A-24740, NOVEMBER 6, 1928, 8 COMP. GEN. 239

A-24740: Nov 6, 1928

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AS FOLLOWS: I HAVE THE HONOR TO REQUEST YOUR DECISION IN THE CASE OF MR. WHICH IS PENDING BEFORE THE BUREAU FOR DETERMINATION. PREMIUMS ON THIS INSURANCE WERE PAID TO INCLUDE MAY. THE APPLICATION FOR REINSTATEMENT WAS MADE ON THE FORM IN USE FOR APPLICATIONS MADE WITHIN THREE MONTHS FROM DATE OF LAPSE. WAS QUALIFIED BY THE STATEMENT. PREMIUMS FOR THIS INSURANCE WERE PAID TO INCLUDE JULY. NO PREMIUMS WERE PAID FOR AUGUST AND SEPTEMBER. SO THAT NORMALLY THE INSURANCE WOULD HAVE LAPSED FOR FAILURE TO PAY THE PREMIUM DUE AUGUST 1. THE VETERAN WAS A COMMISSIONED RESERVE OFFICER. WAS CALLED TO ACTIVE DUTY ON SEPTEMBER 15. IT IS THEN APPARENT THAT AN INSUFFICIENT NUMBER OF PREMIUMS WERE PAID BEFORE THE OFFICER'S DEATH AND HIS INSURANCE AGAIN LAPSED.

A-24740, NOVEMBER 6, 1928, 8 COMP. GEN. 239

VETERANS' BUREAU - INSURANCE - LAPSE FOR NONPAYMENT OF PREMIUMS WHERE THE INSURED FAILS TO PAY INSURANCE PREMIUMS FOR TWO MONTHS BEFORE ENTRANCE INTO ACTIVE MILITARY SERVICE CAUSING THE INSURANCE TO LAPSE FOR NONPAYMENT OF PREMIUMS, THE DEDUCTION OF PREMIUMS FROM THE PAY OF THE INSURED AFTER ENTRANCE INTO THE ACTIVE MILITARY SERVICE AND THE REMITTANCE OF THE AMOUNT THEREOF BY THE MILITARY AUTHORITIES TO THE VETERANS' BUREAU, WHICH SUSPENDED THE PAYMENTS WITHOUT APPLICATION THEREOF AS INSURANCE PREMIUMS BECAUSE OF THE NONPAYMENT OF THE PRIOR PREMIUMS, DOES NOT CONSTITUTE SUCH AN UNCONDITIONAL ACCEPTANCE OF PREMIUM PAYMENTS AFTER DEFAULT AS TO ESTOP THE GOVERNMENT FROM QUESTIONING THE VALIDITY OF THE INSURANCE, BUT THE INSURANCE SHOULD BE CONSIDERED AS HAVING LAPSED FOR NONPAYMENT OF PREMIUMS PRIOR TO ENTRANCE OF THE INSURED INTO THE ACTIVE MILITARY SERVICE.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, NOVEMBER 6, 1928:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 6, 1928, AS FOLLOWS:

I HAVE THE HONOR TO REQUEST YOUR DECISION IN THE CASE OF MR. THEODORE JOSEPH MUNCHHOF, XC-1 393, 212, WHICH IS PENDING BEFORE THE BUREAU FOR DETERMINATION.

THE FACTS OF THE CASE MAY BE STATED AS FOLLOWS:

THE VETERAN WHILE IN THE SERVICE CARRIED $10,000.00 TERM INSURANCE IN FAVOR OF HIS MOTHER. PREMIUMS ON THIS INSURANCE WERE PAID TO INCLUDE MAY, 1926. IN JANUARY, 1927, THE VETERAN REINSTATED THE INSURANCE UNDER BUREAU REGULATIONS, BUT PAID PREMIUMS ONLY FOR THE MONTH OF REINSTATEMENT, AND THEREFORE HIS INSURANCE AGAIN LAPSED. ON JUNE 1, 1927, HE APPLIED FOR THE REINSTATEMENT OF HIS TERM INSURANCE AND FOR ITS CONVERSION INTO A FIVE- YEAR CONVERTIBLE TERM POLICY, IN WHICH HE DESIGNATED HIS WIFE AS BENEFICIARY. THE APPLICATION FOR REINSTATEMENT WAS MADE ON THE FORM IN USE FOR APPLICATIONS MADE WITHIN THREE MONTHS FROM DATE OF LAPSE. THE APPROVAL OF THE APPLICATION, EFFECTIVE JUNE 1, 1927, WAS QUALIFIED BY THE STATEMENT,"IF SUBMITTED WITHIN THREE MONTHS FROM DATE OF LAPSE.' PREMIUMS FOR THIS INSURANCE WERE PAID TO INCLUDE JULY, 1927, BUT NO PREMIUMS WERE PAID FOR AUGUST AND SEPTEMBER, 1927, SO THAT NORMALLY THE INSURANCE WOULD HAVE LAPSED FOR FAILURE TO PAY THE PREMIUM DUE AUGUST 1, 1927.

THE VETERAN WAS A COMMISSIONED RESERVE OFFICER, AIR SERVICE, UNITED STATES ARMY, AND WAS CALLED TO ACTIVE DUTY ON SEPTEMBER 15, 1927. THE TRANSCRIPT OF PAYMENTS FURNISHED BY THE WAR DEPARTMENT SHOWS THAT THIS OFFICER DEDUCTED PREMIUMS ON THE PAY ROLLS FOR SEPTEMBER, OCTOBER, NOVEMBER, AND DECEMBER, 1927, AND FOR JANUARY AND FEBRUARY, 1928, A PERIOD OF SIX MONTHS. THE VETERAN DIED WHILE IN THE ACTIVE SERVICE ON MARCH 26, 1928, HIS DEATH HAVING BEEN DUE TO ACCIDENTAL DROWNING WHILE UNCONSCIOUS FROM MULTIPLE WOUNDS INCURRED WHEN HIS AIRPLANE FELL IN SAN FRANCISCO BAY.

IF THE DEDUCTION MADE ON THE OFFICER'S SEPTEMBER PAY ROLL FOR PREMIUM COULD BE LEGALLY APPLIED TO THE PAYMENT OF THE AUGUST PREMIUM, IT IS THEN APPARENT THAT AN INSUFFICIENT NUMBER OF PREMIUMS WERE PAID BEFORE THE OFFICER'S DEATH AND HIS INSURANCE AGAIN LAPSED. IF, HOWEVER, THE PAYMENTS SIMPLY COVERED THE MONTHS FOR WHICH THEY WERE DEDUCTED, NAMELY, SEPTEMBER, 1927, TO FEBRUARY, 1928, INCLUSIVE, THEN, BECAUSE THE AUGUST PREMIUM WAS NOT PAID, THE REINSTATEMENT WAS NOT FULLY ACCOMPLISHED. IT SHOULD BE STATED, HOWEVER, THAT THE BUREAU CALLED THE ATTENTION OF THE OFFICER TO THE NONPAYMENT OF THE AUGUST PREMIUM AND THAT HE REPLIED THAT HE HAD DEDUCTED THE PREMIUMS FROM HIS PAY ROLL, SO THAT IT MAY BE INFERRED THAT THE OFFICER CONSIDERED THAT HE WAS COMPLYING WITH THE LAW. IN HIS LETTER STATING THAT THE PREMIUMS HAD BEEN DEDUCTED FROM HIS PAY ROLL THE OFFICER GAVE NOTICE OF A CHANGE OF ADDRESS, BUT WHEN THE BUREAU NEXT ADVISED HIM CONCERNING PAYMENT OF THE AUGUST, 1927, PREMIUM, THE BUREAU'S LETTER WAS SENT TO THE OFFICER'S OLD ADDRESS INSTEAD OF TO HIS NEW ONE AND NO REPLY THERETO WAS RECEIVED. ATTENTION IS ALSO CALLED TO THE FACT THAT THE GOVERNMENT ACCEPTED THE PREMIUMS COVERING SIX MONTHS AFTER THE APPLICATION FOR REINSTATEMENT OF THE INSURANCE.

IT IS STATED HEREINBEFORE THAT THIS COMMISSIONED RESERVE OFFICER WAS ON ACTIVE DUTY IN THE AIR CORPS, UNITED STATES ARMY, FROM SEPTEMBER 15, 1927, TO MARCH 26, 1928, THE DATE OF HIS DEATH. AS THIS PERIOD WAS MORE THAN FIFTEEN DAYS, IT WOULD SEEM THAT IF THE OFFICER'S INSURANCE HAD LAPSED FOR NONPAYMENT OF THE AUGUST, 1927, PREMIUM, AND WAS THEREFORE NOT IN FORCE, HE WOULD HAVE HAD THE RIGHT, DURING SAID PERIOD OF ACTIVE SERVICE, TO MAKE AN ORIGINAL APPLICATION FOR CONVERTED INSURANCE, PURSUANT TO THE DECISION MADE BY YOU ON JANUARY 28, 1926, IN THE CASE OF 2ND LIEUTENANT MANNING DAVID SEIL, A-12 (5 COMP. GEN. 542). ACCORDINGLY, THERE IS FOR YOUR CONSIDERATION THE QUESTION WHETHER, SINCE THIS OFFICER PAID PREMIUMS REGULARLY FROM SEPTEMBER, 1927, TO FEBRUARY, 1928, INCLUSIVE, IN MONTHLY AMOUNTS EQUIVALENT TO THOSE REQUIRED UPON AN ORIGINAL NEW APPLICATION FOR CONVERTED INSURANCE, IT MAY NOT BE HELD THAT HE MADE SUCH NEW APPLICATION AND THEREAFTER REGULARLY PAID THE NECESSARY PREMIUMS THEREON.

THE FACTS SEEM TO DISCLOSE CERTAIN EQUITIES IN FAVOR OF THE PAYMENT OF THE INSURANCE IN THIS CASE. I FEEL INCLINED TO MAKE SUCH PAYMENT IF I MAY DO SO LAWFULLY. WILL YOU, THEREFORE, ADVISE ME WHETHER PAYMENT MAY BE MADE?

IF PAYMENT MAY NOT BE MADE BY THE BUREAU AND YOU CONSIDER THIS CASE A PROPER ONE TO SUBMIT TO CONGRESS UNDER THE PROVISIONS OF THE ACT OF APRIL 10, 1928 (45 STAT. 413), IT IS REQUESTED THAT YOU MAKE SUCH SUBMISSION.

THE RECORDS IN THIS OFFICE AND THE VETERANS' BUREAU FILE IN THE CASE HAVE BEEN EXAMINED IN ORDER THAT THERE MAY BE FULLY CONSIDERED ALL MATERIAL FACTS IN THE CASE. THE RECORDS OF THIS OFFICE SHOW THAT ONE FACT STATED IN YOUR SUBMISSION IS IN ERROR, TO WIT, THAT THE INSURED DEDUCTED INSURANCE PREMIUMS FROM HIS PAY ACCOUNT FOR FEBRUARY, 1928. THERE IS IN THIS OFFICE THE ,PAY AND ALLOWANCE ACCOUNT" FOR THE MONTH OF FEBRUARY, 1928, SIGNED BY THE INSURED, FROM WHICH IT IS SHOWN HE MADE NO DEDUCTION OF INSURANCE PREMIUM AND THERE IS NO RECORD OF THE PREMIUM OTHERWISE HAVING BEEN PAID. CONSEQUENTLY, HE DEDUCTED INSURANCE PREMIUM FROM HIS PAY FOR ONLY FIVE CONSECUTIVE MONTHS INSTEAD OF SIX, AND THERE IS INVOLVED NO QUESTION FOR CONSIDERATION UNDER THE INCONTESTABLE CLAUSE OF THE STATUTE. IT IS UNDERSTOOD THAT UNDER THE REGULATIONS OF THE VETERANS' BUREAU, A PREMIUM DEDUCTED FROM THE PAY OF THE INSURED WHILE IN THE ACTIVE SERVICE PAYS IN ADVANCE FOR THE FOLLOWING MONTH. IF SO, IN THIS CASE PREMIUMS WERE AT LEAST TENDERED BY THE INSURED FOR THE MONTHS OF OCTOBER, NOVEMBER, AND DECEMBER, 1927, JANUARY AND FEBRUARY, 1928. BUT INSURANCE PREMIUMS WERE NOT TENDERED OR PAID BY THE INSURED FOR AUGUST OR SEPTEMBER, 1927, OR MARCH, 1928. THE FAILURE TO TENDER OR PAY THE PREMIUM FOR THE MONTH OF MARCH, 1928, WOULD NOT OF ITSELF HAVE CAUSED THE LAPSE OF THE POLICY SINCE THE INSURED DIED DURING THAT MONTH WHICH WAS IN THE GRACE PERIOD. AT DATE OF LAPSE, AUGUST 1, 1927, IT IS UNDERSTOOD THERE WAS NO RESERVED VALUE WHICH MIGHT HAVE BEEN APPLIED TO PAY PREMIUMS FOR THE MONTHS OF AUGUST AND SEPTEMBER, 1927.

BY LETTER DATED AUGUST 8, 1927, THE VETERANS' BUREAU ADVISED THE INSURED AS FOLLOWS:

IF THE JULY PREMIUM OF $7.60 ON THE CONVERTED INSURANCE WAS NOT PAID WITHIN 31 DAYS FROM JULY 1, THE INCLOSED FORM 744 SHOULD BE RETURNED PROPERLY EXECUTED WITH A REMITTANCE SUFFICIENT TO COVER THE JULY AND AUGUST PREMIUMS.

NO REPLY TO THIS LETTER APPEARS TO HAVE BEEN RECEIVED BY THE BUREAU. APPARENTLY, THE VETERANS' BUREAU HAD NO NOTICE OF THE INSURED'S ENTRANCE INTO THE ACTIVE SERVICE AND OF HIS ALLOTMENT OF PAY FOR INSURANCE PREMIUMS UNTIL SOMETIME IN NOVEMBER, 1927. PRIOR TO SUCH TIME THERE HAD BEEN SENT TO HIM BY THE BUREAU NOTICE OF PREMIUMS DUE FOR OCTOBER AND NOVEMBER, 1927, AND THE INSURED RETURNED THESE NOTICES, APPARENTLY SOMETIME IN NOVEMBER, WITH AN ACCOMPANYING NOTE TO THE EFFECT THAT THE PREMIUMS HAD BEEN DEDUCTED FROM HIS PAY. UNDER DATE OF NOVEMBER 28, 1927, THE INSURED WAS NOTIFIED BY THE BUREAU AS FOLLOWS:

INASMUCH AS DEDUCTIONS ARE BEING MADE FROM YOUR PAY VOUCHERS FOR INSURANCE PREMIUMS, PREMIUM NOTICES MAY BE DISREGARDED.

PREMIUMS ARE PAID ONE MONTH IN ADVANCE WHEN PAID BY DEDUCTIONS. THAT IS, DEDUCTIONS FROM YOUR PAY VOUCHERS FOR OCTOBER AND NOVEMBER WILL PAY THE NOVEMBER AND DECEMBER PREMIUMS.

IF YOU HAVE NOT AS YET FORWARDED REMITTANCES TO COVER THE AUGUST, SEPTEMBER, AND OCTOBER PREMIUMS, YOU SHOULD DO SO AS SOON AS POSSIBLE AND COMPLETE AND MAIL WITH THE INCLOSED FORM 744.

NO REPLY TO THIS LETTER APPEARS TO HAVE BEEN RECEIVED BY THE BUREAU.

REFERRING TO THE LAST SENTENCE OF THE FOURTH PARAGRAPH OF YOUR SUBMISSION, IT IS UNDERSTOOD THAT WHILE THE AMOUNTS OF PREMIUMS DEDUCTED FROM THE PAY OF THE INSURED WERE RECEIVED IN THE BUREAU, THAT THEY WERE NOT ACTUALLY APPLIED AS PREMIUMS, ACTION THEREON BEING SUSPENDED FOR THE REASON THAT AS HE HAD NOT PAID THE AUGUST AND SEPTEMBER PREMIUMS THE INSURANCE WAS CONSIDERED AS IN A STATE OF LAPSE UNTIL SUCH PREMIUMS HAD BEEN PAID.

IF NO DEDUCTIONS FROM PAY HAD BEEN MADE BY THE INSURED SUBSEQUENT TO HIS ENTRANCE INTO THE ACTIVE SERVICE IN SEPTEMBER, 1927, AND HE HAD NOT OTHERWISE PAID THE PREMIUMS, THE INSURANCE COULD NOT, OF COURSE, HAVE BEEN CONSIDERED AS IN FORCE AT DATE OF DEATH. CONSEQUENTLY, THE PRIMARY LEGAL QUESTION INVOLVED IS WHETHER THERE WAS ANY ACTION BY THE GOVERNMENT AS INSURER IN ACCEPTING THE AMOUNTS DEDUCTED FROM THE PAY OF THE INSURED FOR FIVE MONTHS AS PREMIUMS FOR THE FIVE MONTHS' PERIOD SUBSEQUENT TO THE TWO MONTHS FOR WHICH PAYMENTS WERE NOT PAID, WHICH WOULD OPERATE AS AN ESTOPPEL AND PREVENT THE GOVERNMENT FROM QUESTIONING THE VALIDITY OF THE INSURANCE ON THE BASIS THAT SUCH ACTION BY THE GOVERNMENT AS INSURER CONSTITUTED A WAIVER OF THE NONPAYMENT OF PREMIUMS FOR THE TWO MONTHS.

THE RULE IN COMMERCIAL LIFE INSURANCE CASES IS STATED IN 32 CORPUS JURIS, 1350, AS FOLLOWS:

A FORFEITURE OF THE POLICY FOR NONPAYMENT OF A PREMIUM OR ASSESSMENT WHEN DUE IS WAIVED BY AN UNCONDITIONAL ACCEPTANCE OF PAYMENT OF THE PREMIUM OR ASSESSMENT AFTER SUCH DEFAULT. * * *

THERE WERE CITED IN SUPPORT OF THIS RULE THE FOLLOWING FEDERAL CASES: GLOBE MUTUAL LIFE INSURANCE COMPANY V. WOLFF, 95 U.S. 326; ROBINSON V. MUTUAL RESERVE LIFE INSURANCE COMPANY, 182 FED.REP. 850; DUNCAN V. MISSOURI STATE LIFE INSURANCE COMPANY, 160 FED.REP. 646; MUTUAL RESERVE FUND LIFE ASSOCIATION V. TUCHFELD, 159 FED.REP. 833; AND TALBOTT V. METROPOLITAN LIFE INSURANCE COMPANY, 142 FED.REP. 694.

A RULE OR PRINCIPLE OF LAW APPLICABLE TO COMMERCIAL LIFE INSURANCE MAY NOT BE APPLIED TO WAR RISK INSURANCE IF IN CONFLICT WITH FEDERAL STATUTES AND REGULATIONS ISSUED PURSUANT THERETO CONTROLLING WAR RISK INSURANCE. SEE CASSARELLO V. UNITED STATES, 271 FED.REP. 436, 488, WHEREIN THE COURT STATED:

* * * A CONTRACT MADE IN PURSUANCE OF A FEDERAL STATUTE MUST BE CONSTRUED WITH REFERENCE TO SUCH STATUTE, AND CAN NOT BE CONTROLLED BY THE STATE LAWS AND DECISIONS. WATSON V. TARPLEY, 58 U.S. (18 HOW.) 517, 521; 15 L.ED. 509; CALHOUN MINING CO. V. AJAX, 182 U.S. 499; 21 SUP.CT. 885; 45 L.ED. 1200; LEWIS' SUTHERLAND ON STATUTORY CONSTRUCTION, VOL. 2, P. 1314.

SECTION 301 OF THE WORLD WAR VETERANS' ACT SPECIFICALLY PROVIDES THAT THE DIRECTOR SHALL PRESCRIBE THE TIME AND METHOD OF PAYMENT OF PREMIUMS ON WAR -RISK INSURANCE. ONE OF THE METHODS HE HAS PRESCRIBED IS THE ALLOTMENT- FROM-PAY SYSTEM--- THAT IS, AN ALLOTMENT OF THE PAY OF THE INSURED, IF IN ACTIVE MILITARY OR NAVAL SERVICE OF THE UNITED STATES, FOR THE PAYMENT OF THE INSURANCE PREMIUMS. SUCH AN ALLOTMENT IS NOT EQUIVALENT TO PAYMENT OF THE PREMIUM. 5 COMP. GEN. 208, AND CASES THEREIN CITED. ACTUAL DEDUCTION OF THE AMOUNT OF THE INSURANCE PREMIUM FROM PAY MAY BE CONSIDERED AS EQUIVALENT TO A TENDER OF THE PREMIUM, BUT MAY NOT BE CONSIDERED AS AN UNCONDITIONAL ACCEPTANCE OF THE PAYMENT OF THE PREMIUM BY THE GOVERNMENT WITHIN THE MEANING OF THE RULE OR PRINCIPLE OF LAW STATED ABOVE WITH RESPECT TO COMMERCIAL LIFE INSURANCE. OBVIOUSLY, WITH RESPECT TO PAYMENT OF PREMIUMS ON GOVERNMENT LIFE INSURANCE BY THE DEDUCTION-FROM-PAY METHOD, INVOLVING THE OPERATIONS OF TWO SEPARATE DEPARTMENTS OR BRANCHES OF THE GOVERNMENT, IT MAY NOT REASONABLY BE CONSIDERED THAT THE DEDUCTIONS FROM PAY AND THE REMITTANCE OF THE AMOUNT THEREOF BY THE PROPER MILITARY OR NAVAL AUTHORITIES TO THE VETERANS' BUREAU IPSO FACTO CONSTITUTES AN UNCONDITIONAL ACCEPTANCE BY THE GOVERNMENT IN ALL CASES. THE BUREAU APPARENTLY HAS NOT CONSIDERED SUCH ALLOTMENT PROCEDURE AS EQUIVALENT TO AN UNCONDITIONAL ACCEPTANCE OF THE PREMIUMS BY THE GOVERNMENT. IN THIS CASE THE FIVE MONTHS' DEDUCTIONS FROM PAY WERE NOT APPLIED AS PREMIUMS WHEN RECEIVED IN THE BUREAU, BUT ACTION THEREON WAS SUSPENDED BECAUSE THE INSURED HAD FAILED TO PAY HIS PREMIUMS FOR TWO MONTHS AND THE INSURANCE WAS CONSIDERED AS IN A STATE OF LAPSE. THE INSURED WAS NOTIFIED IN NOVEMBER THAT HE HAD NOT PAID THE AUGUST AND SEPTEMBER PREMIUMS, AND PRIOR TO HIS ENTRANCE INTO THE ACTIVE MILITARY SERVICE IN SEPTEMBER, 1927, HE MUST BE PRESUMED TO HAVE KNOWN HE HAD NOT PAID INSURANCE PREMIUMS FOR TWO MONTHS.

PAYMENT OF INSURANCE PREMIUMS IS ABSOLUTELY ESSENTIAL TO KEEP IN FORCE THE INSURANCE. WHATEVER MAY BE THE RULE OR PRINCIPLE OF AGENCY WITH RESPECT TO COMMERCIAL LIFE INSURANCE, NO VETERANS' BUREAU OFFICER OR EMPLOYEE, AS THE REPRESENTATIVE OF THE GOVERNMENT, WOULD BE AUTHORIZED, ACTUALLY OR CONSTRUCTIVELY, TO WAIVE PAYMENT OF TWO MONTHS' BACK PREMIUMS. SEE UNITED STATES V. LOVELAND, ET AL., 25 FED.REP. (2D) 447.

THEREFORE, EVEN IF IT COULD BE CONSIDERED THAT THE ABOVE-STATED RULE WITH RESPECT TO COMMERCIAL LIFE INSURANCE COULD BE APPLIED UNDER THE STATUTE AND REGULATIONS TO WAR RISK INSURANCE, STILL THERE COULD BE NO ESCAPE FROM THE CONCLUSION THAT THERE WAS NO ACTION BY THE GOVERNMENT AS INSURER THAT MAY BE CONSIDERED AS A WAIVER OF THE BACK PREMIUMS SO AS TO HAVE ESTOPPED THE GOVERNMENT FROM QUESTIONING THE VALIDITY OF THE INSURANCE. WITH RESPECT TO THE SUGGESTION CONTAINED IN YOUR SUBMISSION TO THE EFFECT THAT AS THE INSURED COULD HAVE MADE AN ORIGINAL APPLICATION FOR CONVERTED INSURANCE SUBSEQUENT TO HIS ENTRANCE INTO THE ACTIVE MILITARY SERVICE, AFTER WHICH PREMIUMS WERE DEDUCTED FROM HIS PAY, THERE MIGHT BE REASON FOR HOLDING THAT HE MADE A NEW APPLICATION FOR INSURANCE AND THEREAFTER REGULARLY PAID THE NECESSARY PREMIUMS THEREON, IT IS UNDERSTOOD THAT UNDER THE REGULATIONS OF THE VETERANS' BUREAU ISSUED PURSUANT TO LAW, A FORMAL APPLICATION FOR INSURANCE IS NECESSARY DURING THE FIRST 120 DAYS AFTER ENTRANCE INTO THE ACTIVE MILITARY SERVICE. UNDER SUCH CIRCUMSTANCES, THERE WOULD APPEAR TO BE NO BASIS FOR A HOLDING THAT THE MERE DEDUCTION OF PREMIUMS FROM PAY WHILE IN THE ACTIVE SERVICE IS EQUIVALENT TO A NEW OR ORIGINAL APPLICATION FOR INSURANCE, OR SUFFICIENT TO REVIVE A POLICY WHICH HAD LAPSED WHILE THE INSURED WAS NOT IN THE ACTIVE MILITARY SERVICE.

YOU ARE ADVISED, THEREFORE, THAT, UPON THE FACTS DISCLOSED, PAYMENT OF INSURANCE IN THIS CASE IS NOT AUTHORIZED.

WITH RESPECT TO YOUR REQUEST THAT THE CASE BE CONSIDERED FOR CERTIFICATION TO THE CONGRESS AS AN EQUITABLE CLAIM UNDER THE PROVISIONS OF THE ACT OF APRIL 10, 1928, 45 STAT. 413, IT IS APPARENT THAT A CLAIM FOR THE PAYMENT OF INSURANCE THAT HAD LAPSED FOR NONPAYMENT OF PREMIUMS DOES NOT COME WITHIN THE CLASS OF CLAIMS TO WHICH THE SAID ACT IS APPLICABLE. REFERENCE IS MADE TO DECISION OF SEPTEMBER 14, 1928, A-22060, CASE OF EMMETT ROBERT FELL, XC-168458.