A-19197, JULY 22, 1927, 7 COMP. GEN. 57

A-19197: Jul 22, 1927

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VETERANS' BUREAU - INSURANCE - AWARDS IN COURSE OF PAYMENT WHERE THERE WAS NO AWARD TO ALL OF THE DISTRIBUTEES ENTITLED TO SHARE UNDER A POLICY OF WAR-RISK INSURANCE PRIOR TO MARCH 4. ONLY TWO SEPARATE AWARDS WERE MADE TO TWO OF THE DISTRIBUTEES. IT CAN NOT BE HELD THAT THERE WAS AN AWARD IN COURSE OF PAYMENT WITHIN THE MEANING OF THE SAVING CLAUSE OF SECTION 303 OF THE WORLD WAR VETERANS' ACT. IS REQUESTED. FOLLOWING THE VETERAN'S DEATH AT A TIME WHEN THE INSURANCE WAS IN FORCE. AS THE RESULT OF WHICH IT WAS APPARENT THAT THE PERSON DESIGNATED WAS A COUSIN AND NOT A STEPSISTER AND SO DID NOT COME WITHIN THE PERMITTED CLASS OF BENEFICIARIES FOR YEARLY RENEWABLE TERM INSURANCE. TO ASCERTAIN THOSE RELATIVES SURVIVING THE INSURED WHO WERE WITHIN THE PERMITTED CLASS OF BENEFICIARIES IN ORDER TO DETERMINE A PROPER DISTRIBUTION OF THE TERM INSURANCE AS PROVIDED FOR UNDER SECTION 402 OF THE WAR RISK INSURANCE ACT.

A-19197, JULY 22, 1927, 7 COMP. GEN. 57

VETERANS' BUREAU - INSURANCE - AWARDS IN COURSE OF PAYMENT WHERE THERE WAS NO AWARD TO ALL OF THE DISTRIBUTEES ENTITLED TO SHARE UNDER A POLICY OF WAR-RISK INSURANCE PRIOR TO MARCH 4, 1925, BUT ONLY TWO SEPARATE AWARDS WERE MADE TO TWO OF THE DISTRIBUTEES, IT CAN NOT BE HELD THAT THERE WAS AN AWARD IN COURSE OF PAYMENT WITHIN THE MEANING OF THE SAVING CLAUSE 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 IN A LUMP SUM TO THE ESTATE OF THE INSURED.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, JULY 22, 1927:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF JULY 11, 1927, AS FOLLOWS:

IN CONNECTION WITH YOU DECISIONS OF MAY 20, 1926, AND AUGUST 23, 1926, IN THE CASE OF WILLIAM R. MATCHETT AND IN CONNECTION WITH YOUR DECISION OF MAY 6, 1927, IN THE CASE OF DAVIS BLANEY, DECEASED, C 113 159, ALL RELATING TO THE INTERPRETATION OF THE PHRASE"AWARDS IN COURSE OF PAYMENT" IN SECTION 303 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, MARCH 4, 1925, YOUR CONSIDERATION OF THE CASE OF IGNOS A. DUMBLAUSKAS, DECEASED, C-65 946, IS REQUESTED, BECAUSE THAT CASE RAISES A QUESTION RELATIVE TO THE PHRASE, JUST QUOTED, WHICH HAS NOT PREVIOUSLY BEEN PRESENTED TO YOU.

IGNOS DUMBLAUSKAS APPLIED IN SERVICE FOR $10,000 TERM INSURANCE FOR WHICH HE DESIGNATED AN ALLEGED STEPSISTER. FOLLOWING THE VETERAN'S DEATH AT A TIME WHEN THE INSURANCE WAS IN FORCE, THE BUREAU INSTITUTED AN INVESTIGATION, AS THE RESULT OF WHICH IT WAS APPARENT THAT THE PERSON DESIGNATED WAS A COUSIN AND NOT A STEPSISTER AND SO DID NOT COME WITHIN THE PERMITTED CLASS OF BENEFICIARIES FOR YEARLY RENEWABLE TERM INSURANCE. THE BUREAU THEN UNDERTOOK BY MAILING OF PROPER FORMS, AND BY OTHER MEANS, TO ASCERTAIN THOSE RELATIVES SURVIVING THE INSURED WHO WERE WITHIN THE PERMITTED CLASS OF BENEFICIARIES IN ORDER TO DETERMINE A PROPER DISTRIBUTION OF THE TERM INSURANCE AS PROVIDED FOR UNDER SECTION 402 OF THE WAR RISK INSURANCE ACT, AS AMENDED. ONE OF THE BUREAU FORMS, FORM 541, WAS EXECUTED IN MARCH, 1922, AND INDICATED THAT THE VETERAN WAS A RESIDENT OF NEW JERSEY AND WAS SURVIVED BY A FATHER, MOTHER, BROTHER, AND A SISTER, BUT THE FORM WAS NOT SUFFICIENT TO SHOW WHETHER THE SISTER WAS STILL LIVING. NO AWARD WAS MADE OF THE INSURANCE IN ANY AMOUNT AT THIS TIME, BUT A FURTHER INVESTIGATION WAS CONDUCTED AND AFTER A LONG CORRESPONDENCE COVERING APPROXIMATELY THREE YEARS WITH THE AUTHORITIES OF THE LITHUANIAN LEGATION, EVIDENCE WAS RECEIVED WHICH INDICATED THAT THE STATE OF RESIDENCE OF THE VETERAN WAS NOT NEW JERSEY, BUT NEW YORK AND THAT THE VETERAN WAS SURVIVED BY A FATHER, MOTHER, THREE SISTERS, AND ONE BROTHER. AT THIS TIME IT APPEARED THAT THE MOTHER HAD DIEDON APRIL 4, 1923, AND THAT ONE OF THE SISTERS HAD DIED ON FEBRUARY 6, 1919. INCIDENTALLY IT WAS THEN DISCOVERED THAT THE AGE OF THE VETERAN HAD NOT BEEN CORRECTLY STATED ON HIS APPLICATION FOR INSURANCE, SO THAT THE PREMIUMS WHICH WERE PAID BY HIM WHILE IN SERVICE WERE NOT SUFFICIENT TO HAVE COVERED $10,000 INSURANCE, BUT WERE ONLY ENOUGH TO COVER $9,955.

UPON DISCOVERY OF AUTHENTIC EVIDENCE AS TO THE SURVIVING RELATIVES AND AS TO THE VETERAN'S STATE OF RESIDENCE, THE BUREAU PROCEEDED TO SEND TO THE SURVIVING RELATIVES IN QUESTION THE NECESSARY AFFIDAVITS FOR PROOF OF THEIR RESPECTIVE CLAIMS, NAMELY, BUREAU FORMS 514, AND THESE FORMS WERE NOT RETURNED COMPLETELY EXECUTED TO THE BUREAU UNTIL AFTER MARCH 4, 1925. IT WAS DETERMINED, HOWEVER, THAT INASMUCH AS THE MOTHER OF THE VETERAN HAD DIED SUBSEQUENT TO THE VETERANS' DEATH AND INASMUCH AS A SISTER, ONA, HAD ALSO DIED SUBSEQUENT TO THE VETERAN THAT AN AWARD OF THE ACCRUED AMOUNTS DUE THESE DECEASED BENEFICIARIES MIGHT BE PAID AND SUCH PAYMENT WAS MADE PRIOR TO MARCH 4, 1925.

THE QUESTION PRESENTED IN THE PRESENT CASE, THEREFORE, IS WHETHER THE INSURANCE IN THIS CASE MAY FOR THE PURPOSES OF SECTION 303, WORLD WAR VETERANS' ACT, AS AMENDED, BE REGARDED AS IN COURSE OF PAYMENT IN THE LIGHT OF YOUR TWO DECISIONS IN THE MATCHETT CASE AND OF YOUR DECISION IN THE BLANEY CASE HEREINBEFORE CITED.

IN ALL THREE OF THESE DECISIONS YOU ENUNCIATED THE PRINCIPLE THAT IF AN AWARD OF THE INSURANCE DUE SUBSEQUENT TO THE VETERAN'S DEATH HAD BEEN PAID, EVEN TO THE EXTENT OF ONE INSTALLMENT, TO CERTAIN OF THE DISTRIBUTEES ENTITLED THERETO AND THE OTHER AWARDS HAD BEEN WITHHELD FOR VARIOUS REASONS SPECIFICALLY PRESENTED IN THE THREE OPINIONS IN QUESTION, THEN THE AWARDS MIGHT BE REGARDED AS AN ENTIRETY AND DISTRIBUTION MADE ON THE THEORY THAT THE INSURANCE WAS IN COURSE OF PAYMENT. IN THE PRESENT CASE AS DISTINGUISHED FROM THE CASES CITED, THE BUREAU IN FACT HAD MADE AN AWARD ONLY OF THE ACCRUED INSURANCE DUE TO TWO OF THE DISTRIBUTEES, WHO, WHILE SURVIVING THE VETERAN HAVE SINCE DIED, AND NO DISTRIBUTION OF THE INSURANCE ON THE BASIS OF THE INSTALLMENTS REMAINING AFTER THE DEATH OF THESE DISTRIBUTEES HAD BEEN MADE OR EVEN ATTEMPTED PRIOR TO MARCH 4, 1925.

YOUR DECISION, THEREFORE, IS REQUESTED WHETHER OR NOT THE BUREAU MAY REGARD THIS INSURANCE AS IN COURSE OF PAYMENT IN ORDER NOW TO PERMIT A DISTRIBUTION TO THE PERSONS ENTITLED WITHOUT REGARD TO SECTION 303 OF THE WORLD WAR VETERANS' ACT ON THE THEORY THAT THE INSURANCE WAS IN THE COURSE OF PAYMENT BY REASON OF AWARDS RUNNING ON MARCH 4, 1925, WHEN ALL THAT HAD BEEN AWARDED PRIOR TO THAT DATE WAS ONLY AN ACCRUED SUM DUE THE ESTATE OF TWO BENEFICIARIES, WHO, WHILE SURVIVING THE INSURED HAVE, NEVERTHELESS, SINCE DIED, AND WHEN NO AWARD TO ANY ONE ENTITLED AFTER THE DEATH OF SAID DECEASED BENEFICIARIES HAD BEEN ATTEMPTED.

THE DECISION OF MAY 20, 1926, IS REPORTED AT 5 COMP. GEN. 924 AND THE DECISION OF AUGUST 23, 1926, AT 6 COMP. GEN. 152.

REFERRING TO THE THIRD PARAGRAPH OF YOUR SUBMISSION, IF THE EVIDENCE FURNISHED IN BUREAU FORM NO. 514 WAS MATERIAL TO A PROPER DISTRIBUTION OF THE INSURANCE, IT MIGHT APPEAR THAT PAYMENT OF THE ACCRUED AMOUNTS DUE THESE TWO DECEASED BENEFICIARIES WAS PREMATURE, ANTICIPATING THAT THE EVIDENCE TO BE SUBMITTED BY THE REMAINING DISTRIBUTEES WOULD NOT AFFECT THEIR CLAIM. BUT, HOWEVER THAT MAY BE, IT IS AT LEAST CLEAR THAT NO PROPER AWARD WAS MADE PRIOR TO MARCH 4, 1925, OF ALL OF THE INSURANCE DUE UNDER THE POLICY. THEREFORE, IT CAN NOT BE HELD THAT THERE WAS IN THIS CASE AN AWARD IN COURSE OF PAYMENT ON MARCH 4, 1925, WITHIN THE SAVING CLAUSE 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. THE DISTINCTION BETWEEN THE CITED DECISIONS OF THIS OFFICE AND THE PRESENT MATTER IS THAT IN THE FORMER THE RIGHT OF ALL OF THE DISTRIBUTEES HAD BEEN DETERMINED FINALLY AND AN AWARD MADE IN THEIR FAVOR, PURSUANT TO WHICH DISTRIBUTION WAS MADE TO SOME OF THE BENEFICIARIES AND WITHHELD FROM OTHERS FOR REASONS WHICH DID NOT AFFECT THE VALIDITY OF THE AWARD; WHEREAS IN THE INSTANT CASE THERE WAS NO AWARD IN FAVOR OF ALL THE DISTRIBUTEES ENTITLED UNDER SECTION 402 OF THE WAR RISK INSURANCE ACT, OR OTHERWISE, BUT SEPARATE AWARDS APPEAR TO HAVE BEEN MADE IN FAVOR OF THOSE ENTITLED BECAUSE OF THE DEATH OF TWO OF THE DISTRIBUTEES.

YOU ARE ADVISED THEREFORE THAT THE INSURANCE MAY NOT BE CONSIDERED AS IN COURSE OF PAYMENT MARCH 4, 1925.