A-29723, JANUARY 16, 1930, 9 COMP. GEN. 291

A-29723: Jan 16, 1930

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IS NOW OPEN TO CONTEST. ON THE BASIS THAT THE INSURED WAS ALREADY PERMANENTLY AND TOTALLY DISABLED WHEN HE ATTEMPTED TO REINSTATE AND CONVERT HIS TERM INSURANCE. WOODALL WHILE IN MILITARY SERVICE APPLIED FOR AND WAS GRANTED $10. HE WAS HONORABLY DISCHARGED FROM SERVICE ON APRIL 23. THEREAFTER THE TERM INSURANCE WAS ALLOWED TO LAPSE FOR FAILURE TO PAY PREMIUMS AS DUE. AN APPLICATION WAS MADE FOR REINSTATEMENT AND CONVERSION OF THE FULL AMOUNT OF THE TERM INSURANCE TO A FIVE-YEAR CONVERTIBLE TERM POLICY. A LIEN IN THE SUM OF $791.00 WAS ESTABLISHED BY THE VETERAN UNDER THE THIRD PROVISO OF SECTION 304 TO MEET THE BACK PREMIUMS WITH INTEREST. AT THE TIME THE VETERAN EXECUTED HIS APPLICATION FOR REINSTATEMENT AND CONVERSION THERE WAS TENDERED TO A REGIONAL OFFICE OF THE BUREAU $13.50 IN CONNECTION WITH THIS REINSTATEMENT AND CONVERSION.

A-29723, JANUARY 16, 1930, 9 COMP. GEN. 291

VETERANS' BUREAU - INSURANCE WHERE THE VETERANS' BUREAU HAS HERETOFORE ESTABLISHED OR MAY HEREAFTER ESTABLISH THE CONDITION OF PERMANENT TOTAL DISABILITY AT OR PRIOR TO THE DATE OF ORIGINAL APPLICATION FOR INSURANCE, OR APPLICATION FOR REINSTATEMENT AND/OR CONVERSION OF INSURANCE, BY A RATING MADE AT ANY TIME PRIOR TO THE FIRST PAYMENT OF INSURANCE UNDER THE POLICY, THE INSURANCE SHOULD BE CONSIDERED AS INVALID AND NO PAYMENTS MADE THEREUNDER, LEAVING THE PARTIES IN INTEREST TO THEIR RECOURSE IN THE UNITED STATES COURTS AS PROVIDED BY STATUTE.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, JANUARY 16, 1930:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF DECEMBER 2, 1929, SUBMITTING FOR CONSIDERATION THE QUESTION WHETHER THE WAR RISK CONVERTED INSURANCE POLICY ISSUED IN FAVOR OF MABRY W. WOODALL, XC 1304060, IS NOW OPEN TO CONTEST, NECESSITATING DENIAL OF INSURANCE PAYMENTS, ON THE BASIS THAT THE INSURED WAS ALREADY PERMANENTLY AND TOTALLY DISABLED WHEN HE ATTEMPTED TO REINSTATE AND CONVERT HIS TERM INSURANCE.

YOU STATE THE FACTS TO BE AS FOLLOWS:

MABRY W. WOODALL WHILE IN MILITARY SERVICE APPLIED FOR AND WAS GRANTED $10,000 YEARLY RENEWABLE TERM INSURANCE FOR WHICH HE DESIGNATED HIS MOTHER SOLE BENEFICIARY. HE WAS HONORABLY DISCHARGED FROM SERVICE ON APRIL 23, 1919, AND THEREAFTER THE TERM INSURANCE WAS ALLOWED TO LAPSE FOR FAILURE TO PAY PREMIUMS AS DUE. ON JULY 2, 1927, AN APPLICATION WAS MADE FOR REINSTATEMENT AND CONVERSION OF THE FULL AMOUNT OF THE TERM INSURANCE TO A FIVE-YEAR CONVERTIBLE TERM POLICY, THE APPLICATION BEING MADE BY THE VETERAN UNDER THE PROVISIONS OF SECTION 304, WORLD WAR VETERANS' ACT, 1924, AS AMENDED. A LIEN IN THE SUM OF $791.00 WAS ESTABLISHED BY THE VETERAN UNDER THE THIRD PROVISO OF SECTION 304 TO MEET THE BACK PREMIUMS WITH INTEREST. AT THE TIME THE VETERAN EXECUTED HIS APPLICATION FOR REINSTATEMENT AND CONVERSION THERE WAS TENDERED TO A REGIONAL OFFICE OF THE BUREAU $13.50 IN CONNECTION WITH THIS REINSTATEMENT AND CONVERSION, $6.50 BEING INTENDED FOR THE PREMIUM ON THE TERM INSURANCE FOR THE LAPSED MONTH AND $7.00 BEING INTENDED FOR THE INITIAL PREMIUM ON THE CONVERTIBLE TERM POLICY. ON AUGUST 20, 1927, THE RECEIPT OF THE APPLICATION FOR REINSTATEMENT AND CONVERSION WAS ACKNOWLEDGED AND THE APPLICANT WAS THEN ADVISED TO CONTINUE PREMIUM PAYMENTS AS DUE WITHOUT FORMAL NOTICE FROM THE BUREAU. THE FILE, HOWEVER, DOES NOT SHOW THAT THE VETERAN WAS ADVISED THAT ANY TIME PRIOR TO AUGUST 20, 1927, TO CONTINUE THE REMITTANCE OF PREMIUMS, AND EVEN ON THAT OCCASION THERE WAS NOTHING SAID SPECIFICALLY AS TO THE PROPER AMOUNTS TO REMIT. ON AUGUST 30, 1927 A BROTHER OF THE VETERAN WROTE ASKING THE AMOUNT OF THE PROPER PREMIUM REMITTANCES, BUT NO DIRECT ANSWER TO THIS LETTER APPEARS IN THE FILE. ON SEPTEMBER 20, 1927, PREMIUMS FOR AUGUST AND SEPTEMBER WERE FORWARDED AND THE SUBSEQUENT PREMIUMS WERE REPORTED PAID AS DUE. ON OCTOBER 3, 1927, THE APPLICATION FOR REINSTATEMENT WAS MARKED ,ACCEPTABLE," AND A POLICY WAS ISSUED IN JANUARY, 1928. THE VETERAN DIED ON FEBRUARY 11, 1928, AND ON JANUARY 9, 1928, THE VETERAN WAS FOUND PERMANENTLY AND TOTALLY DISABLED FROM NOVEMBER 21, 1927, BY REASON OF TUBERCULOSIS. THE APPEAL GROUP ON CENTRAL OFFICE CASES ON JUNE 2, 1928, FOUND THE VETERAN PERMANENTLY AND TOTALLY DISABLED FROM APRIL 20, 1925, A DATE PRIOR TO THE APPLICATION FOR REINSTATEMENT AND CONVERSION. ON SEPTEMBER 10, 1928, THE DIRECTOR OF THE BUREAU APPROVED A RECOMMENDATION OF THE ADVISORY GROUP ON APPEALS OF AUGUST 23, 1928, WHICH CONFIRMED THE ONSET OF THE PERMANENT AND TOTAL DISABILITY FROM APRIL 20, 1925, TO THE DATE OF DEATH.

YOU THEN DISCUSS THE APPLICATION OF SEVERAL DECISIONS OF THIS OFFICE AS HAVING A BEARING ON THE QUESTION INVOLVED. YOU HAVE FORWARDED, ALSO, THE CLAIMS FOLDER IN THE CASE WHICH HAS BEEN CAREFULLY EXAMINED IN THE CONSIDERATION OF THE CASE.

UNDER SECTION 304 OF THE WORLD WAR VETERANS' ACT AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 799, THE PRIMARY CONDITION PRECEDENT TO REINSTATEMENTS AND CONVERSIONS OF THE LAPSED INSURANCE, ISSUED TO A VETERAN SUFFERING WITH A SERVICE-CONNECTED DISABILITY, IS THAT THE INSURED BE NOT PERMANENTLY AND TOTALLY DISABLED. IN ADDITION, SECTION 300 OF THE STATUTE INSURES AGAINST DEATH OR PERMANENT TOTAL DISABILITY, AND IF EITHER OF THESE HAS HAPPENED AT OR PRIOR TO APPLICATION FOR REINSTATEMENT, THERE IS NOTHING FOR THE GOVERNMENT TO INSURE.

THERE IS INVOLVED PRIMARILY THE RULE ANNOUNCED IN THE DECISION OF THIS OFFICE DATED MARCH 9, 1928, 7 COMP. GEN. 551, IN THE CASE OF PHILLIP MCNISH, C-710061, WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS):

THE HAPPENING OF PERMANENT TOTAL DISABILITY UNDER A RATING BY THE VETERANS' BUREAU EFFECTIVE FROM DATE OF EXAMINATION STOPS THE RUNNING OF THE PERIOD OF SIX MONTHS FIXED BY SECTION 307 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 627, AT THE END OF WHICH THE POLICY OF INSURANCE WOULD HAVE BECOME INCONTESTABLE; HENCE, IF PERMANENT TOTAL DISABILITY IS DETERMINED BY THE VETERANS' BUREAU TO HAVE OCCURRED LESS THAN SIX MONTHS AFTER AN ATTEMPTED REINSTATEMENT, IT IS LEGAL AND PROPER FOR THE GOVERNMENT TO FURTHER QUESTION THE HEALTH CONDITION OF THE INSURED AT THE TIME OF THE ATTEMPTED REINSTATEMENT, AND IF UPON REVIEW THE VETERANS' BUREAU FINALLY DETERMINES THE INSURED TO HAVE BEEN PERMANENTLY AND TOTALLY DISABLED AT THE TIME OF ATTEMPTED REINSTATEMENT, THERE HAS BEEN NO LAWFUL REINSTATEMENT AND PAYMENT OF THE INSURANCE IS NOT AUTHORIZED.

IN THE SUBSEQUENT RECONSIDERATION OF NOVEMBER 5, 1928, ON THE BASIS OF ADDITIONAL FACTS, IT WAS SPECIFICALLY STATED AS FOLLOWS:

THERE IS NO PURPOSE OR INTENT IN THIS DECISION TO MODIFY THE PRINCIPLE ANNOUNCED IN THE DECISION OF MARCH 9, 1928, SUPRA, ON THE BASIS OF THE FACTS THEN SUBMITTED IN THE CASE, BUT WHICH NOW APPEAR TO HAVE BEEN ERRONEOUS AND TO JUSTIFY A MODIFICATION OF THE CONCLUSION.

THE PRINCIPLE ABOVE QUOTED WAS APPLIED IN THE DECISION OF MAY 15, 1928, A -22638, IN THE CASE OF BURLEIGH ALBERT LUM, C-1270802, K 599403,AND OF JOHN F. ALDRED, C-1338343, WHEREIN IT WAS HELD THAT IF EITHER DEATH OR PERMANENT AND TOTAL DISABILITY OCCUR DURING THE 6 MONTH PERIOD FOLLOWING REINSTATEMENT OF INSURANCE, THE INCONTESTABILITY CLAUSE APPEARING IN SECTION 307 OF THE WORLD WAR VETERANS' ACT CEASES TO OPERATE AND THE GOVERNMENT IS NOT THEREAFTER LIMITED TO THE PERIOD OF SIX MONTHS TO CONTEST THE INSURANCE ON THE BASIS THAT THE INSURED WAS PERMANENTLY AND TOTALLY DISABLED WHEN MAKING APPLICATION FOR REINSTATEMENT.

IN DECISION OF OCTOBER 10, 1928, 8 COMP. GEN. 174, IN THE CASE OF JOSEPH M. GIBLIN, K-63028, IT WAS HELD (QUOTING FROM THE SYLLABUS):

THE INCONTESTABLE PERIOD DESCRIBED BY SECTION 307 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 627, MAY BE CONSIDERED AS BEGINNING FROM THE DATE A CONVERTED POLICY OF INSURANCE IS MADE EFFECTIVE UNDER REGULATIONS ISSUED BY THE DIRECTOR OF THE VETERANS' BUREAU PURSUANT TO STATUTE.

ON THIS BASIS IT WAS HELD THAT A RATING MADE AFTER THE EXPIRATION OF SUCH PERIOD OF CONTESTABILITY WAS WITHOUT EFFECT AS A CONTEST OF THE INSURANCE.

THE CONVERTED POLICY IN THE INSTANT CASE WAS MADE EFFECTIVE JULY 1, 1927, UNDER BUREAU REGULATIONS HAVING THE FORCE AND EFFECT OF LAW, AND THE FIRST RATING ESTABLISHING PERMANENT TOTAL DISABILITY WAS NOT MADE UNTIL JANUARY 9, 1928. IF THERE HAD BEEN NO LAPSE OF THE INSURANCE DURING THE SIX MONTHS' PERIOD FROM JULY 1 TO DECEMBER 31, 1927, IT MIGHT SUCCESSFULLY BE URGED THAT THE LAST QUOTED DECISION WOULD BE APPLICABLE TO SUSTAIN AN ALLOWANCE OF INSURANCE, BUT UNDER THE RULES AND REGULATIONS OF THE VETERANS' BUREAU, WHICH HAVE THE FORCE AND EFFECT OF LAW, THERE WAS A LAPSE OF THE INSURANCE AUGUST 1, 1927. THERE DOES NOT APPEAR SUFFICIENT EVIDENCE OF ADMINISTRATIVE IRREGULARITY TO SHIFT THE RESPONSIBILITY FOR THE LAPSE FROM THE INSURED TO THE GOVERNMENT. WHILE IT IS GOOD ADMINISTRATION UNDER INSURANCE LAWS TO KEEP THE INSURED ADVISED AS TO THE DUE DATE OF PREMIUMS AND ALL OTHER MATTERS WHICH MAY AFFECT HIS POLICY, A FAILURE OR DELAY IN ISSUING SUCH NOTICES DOES NOT OBLIGATE THE GOVERNMENT UNDER A POLICY WHICH HAS LAPSED FOR NONPAYMENT OF PREMIUMS. ASSUMING, WITHOUT DECIDING, THAT THE INSURANCE WAS, OR COULD HAVE BEEN, REINSTATED AS OF AUGUST 1, 1927, THERE WOULD APPEAR TO HAVE BEEN A TIMELY CONTEST OF THE INSURANCE UNDER THE RULE ABOVE QUOTED FROM THE DECISIONS OF THIS OFFICE, BY THE RATING MADE JANUARY 9, 1928, ESTABLISHING PERMANENT TOTAL DISABILITY DURING THE SIX MONTHS' PERIOD OF CONTESTABILITY.

EVEN IF THERE HAD BEEN NO LAPSE, AND THE FIRST RATING OF PERMANENT TOTAL DISABILITY NOT MADE UNTIL AFTER TERMINATION OF THE SIX MONTHS' PERIOD OF CONTESTABILITY, THERE WOULD REMAIN FOR CONSIDERATION AND APPLICATION SEVERAL RECENT DECISIONS OF THE COURTS WHICH HAVE A DIRECT BEARING ON THE QUESTION INVOLVED, TO WIT, EDWARD MARTIN NOLD V. UNITED STATES, NO. 1033, DECIDED BY THE DISTRICT COURT OF THE UNITED STATES, WITHIN AND FOR THE ST. JOSEPH DIVISION OF THE WESTERN DISTRICT OF MISSOURI; JAMES W. JORDON V. UNITED STATES, DECIDED NOVEMBER 12, 1929, BY THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT; PETER J. ANDERSON V. UNITED STATES, DECIDED BY THE SAME COURT NOVEMBER 13, 1929; AND UNITED STATES V. OSCAR GOLDEN, DECIDED BY THE UNITED STATES CIRCUIT COURT OF APPEALS, TENTH DISTRICT, AUGUST 1, 1929, 34 FED.REP. (2D) 367. THESE DECISIONS SEEM TO PLACE THE HAPPENING OF PERMANENT TOTAL DISABILITY ON EXACTLY THE SAME BASIS AS THE HAPPENING OF DEATH, AND IF EITHER HAS IN FACT OCCURRED PRIOR TO APPLICATION,REINSTATEMENT, OR CONVERSION OF INSURANCE, THERE IS NOTHING UNDER THE PROVISIONS OF THE WORLD WAR VETERANS' ACT ON WHICH TO ISSUE INSURANCE, AND IF, THROUGH A MISTAKE, A POLICY NEVERTHELESS HAS ISSUED TO ONE IN FACT DEAD OR PERMANENTLY AND TOTALLY DISABLED, THE GOVERNMENT MAY NOT BE OBLIGATED THEREUNDER. FOR INSTANCE, THERE MAY BE QUOTED FROM THE DECISION IN THE FIRST-MENTIONED CASE, THE FOLLOWING:

WHAT, THEN, IS THE QUESTION WHICH IS NOW FOR DETERMINATION? THE QUESTION IS, UNDER FACTS OF THAT KIND IS THE PLAINTIFF ENTITLED TO RECOVER AGAINST THE DEFENDANT, THE GOVERNMENT? WHAT DID THE GOVERNMENT INSURE HIM AGAINST? AGAINST TWO THINGS--- DEATH AND AGAINST HIS BECOMING TOTALLY AND PERMANENTLY DISABLED. NO ONE WOULD CONTEND, I SUPPOSE, THAT IF BY SOME TRICK OF FATE A POLICY OF INSURANCE WERE ISSUED ON A DEAD MAN, NO ONE WILL CONTEND THAT THEREAFTER HIS BENEFICIARIES COULD RECOVER ON THAT POLICY, BECAUSE THE INSURANCE IS AGAINST DEATH AFTER THE POLICY AND NOT BEFORE THE POLICY IS ISSUED. THE INSURANCE HERE IS AGAINST THE PLAINTIFF BECOMING TOTALLY AND PERMANENTLY DISABLED AFTER HE TAKES OUT THE CONTRACT, NOT AGAINST A FUTURE OF TOTAL AND PERMANENT DISABILITY WHICH HE HAD THERETO.

I HAPPEN TO HAVE IN MY POCKET A POLICY OF INSURANCE ON MY OWN BODY. HAVE JUST LOOKED AT THAT POLICY. IT CONTAINS ALSO A TOTAL AND PERMANENT DISABILITY PROVISION. THAT TOTAL AND PERMANENT DISABILITY PROVISION READS THAT THE POLICY SHALL BECOME PAYABLE IF THE INSURED BECOMES TOTALLY AND PERMANENTLY DISABLED, PROVIDED SUCH DISABILITY ORIGINATED AFTER THIS POLICY BECAME EFFECTIVE. WHILE THAT EXACT LANGUAGE DOES NOT APPEAR IN THE STATUTE WHICH PROVIDES FOR WAR RISK INSURANCE, THAT IS THE UNDOUBTED MEANING OF THE PHRASE,"AGAINST TOTAL AND PERMANENT DISABILITY," THAT MEANS AGAINST THE INSURED BECOMING TOTALLY AND PERMANENTLY DISABLED AFTER THE POLICY HAS BEEN TAKEN OUT.

A MAN WHO TAKES OUT A POLICY OF INSURANCE ON HIS HOUSE, FIRE INSURANCE ON HIS HOUSE, AS WE HAVE SAID IN ARGUMENT, CAN OBTAIN RECOVERY UPON THAT POLICY OF FIRE INSURANCE IF HIS HOUSE BURNS DOWN AFTER HE TAKES IT OUT, BUT IF IT DEVELOPS THAT HIS HOUSE WAS ALREADY BURNED DOWN BEFORE HE TOOK IT OUT, OF COURSE, HE CAN NOT RECOVER. A MAN WHO TAKES OUT A POLICY OF ACCIDENT INSURANCE, INSURING HIM AGAINST ACCIDENT, CAN OBTAIN RECOVERY, CAN HAVE RECOVERY ON THAT POLICY OF ACCIDENT INSURANCE IF HE LOSES AN EYE OR LOSES A HAND AFTERWARDS; BUT IF IT DEVELOPS HE HAD ALREADY LOST HIS HAND, ALREADY LOST HIS EYE, OF COURSE, HE CAN NOT RECOVER UPON SUCH A POLICY OF INSURANCE FOR SUCH AN ACCIDENT. EVERYBODY REALIZES THAT; THAT REQUIRES NO ARGUMENT, AND THAT IS FRANKLY CONCEDED BY COUNSEL FOR THE PLAINTIFF IN THIS CASE.

IN DECISION IN THE SECOND CITED CASE APPEARS THE FOLLOWING:

IF THE APPELLANT BECAME TOTALLY AND PERMANENTLY DISABLED AFTER HIS ENTRY INTO THE MILITARY SERVICE OF THE UNITED STATES AND BEFORE APPLICATIONS FOR THE POLICIES IN SUIT WERE MADE, AND BEFORE THE POLICIES ISSUED, THE CHARGE OF THE COURT WAS CORRECT, BECAUSE A POLICY OF INSURANCE DOES NOT ORDINARILY COVER A LOSS ALREADY SUFFERED. AS SAID BY THE ATTORNEY GENERAL OF THE UNITED STATES:

"IN CASES WHICH HAVE HERETOFORE ARISEN IN THE COURTS, I HAVE ADVISED THE BUREAU THAT THE INSURANCE IS COLLECTIBLE IF APPLIED FOR WITHIN THE TIME ALLOWED AND BEFORE EITHER TOTAL PERMANENT DISABILITY OR DEATH HAS ACTUALLY OCCURRED, AND HENCE IS NOT DEFEATED BY THE FACT THAT THE APPLICANT WAS MORTALLY ILL. HOWEVER, WHAT IS PROVIDED FOR IS A CONTRACT OF INSURANCE AGAINST SOMETHING THAT MAY HAPPEN AND NOT OF INDEMNITY FOR SOMETHING THAT HAS ALREADY HAPPENED. IF NO APPLICATION HAS BEEN MADE WHEN DEATH OCCURS, OF COURSE THERE IS NO INSURANCE; AND IF TOTAL PERMANENT DISABILITY HAS BEEN INCURRED, A FUTURE APPLICATION FOR INSURANCE CAN NOT COVER IT.' OPINIONS OF ATTORNEYS GENERAL, 534. IT WAS CONCLUDED IN SAID DECISION, AFTER DISCUSSING SECTION 307 OF THE STATUTE CONTAINING THE INCONTESTABLE CLAUSE, AND QUOTING FROM THE CONGRESSIONAL COMMITTEE REPORT THEREON, THAT:"IT IS MANIFEST THAT IT WAS THE PURPOSE OF CONGRESS TO LEAVE A POLICY OPEN TO CONTEST WHEN IT MATURED BEFORE IT HAD BEEN IN FORCE FOR THE PERIOD OF SIX MONTHS.' THAT IS TO SAY, IF THE INSURED WAS IN FACT DEAD OR PERMANENTLY AND TOTALLY DISABLED, AT THE DATE OF APPLICATION, REINSTATEMENT OR CONVERSION, OR AT ANY TIME THEREAFTER WITHIN THE SIX MONTHS PERIOD OF CONTESTABILITY, THE INSURANCE WAS SUBJECT TO SUBSEQUENT CONTEST.

UNDER THE THIRD CITED DECISION IT WAS HELD THAT A SOLDIER WHO WAS PERMANENTLY AND TOTALLY DISABLED PRIOR TO ORIGINAL APPLICATION FOR INSURANCE ACQUIRED NO RIGHT UNDER THE POLICY ISSUED ON THE BASIS OF HIS APPLICATION, THERE BEING CITED AND FOLLOWED THE CASE OF JORDON V. UNITED STATES, SUPRA.

FROM THE DECISION IN THE CASE OF UNITED STATES V. GOLDEN, THE FOLLOWING MAY BE QUOTED:

THE TRUTH ABOUT THE MATTER IS THAT IF EITHER PARTY HAD BELIEVED A MATURED CLAIM EXISTED, INSTEAD OF AN EXECUTORY TERM POLICY OF INSURANCE, THE NEW POLICY WOULD HAVE BEEN NEITHER APPLIED FOR NOR ISSUED. THE PARTIES CONTRACTED ON THE ASSUMPTION OF AN EXECUTORY TERM POLICY BEING STILL IN FORCE, WHEN AS A MATTER OF FACT IT HAD MATURED. THE CASE IS VERY SIMILAR TO A FIRE INSURANCE POLICY BEING ISSUED ON A BUILDING, WHICH UNKNOWN TO EITHER PARTY HAD ALREADY BEEN DESTROYED. THERE IS NOTHING TO WHICH THE RISK COULD ATTACH. SO IN THE CASE AT BAR, THE GOVERNMENT ISSUED A POLICY AGREEING TO PAY IN CASE OF FUTURE DISABILITY, WHEN THE DISABILITY EXISTED WHEN THE POLICY ISSUED. WILLISTON, IN HIS WORK ON CONTRACTS, DEVOTES A PART OF A CHAPTER TO MISTAKES AS TO THE SUBJECT MATTER OF CONTRACT, AND AT SEC. 1568 STATES THAT IF AN INSURANCE PREMIUM IS PAID ON THE ASSUMPTION THAT A RISK ATTACHES, AND NONE DOES BY REASON OF MUTUAL MISTAKE, THERE IS NO CONTRACT. * * *

THESE DECISIONS NOT ONLY SUSTAIN THE VIEWS OF THIS OFFICE, BUT GO FARTHER AND PLACE NO TIME LIMITATION ON THE VETERANS' BUREAU WITHIN WHICH THERE MAY BE DETERMINED THAT THE INSURED WAS IN FACT PERMANENTLY AND TOTALLY DISABLED WHEN ORIGINALLY APPLYING FOR INSURANCE OR APPLYING FOR REINSTATEMENT AND/OR CONVERSION THEREOF. THERE HAS NOT BEEN OVERLOOKED THE DECISION OF JENSEN V. UNITED STATES, 29 FED.REP. (2D) 951, WHICH WAS REVERSED NOVEMBER 12, 1929, BY THE CIRCUIT COURT OF APPEALS.

ACCORDINGLY, THE RULE MAY BE STATED THAT WHERE THE VETERANS' BUREAU HAS HERETOFORE ESTABLISHED OR MAY HEREAFTER ESTABLISH THE CONDITION OF PERMANENT TOTAL DISABILITY AT OR PRIOR TO DATE OF ORIGINAL APPLICATION FOR INSURANCE, OR APPLICATION FOR REINSTATEMENT AND/OR CONVERSION OF INSURANCE, BY A RATING MADE AT ANY TIME PRIOR TO THE FIRST PAYMENT OF INSURANCE UNDER THE POLICY, THE INSURANCE SHOULD BE CONSIDERED AS INVALID AND NO PAYMENTS MADE THEREUNDER, LEAVING THE PARTIES IN INTEREST TO THEIR RECOURSE IN THE UNITED STATES COURTS AS PROVIDED BY STATUTE.

THE ACTION OF THE VETERANS' BUREAU IN DENYING PAYMENTS OF INSURANCE IN THE INSTANT CASE MUST BE AND IS SUSTAINED.