACCOUNT PENDING DETERMINATION AS TO PROPER DISPOSITION OF THE PROCEEDS, AND IF LATER A REFUND TO THE PERSON DRAWING THE CHECK IS REQUIRED, SAME MAY BE ACCOMPLISHED BY THE ISSUANCE OF A DISBURSING OFFICER'S OR TREASURER'S CHECK. THE POLICY IN THIS CASE MAY BE CONSIDERED AS HAVING BEEN REINSTATED PRIOR TO THE EFFECTIVE DATE OF THE RATING OF PERMANENT AND TOTAL DISABILITY WHICH MATURED THE POLICY, PROVIDED THE AMOUNT OF $280.75 PLUS $3.45 WAS THE FULL AMOUNT NECESSARY TO REINSTATE THE POLICY AS OF MAY 14, 1925, AND THE INSURANCE DID NOT THEREAFTER LAPSE FOR NONPAYMENT OF PREMIUMS DUE PRIOR TO AUGUST 19, 1925.

THE INSURED MAY BE PERMITTED TO FORWARD ANOTHER CHECK FOR $3.45 OR THAT AMOUNT MAY BE DEDUCTED FROM THE NEXT INSTALLMENT OF INSURANCE DUE HIM.