A-15284, AUGUST 23, 1926, 6 COMP. GEN. 152

A-15284: Aug 23, 1926

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IN A CASE WHERE THE DISTRIBUTION WAS ERRONEOUS EITHER BECAUSE OF A MISTAKE OF LAW OR BECAUSE OF THE SUBSEQUENT DISCOVERY OF A RELATIVE THE EXISTENCE OF WHOM WAS PREVIOUSLY UNKNOWN TO THE VETERANS' BUREAU. AS FOLLOWS: YOUR DECISION IS REQUESTED AS TO THE EXTENT TO WHICH THIS BUREAU MAYAPPLY YOUR OPINION OF MAY 20. MATCHETT IN WHICH YOU CONSIDERED SECTION 303 OF THE WORLD WAR VETERANS' ACT WITH PARTICULAR REFERENCE TO THE PHRASE THEREIN CONTAINED RELATING TO AWARDS "WHICH ARE IN COURSE OF PAYMENT ON THE DATE OF THE APPROVAL OF THIS ACT" (THAT IS. THAT THEREFORE AS PAYMENTS WERE BEING MADE AT THE TIME OF ENACTMENT IT MIGHT BE HELD THAT THE AWARD WAS IN COURSE OF PAYMENT ON MARCH 4. YOU WILL FURTHER RECALL.

A-15284, AUGUST 23, 1926, 6 COMP. GEN. 152

VETERANS' BUREAU - INSURANCE - AWARDS IN COURSE OF PAYMENT UNDER THE PROVISIONS OF SECTION 303 OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF MARCH 4, 1925, 43 STAT. 1310, EXCEPTING AWARDS "IN COURSE OF PAYMENT" FROM THE REQUIREMENT THAT PAYMENT SHALL BE MADE TO THE ESTATE OF THE INSURED IN THE EVENT OF THE DEATH OF THE DESIGNATED BENEFICIARY BEFORE RECEIVING ALL OF THE 240 MONTHLY INSTALLMENTS, THE PRINCIPLE ANNOUNCED IN DECISION OF MAY 20, 1926, 5 COMP. GEN. 924, THAT AN AWARD IN FAVOR OF A NUMBER OF PERSONS AS DISTRIBUTEES UNDER AN ESTATE MAY BE CONSIDERED AS AN ENTIRETY, MAY BE APPLIED TO A CASE WHERE PAYMENTS TO ONE OF THE DISTRIBUTEES HAD BEEN WITHHELD UNTIL SUBSEQUENT TO MARCH 4, 1925, FOR COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS OF THE VETERANS' BUREAU. THE PRINCIPLE MAY NOT BE APPLIED, HOWEVER, IN A CASE WHERE THE DISTRIBUTION WAS ERRONEOUS EITHER BECAUSE OF A MISTAKE OF LAW OR BECAUSE OF THE SUBSEQUENT DISCOVERY OF A RELATIVE THE EXISTENCE OF WHOM WAS PREVIOUSLY UNKNOWN TO THE VETERANS' BUREAU.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, AUGUST 23, 1926:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF AUGUST 2, 1926, AS FOLLOWS:

YOUR DECISION IS REQUESTED AS TO THE EXTENT TO WHICH THIS BUREAU MAYAPPLY YOUR OPINION OF MAY 20, 1926, A-14176, IN THE CASE OF WILLIAM R. MATCHETT IN WHICH YOU CONSIDERED SECTION 303 OF THE WORLD WAR VETERANS' ACT WITH PARTICULAR REFERENCE TO THE PHRASE THEREIN CONTAINED RELATING TO AWARDS "WHICH ARE IN COURSE OF PAYMENT ON THE DATE OF THE APPROVAL OF THIS ACT" (THAT IS, THE WORLD WAR VETERANS' ACT). YOU HELD, AS YOU RECALL, THAT IN THE MATCHETT CASE THE AWARD TO ALL OF THE DISTRIBUTEES COLLECTIVELY MIGHT BE CONSIDERED AS AN ENTIRETY AND NOT AS SEPARATE AND DISTINCT AWARDS TO THE INDIVIDUAL DISTRIBUTEES, AND THAT THEREFORE AS PAYMENTS WERE BEING MADE AT THE TIME OF ENACTMENT IT MIGHT BE HELD THAT THE AWARD WAS IN COURSE OF PAYMENT ON MARCH 4, 1925, AND THEREFORE WITHIN THE EXCEPTION CONTAINED IN SECTION 303, OF THE WORLD WAR VETERANS' ACT. YOU WILL FURTHER RECALL, HOWEVER, THAT IN THE MATCHETT CASE THE FACTS SHOWED CLEARLY THAT AN AWARD TO ONE OF THE DISTRIBUTEES HAD BEEN WITHHELD SIMPLY BECAUSE THE SAID DISTRIBUTEE WAS UNDER A LEGAL DISABILITY (MINORITY) AND HAD REQUESTED THE WITHHOLDING OF THE PAYMENT TO HIM UNTIL HE HAD REACHED HIS MAJORITY IN ORDER TO AVOID THE EXPENSE OF THE PROCUREMENT OF A GUARDIAN, WHICH EXPENSE WOULD HAVE TO A GREAT EXTENT CONSUMED THE AMOUNT OF THE AWARD TO WHICH THE MINOR WAS ENTITLED.

WHILE THE MATCHETT CASE WAS CLEARLY LIMITED TO AWARDS WHICH HAD BEEN WITHHELD BECAUSE OF THE EXISTENCE OF SOME TEMPORARY LEGAL DISABILITY SUCH AS MINORITY, NEVERTHELESS THE QUESTION HAS ARISEN AS TO WHETHER THE SAME PRINCIPLE UPON WHICH THE MATCHETT CASE WAS PREDICATED MIGHT BE APPLIED TO CASES ARISING UNDER SECTION 303 OF THE WORLD WAR VETERANS' ACT WHERE THE AWARDS WERE NOT WITHHELD BECAUSE OF A LEGAL DISABILITY.

THE FIRST TYPE CASE IS THAT IN WHICH THERE WERE FOUR BROTHERS AND AWARDS WERE MADE TO THREE OF THESE BROTHERS PRIOR TO THE ENACTMENT OF SECTION 303 OF THE WORLD WAR VETERANS' ACT. THE AWARD TO THE FOURTH BROTHER HAD BEEN WITHHELD PENDING MERELY COMPLIANCE WITH SOME FORMAL PROCEDURAL REQUIREMENT. THAT IS TO SAY, THE BUREAU HAD NOTICE OF THE EXISTENCE OF FOUR BROTHERS, AND HAD MADE AWARDS TO THREE OF THEM BUT THE NECESSARY PROOF AS TO THE FOURTH BROTHER WAS NOT ENTIRELY COMPLETE, AND BEFORE SUCH PROOF WAS RECEIVED SECTION 303 OF THE WORLD WAR VETERANS' ACT WAS ENACTED, THUS RAISING THE QUESTION WHETHER THE AWARD IN THAT CASE MIGHT BE CONSIDERED UNDER THE DOCTRINE OF THE MATCHETT OPINION AS AN ENTIRETY, SO AS TO PERMIT AN AWARD TO THE FOURTH BROTHER WHEN THE NECESSARY PROOF HAD BEEN RECEIVED AFTER MARCH 4, 1925, ON THE SAME BASIS AS THE AWARDS TO THE OTHER THREE BROTHERS.

THE SECOND CLASS OF CASES PRESENTED IS ONE IN WHICH ALL OF THE INSURANCE HAD BEEN AWARDED PRIOR TO SECTION 303 OF THE WORLD WAR VETERANS' ACT, BUT THERE MAY HAVE BEEN IN ERROR IN THE DISTRIBUTION OF THE INSURANCE EITHER BY A MISTAKE OF LAW, OR BY THE DISCOVERY OF SOME RELATIVE ENTITLED TO SHARE OF WHOM THE BUREAU HAD NO PREVIOUS KNOWLEDGE, WHO NOW MAKES A CLAIM FOR HIS RESPECTIVE PROPORTION OF HIS INSURANCE.

WITHOUT ATTEMPTING AN EXTENDED ANALYSIS OF THESE CASES IT MAY BE SAID THAT A NUMBER OF REASONS HAVE PROMPTED THIS BUREAU IN THE PAST TO HOLD THAT SECTION 303 WOULD APPLY, ON THE THEORY THAT SECTION 303 WAS NOT INTENDED TO PROTECT AS INVALID OR AN ILLEGAL AWARD. SINCE THE AWARDS IN BOTH OF THESE TYPE CASES EITHER HAD NOT BEEN MADE OR ELSE WERE ERRONEOUS FOR ONE REASON OR ANOTHER, IT WAS BELIEVED THAT THEY COULD NOT BE CONSIDERED AS AWARDS IN COURSE OF PAYMENT WITHIN THE MEANING OF THE FIRST PROVISO OF SECTION 303, AND AS AT THE TIME WHEN A CORRECTION WAS NECESSARY THE OLD METHOD OF DISTRIBUTION HAVING BEEN SWEPT ASIDE BY SUBSEQUENT LEGISLATION NO OTHER ALTERNATIVE PRESENTED ITSELF THAN TO HOLD THAT SECTION 303 WOULD THEN APPLY SO AS TO REQUIRE A LUMP-SUM PAYMENT OF THE PRESENT VALUE OF THE REMAINING INSTALLMENTS OF INSURANCE.

IN VIEW, HOWEVER, OF YOUR DECISION IN THE MATCHETT CASE, WITH PARTICULAR REFERENCE TO THE PHRASE "WHICH ARE IN COURSE OF PAYMENT," YOUR DECISION IS SOLICITED WHETHER DOCTRINE OF THE MATCHETT OPINION MAY BE EXTENDED TO THE TWO TYPE CASES HEREIN SUGGESTED AS DISTINGUISHED FROM THE CLASS OF CASES SPECIFICALLY CONSIDERED IN THE MATCHETT OPINION, NAMELY, THOSE IN WHICH AN AWARD HAD BEEN WITHHELD BECAUSE OF THE EXISTENCE OF SOME TEMPORARY LEGAL DISABILITY.

IT IS UNDERSTOOD THAT IN THE FIRST TYPE OF CASES AT LEAST ONE PAYMENT HAD BEEN MADE UNDER THE AWARD TO THE THREE BROTHERS ON THE BASIS OF THERE BEING FOUR BROTHERS. IF SO, THE PRINCIPLE ANNOUNCED IN THE MATCHETT CASE IS FOR APPLICATION. THAT IS TO SAY, AS THE AWARD WAS MADE ON THE BASIS OF FOUR BROTHERS AND PAYMENT MADE TO THREE OF THEM ACCORDINGLY, THE AWARD AS TO DISTRIBUTION WAS FINALLY COMPLETED, THERE REMAINING ONLY COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS OF THE BUREAU TO AUTHORIZE PAYMENT TO THE FOURTH BROTHER. THERE WAS NOTHING REMAINING TO BE DONE SUBSEQUENT TO THE ENACTMENT OF THE STATUTE WHICH IN ANY WAY AFFECTED THE VALIDITY OF THE AWARD ON THE BASIS OF THERE BEING FOUR BROTHERS. ACCORDINGLY, THE AWARD TO ALL FOUR BROTHERS MAY BE CONSIDERED AS AN ENTIRETY AND "IN COURSE OF PAYMENT" ON MARCH 4, 1925, SO AS TO AUTHORIZE PAYMENT TO THE FOURTH BROTHER, IF AND WHEN COMPLIANCE WAS MADE WITH THE PROCEDURAL REQUIREMENTS OF THE BUREAU.

OBVIOUSLY THE PRINCIPLE OF THE MATCHETT CASE WOULD NOT BE APPLICABLE TO AN INVALID AWARD TO SEVERAL DISTRIBUTEES BASED ON AN ERROR IN THE DISTRIBUTION OF INSURANCE EITHER BECAUSE OF A MISTAKE OF LAW OR BECAUSE OF THE DISCOVERY OF SOME RELATIVE ENTITLED TO A SHARE OF WHOM THE BUREAU HAD NO PREVIOUS KNOWLEDGE. IN SUCH A CASE THERE WAS IN FACT NO VALID AWARD MADE PRIOR TO THE PASSAGE OF THE ACT. ACCORDINGLY, IN THE SECOND TYPE OF CASES DESCRIBED IN YOUR SUBMISSION THE AWARD MAY NOT BE CONSIDERED "IN COURSE OF PAYMENT" ON MARCH 4, 1925.