A-27166, MAY 24, 1929, 8 COMP. GEN. 618

A-27166: May 24, 1929

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ON AN AGREED BASIS THAT HE WAS AT TIME OF REINSTATEMENT AND CONVERSION NOT PERMANENTLY AND TOTALLY DISABLED. IS ESTOPPED TO RECOVER ON HIS ORIGINAL TERM INSURANCE ON THE GROUND OF PERMANENT TOTAL DISABILITY SUSTAINED WHILE THAT CERTIFICATE WAS STILL IN FORCE. FROM FINDING THAT THE VETERAN WAS PERMANENTLY AND TOTALLY DISABLED AT TIME OF APPLICATION FOR REINSTATEMENT AND. NOT ENTITLED TO HAVE THE INSURANCE REINSTATED. COOK ARE STATED IN THE SUBMISSION TO BE AS FOLLOWS: FLOYD M. HE WAS HONORABLY DISCHARGED ON DECEMBER 17. COMPENSATION WAS CLAIMED BY THIS VETERAN ON OCTOBER 11. HE WAS RATED IN NOVEMBER. AT THIS DATE THE CURRENT DISABILITY RATING WAS TEMPORARY TOTAL. SO THAT THE VETERAN WAS THEN ELIGIBLE TO REINSTATE HIS LAPSED TERM INSURANCE UNDER SECTION 304 OF THE WORLD WAR VETERANS' ACT.

A-27166, MAY 24, 1929, 8 COMP. GEN. 618

VETERANS' BUREAU - INSURANCE - REINSTATEMENT AND CONVERSION A WORLD WAR VETERAN WHO HAD HIS WAR-RISK TERM INSURANCE REINSTATED AND CONVERTED UNDER SECTION 304 OF THE WORLD WAR VETERANS' ACT, ON AN AGREED BASIS THAT HE WAS AT TIME OF REINSTATEMENT AND CONVERSION NOT PERMANENTLY AND TOTALLY DISABLED, IS ESTOPPED TO RECOVER ON HIS ORIGINAL TERM INSURANCE ON THE GROUND OF PERMANENT TOTAL DISABILITY SUSTAINED WHILE THAT CERTIFICATE WAS STILL IN FORCE. THIS PRINCIPLE, HOWEVER, DOES NOT PRECLUDE THE VETERANS' BUREAU, DURING THE SIX MONTHS' CONTESTABLE PERIOD PROVIDED FOR BY SECTION 307 OF THE STATUTE, FROM FINDING THAT THE VETERAN WAS PERMANENTLY AND TOTALLY DISABLED AT TIME OF APPLICATION FOR REINSTATEMENT AND, THEREFORE, NOT ENTITLED TO HAVE THE INSURANCE REINSTATED.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, MAY 24, 1929:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF MAY 6, 1929, SUBMITTING FOR CONSIDERATION THE WAR-RISK INSURANCE CASE OF FLOYD M. COOK, C 1305005, AND REQUESTING RECONSIDERATION OF CERTAIN DECISIONS OF THIS OFFICE IN THE LIGHT OF A DECISION RENDERED DECEMBER 14, 1928, BY THE UNITED STATES CIRCUIT COURT OF APPEALS, EIGHTH CIRCUIT, IN THE CASE OF WILLIAM M. STEVENS V. UNITED STATES, 29 FED.REP./2D) 904.

THE FACTS IN THE CASE OF FLOYD M. COOK ARE STATED IN THE SUBMISSION TO BE AS FOLLOWS:

FLOYD M. COOK, C-1305005, ENTERED SERVICE ON SEPTEMBER 5, 1918. SEPTEMBER 12, 1918, WITHIN 120 DAYS OF HIS ENTRY INTO SERVICE, HE APPLIED FOR $10,000 TERM INSURANCE FOR WHICH HE DESIGNATED HIS WIFE AND MOTHER BENEFICIARIES FOR $5,000 EACH. HE WAS HONORABLY DISCHARGED ON DECEMBER 17, 1918, AND PERMITTED HIS TERM INSURANCE TO LAPSE FOR FAILURE TO PAY THE PREMIUMS THEREON SUBSEQUENT TO DISCHARGE.

COMPENSATION WAS CLAIMED BY THIS VETERAN ON OCTOBER 11, 1924, AND HE WAS RATED IN NOVEMBER, 1924: "NO DISABILITY FROM DISCHARGE TO OCTOBER 11, 1924, AND TEMPORARY TOTAL THEREAFTER FROM TUBERCULOSIS, SERVICE CONNECTED.' ON APRIL 5, 1927, THE VETERAN APPLIED FOR THE REINSTATEMENT AND CONVERSION OF $10,000 TERM INSURANCE. AT THIS DATE THE CURRENT DISABILITY RATING WAS TEMPORARY TOTAL, SO THAT THE VETERAN WAS THEN ELIGIBLE TO REINSTATE HIS LAPSED TERM INSURANCE UNDER SECTION 304 OF THE WORLD WAR VETERANS' ACT, FIRST, BECAUSE HIS DISABILITY WAS SERVICE CONNECTED; AND SECOND, BECAUSE HE WAS NOT THEN RATED PERMANENTLY AND TOTALLY DISABLED.

THE APPLICATION FOR REINSTATEMENT WITH THE RESULTANT CONVERSION WAS ACCEPTED BY THE BUREAU EFFECTIVE APRIL 1, 1927. PREMIUMS WERE REPORTED PAID THROUGH NOVEMBER, 1927. ON AUGUST 1, 1927, WITHIN SIX MONTHS AFTER THE REINSTATEMENT, THE VETERAN WAS FOUND PERMANENTLY AND TOTALLY DISABLED FROM JULY 21, 1926, A DATE PRIOR TO THE REINSTATEMENT. UPON FURTHER CONSIDERATION OF THE CASE ON FEBRUARY 24, 1928, THE EFFECTIVE DATE OF THE PERMANENT AND TOTAL DISABILITY WAS DECLARED TO BE JULY 21, 1926.

AS THE BUREAU, WITHIN SIX MONTHS FROM DATE OF ACCEPTANCE OF REINSTATEMENT, FOUND THE INSURED PERMANENTLY AND TOTALLY DISABLED FROM A DATE PRIOR TO ACCEPTANCE OF REINSTATEMENT, NO INSURANCE WOULD BE PAYABLE UNDER THE RULE ANNOUNCED IN SEVERAL DECISIONS OF THIS OFFICE TO THE EFFECT THAT A RATING OF PERMANENT TOTAL DISABILITY MADE BEFORE THE EXPIRATION OF THE PERIOD OF SIX MONTHS IMMEDIATELY FOLLOWING THE ACCEPTANCE OF THE APPLICATION FOR REINSTATEMENT, RETROACTIVELY EFFECTIVE AS OF A DATE PRIOR TO THE APPLICATION FOR REINSTATEMENT, HAS THE EFFECT OF NULLIFYING THE REINSTATEMENT. DECISION OF APRIL 21, 1927, A-17971, CASE OF FERRELL Y. LAWHON; DECISION OF AUGUST 6, 1927, A 17971, CASE OF JAKE DOHONEY; AND DECISION OF SEPTEMBER 29, 1927, A 19887, CASE OF FRANK BOEHLER, 7 COMP. GEN. 248.

THE PRESENT SUBMISSION SUGGESTS THAT THE PRACTICE ESTABLISHED UNDER SAID DECISIONS BE NOW ABANDONED BECAUSE OF THE DECISION OF THE COURT IN THE STEVENS CASE, SUPRA, IT APPARENTLY BEING ASSUMED THAT SAID DECISION IS IN CONFLICT WITH THE CITED DECISIONS OF THIS OFFICE.

I FIND NO CONFLICT BETWEEN THE COURT DECISION AND THE DECISIONS OF THIS OFFICE, SUPRA. THE CITED DECISIONS OF THIS OFFICE ALL INVOLVE APPLICATION OF SECTION 307 OF THE WORLD WAR VETERANS' ACT FIXING A PERIOD OF SIX MONTHS DURING WHICH REINSTATEMENTS MIGHT BE CONTESTED AND PROVIDING THAT AT THE END THEREOF THE INSURANCE REINSTATED BECAME INCONTESTABLE EXCEPT FOR FRAUD OR NONPAYMENT OF PREMIUMS. NEITHER THE FACTS IN THE STEVENS CASE NOR THE OPINION OF THE COURT THEREON DISCLOSE ANY APPLICATION OR CONSTRUCTION OF SECTION 307 OF THE STATUTE. THE DECISION IN THAT CASE RESTED ON A PRINCIPLE IN ESTOPPEL AS IS CLEARLY SHOWN BY THE FOLLOWING QUOTATION FROM THE SYLLABUS OF THE REPORTED DECISION:

WHERE WAR VETERAN HAD WAR-RISK INSURANCE POLICY REINSTATED UNDER WORLD WAR VETERANS' ACT 1924, SEC. 304 (38 U.S.C.A., SEC. 515), ON AGREED BASIS THAT HE WAS AT TIME NOT PERMANENTLY AND TOTALLY DISABLED, HE IS ESTOPPED TO RECOVER ON ORIGINAL CERTIFICATE ON GROUND OF TOTAL PERMANENT DISABILITY SUSTAINED WHILE THAT CERTIFICATE WAS STILL IN FORCE; AND SUCH ESTOPPEL IS ESTOPPEL BY CONTRACT, SINCE REINSTATED POLICY CONSTITUTED NEW CONTRACT BETWEEN PARTIES, IN VIEW OF ACT AUG. 9, 1921 (42 STAT. 147), AND AMENDMENTS.

THIS OFFICE IS ENTIRELY IN AGREEMENT WITH THE PRINCIPLE THUS ANNOUNCED BY THE COURT, WHICH, WHEN CONSIDERED IN THE LIGHT OF THE FACTS ON WHICH THE DECISION WAS BASED, DOES NOT PRECLUDE THE BUREAU, DURING THE SIX MONTHS' CONTESTABLE PERIOD PROVIDED FOR BY THE STATUTE, FROM FINDING THAT THE VETERAN WAS PERMANENTLY AND TOTALLY DISABLED AT TIME OF APPLICATION FOR REINSTATEMENT AND THEREFORE NOT ENTITLED TO HAVE THE INSURANCE REINSTATED. THAT QUESTION WAS NOT INVOLVED IN THE FACTS BEFORE THE COURT AND THE COURT EXPRESSED NO OPINION THEREON.

IN THE STEVENS CASE THERE WAS NO QUESTION AS TO THE VETERAN'S RIGHT TO THE INSURANCE, THE ONLY QUESTION BEING AS TO WHETHER ITS PAYMENT SHOULD BE UNDER THE TERMS OF THE ORIGINAL INSURANCE CONTRACT WHICH HAD LAPSED AT A TIME SUBSEQUENT TO THE BEGINNING OF THE PERMANENT TOTAL DISABILITY AS SUBSEQUENTLY CLAIMED BY THE INSURED, OR UNDER THE NEW CONTRACT WHICH WAS BASED ON THE ASSUMPTION THAT THE VETERAN WAS NOT PERMANENTLY AND TOTALLY DISABLED AT THE TIME SAID NEW CONTRACT WAS ENTERED INTO.

IN THE COOK CASE HERE PRESENTED, THERE IS NO FINDING NOR EVEN A CONTENTION THAT THE PERMANENT TOTAL DISABILITY BEGAN AT A TIME WHEN THE ORIGINAL INSURANCE WAS IN FORCE. THEREFORE, THE ONLY QUESTION INVOLVED IS WHETHER IN VIEW OF THE FACT THAT THE VETERAN WAS PERMANENTLY AND TOTALLY DISABLED ON AND PRIOR TO THE DATE OF HIS APPLICATION FOR THE NEW CONTRACT OF INSURANCE, ANY INSURANCE IS PAYABLE, THE NONEXISTANCE OF PERMANENT TOTAL DISABILITY AT TIME OF APPLICATION BEING PREREQUISITE TO THE VALIDITY OF SUCH NEW CONTRACT OF INSURANCE. THAT QUESTION MUST BE ANSWERED IN THE NEGATIVE.

ACCORDINGLY, UNDER THE RULE ANNOUNCED IN THE BOEHLER DECISION HEREINBEFORE CITED, NO INSURANCE SHOULD BE PAID IN THE CASE OF FLOYD M. COOK.