A-31977, JULY 1, 1930, 10 COMP. GEN. 5

A-31977: Jul 1, 1930

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THERE WERE SAVED OR EXCEPTED FROM THE REQUIREMENT OF THE MAIN BODY OF THE SECTION FOR PAYMENT IN A LUMP-SUM OF THE VALUE OF THE REMAINING UNPAID INSURANCE INSTALLMENTS TO THE ESTATE OF THE INSURED UPON THE DEATH OF A BENEFICIARY. ONLY SUCH INDIVIDUAL AWARDS OR DISTRIBUTIVE SHARES UNDER ADMINISTRATION OF AN ESTATE OF A BENEFICIARY AS WERE ACTUALLY MADE AND IN COURSE OF PAYMENT ON MARCH 4. THE AMOUNTS FOUND DUE ANY ADDITIONAL DISTRIBUTEE OR BENEFICIARY WHOSE AWARDS WERE NOT IN COURSE OF PAYMENT ON MARCH 4. AS FOLLOWS: I HAVE THE HONOR TO REQUEST YOUR DECISION AS TO THE CLAIM OF BRANCH MILLER. IN MAKING THIS SUBMISSION CITATION IS MADE ONLY OF YOUR PRINCIPAL INTERPRETATIONS OF THIS SECTION SINCE JANUARY 5.

A-31977, JULY 1, 1930, 10 COMP. GEN. 5

VETERANS' BUREAU - INSURANCE - AWARDS IN COURSE OF PAYMENT UNDER THE PROVISO TO SECTION 303 OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF MARCH 4, 1925 (43 STAT. 1310), THERE WERE SAVED OR EXCEPTED FROM THE REQUIREMENT OF THE MAIN BODY OF THE SECTION FOR PAYMENT IN A LUMP-SUM OF THE VALUE OF THE REMAINING UNPAID INSURANCE INSTALLMENTS TO THE ESTATE OF THE INSURED UPON THE DEATH OF A BENEFICIARY, ETC., ONLY SUCH INDIVIDUAL AWARDS OR DISTRIBUTIVE SHARES UNDER ADMINISTRATION OF AN ESTATE OF A BENEFICIARY AS WERE ACTUALLY MADE AND IN COURSE OF PAYMENT ON MARCH 4, 1925, TO PERSONS THEN LEGALLY ENTITLED TO MONTHLY INSTALLMENTS IN SOME AMOUNT, CORRECTIONS THEREAFTER BEING AUTHORIZED IN INDIVIDUAL AWARDS THEN RUNNING, ON THE BASIS OF NEWLY DISCOVERED DISTRIBUTEES OF AN ESTATE OR TO CORRECT MISTAKES OF LAW, ONLY IN THE AMOUNT PAYABLE, AND THE AMOUNTS FOUND DUE ANY ADDITIONAL DISTRIBUTEE OR BENEFICIARY WHOSE AWARDS WERE NOT IN COURSE OF PAYMENT ON MARCH 4, 1925, SHOULD BE PAID IN A LUMP SUM TO THE ESTATE OF THE INSURED. 8 COMP. GEN. 337 MODIFIED.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, JULY 1, 1930:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF MAY 20, 1930, AS FOLLOWS:

I HAVE THE HONOR TO REQUEST YOUR DECISION AS TO THE CLAIM OF BRANCH MILLER, XC-145334, NOW PENDING BEFORE THIS BUREAU AND INVOLVING SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED. IN MAKING THIS SUBMISSION CITATION IS MADE ONLY OF YOUR PRINCIPAL INTERPRETATIONS OF THIS SECTION SINCE JANUARY 5, 1929, FOR THE REASON THAT YOUR DECISION OF THAT DATE (A- 25274) IS A MODIFICATION IN SEVERAL IMPORTANT PARTICULARS OF YOUR EARLIER DECISIONS. THEREFORE, ONLY THE FOLLOWING CITATIONS ARE MADE AT THIS TIME:

MAURICE E. PETTY, A-25274, JANUARY 5, 1929.

RAYMOND COPLEY, A-26744, MAY 4, 1929.

"TWENTY-FOUR CASES," A-26904, MAY 21, 1929.

RICHARD TATE EVANS, A-27241, JUNE 19, 1929.

HARRY ALBERT HARRIMAN, A-28490, SEPTEMBER 26, 1929.

MATTHEW F. GIBBONS, A-30421, MARCH 4, 1930.

IN THE PRESENT CASE THE ESSENTIAL FACTS ARE THAT THE INSURED WHILE IN SERVICE APPLIED FOR AND WAS GRANTED YEARLY RENEWABLE TERM INSURANCE IN THE SUM OF $10,000 FOR WHICH HIS MOTHER WAS THE DESIGNATED BENEFICIARY. THE INSURED DIED IN SERVICE ON DECEMBER 21, 1918, AND PAYMENTS WERE ACCORDINGLY MADE TO THE DESIGNATED BENEFICIARY WHO RECEIVED THEM UNTIL HER DEATH ON JANUARY 10, 1923. UNDER THE APPROPRIATE PROVISIONS OF THE WAR RISK INSURANCE ACT IN FORCE AT THE TIME OF THE MOTHER'S DEATH AND IN THE LIGHT OF EVIDENCE THEN SUBMITTED, IT WAS HELD THAT THE REMAINING TERM INSURANCE WAS PAYABLE IN SHARES OF ONE-THIRD EACH TO A BROTHER AND A SISTER OF THE FULL BLOOD AND IN SHARES OF ONE-SIXTH EACH TO TWO HALF- BROTHERS. THE SISTER OF THE FULL BLOOD DIED ON SEPTEMBER 8, 1924, AND WAS SURVIVED BY NINE CHILDREN; THAT IS, NINE NIECES AND NEPHEWS OF THE INSURED, OF WHOM SEVEN WERE MINORS WHEN THEIR MOTHER DIED. ONE OF THESE DIED ON JANUARY 23, 1929. THE BUREAU IS AT PRESENT CONFRONTED WITH THE DISTRIBUTION OF THE REMAINING TERM INSURANCE UNDER THE SHARE WHICH HAD BEEN AWARDED TO THE SISTER OF THE FULL BLOOD WHO DIED, AS ALREADY STATED, SEPTEMBER 8, 1924.

IT HAS BEEN SUGGESTED THAT THE TERM INSURANCE REMAINING UNDER THE SHARE AWARDED TO THE DECEASED SISTER OF THE FULL BLOOD SHOULD BE DIVIDED IN SHARES OF ONE-NINTH EACH AND SEVEN OF SUCH SHARES AWARDED TO THE GUARDIANS OF THE MINOR NIECES AND NEPHEWS, AND THE REMAINING TWO-NINTHS PAID TO THE ESTATE OF THE VETERAN UNDER SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED, UNTIL THE DEATH OF THE MINOR NEPHEW IN JANUARY, 1929, AT WHICH TIME THE PRESENT VALUE OF THE REMAINING INSURANCE UNDER THAT SHARE SHOULD BE PAID UNDER SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED. HAS ALSO BEEN SUGGESTED THAT THE ENTIRE ONE-THIRD SHARE OF THE REMAINING INSURANCE PAID TO THE SISTER OF THE FULL BLOOD SHOULD BE AWARDED UNDER SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED, IN ITS COMMUTED VALUE TO BE ASCERTAINED AS OF THE MONTHLY ENDING DATE SUCCEEDING THE DEATH OF THE DESIGNATED BENEFICIARY. THE THIRD PROPOSITION IS THAT THIS ONE- THIRD SHARE SHOULD BE DIVIDED ONE-NINTH EACH AND PAID TO THE RESPECTIVE NIECES AND NEPHEWS, OR THEIR REPRESENTATIVES, UNTIL THE DEATH OF THE MINOR ON JANUARY 23, 1929, AFTER WHICH THE ONE-NINTH OF THE ONE-THIRD SHARE SHOULD BE PAID UNDER SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED.

IT WOULD APPEAR UNDER YOUR CURRENT DECISIONS AS TO SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED, BEGINNING WITH THE PETTY DECISION IN JANUARY, 1929, HEREINBEFORE CITED, YOU HAVE LAID DOWN THE PRINCIPLE THAT AWARDS IN COURSE OF PAYMENT ON MARCH 4, 1925, EVEN THOUGH ERRONEOUS, MAY BE CONSIDERED AS WITHIN THE SAVING CLAUSE OF SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED, AND THAT THE AMOUNTS OF SUCH INCORRECT AWARDS ARE NOT REQUIRED TO BE PAID TO THE ESTATE OF THE INSURED IN A LUMP SUM, SO THAT THERE IS MERELY REQUIRED A CORRECTION OF THE ORIGINAL AWARD IN ORDER THAT THE PARTIES LEGALLY ENTITLED TO THE INSURANCE UNDER THE LAWS THEN IN FORCE MAY RECEIVE THE SAME. THOUGH YOUR INTERPRETATION OF SECTION 303, WORLD WAR VETERANS' ACT, 1924, AS AMENDED, HAS BEEN UNDOUBTEDLY MODIFIED BY THE DECISIONS HEREIN CITED, AT THE SAME TIME THIS MODIFICATION SEEMS PRINCIPALLY APPLICABLE TO THOSE CASES WHERE THERE WAS AN AWARD IN COURSE OF PAYMENT ON MARCH 4, 1925. IN THE PRESENT CASE YOUR ATTENTION IS ASKED TO THE FACT THAT NO AWARD OF THE SHARE OF THE INSURANCE WHICH HAD BEEN MADE TO THE DECEASED SISTER OF THE FULL BLOOD WAS IN COURSE OF PAYMENT ON MARCH 4, 1925. THIS CIRCUMSTANCE IS MENTIONED IN ORDER THAT YOU MAY GIVE IT DUE CONSIDERATION IN FORMULATING YOUR DECISION IN THE PRESENT CLAIM.

AN EXAMINATION OF THE COMPLETE RECORD IN THE CASE DISCLOSES ADDITIONAL FACTS NOT MENTIONED IN YOUR SUBMISSION WHICH MAY BE MATERIAL IN THE FINAL DISPOSITION OF THE CASE. IT IS DISCLOSED THAT THE VETERAN HAD ANOTHER SISTER, DORA HENDERSON, WHO PREDECEASED HIM, LEAVING SURVIVING HER TWO SONS, GEORGE AND WILLIE HENDERSON, WHO APPARENTLY WERE ALIVE ON JANUARY 10, 1923, DATE OF DEATH OF THE DESIGNATED BENEFICIARY, AS OF WHICH DATE THE REMAINING INSURANCE WAS ORIGINALLY DISTRIBUTED TO A BROTHER AND SISTER OF THE FULL BLOOD AND TWO HALF BROTHERS OF THE INSURED.

SECTION 303 OF THE WORLD WAR VETERANS' ACT AS AMENDED BY THE ACT OF MARCH 4, 1925 (43 STAT. 1310), PROVIDED IN PART AS FOLLOWS:

* * * IF THE DESIGNATED BENEFICIARY * * * SURVIVES THE INSURED AND DIES PRIOR TO RECEIVING ALL OF THE TWO HUNDRED AND FORTY INSTALLMENTS OR ALL SUCH AS ARE PAYABLE AND APPLICABLE, THERE SHALL BE PAID TO THE ESTATE OF THE INSURED THE PRESENT VALUE OF THE MONTHLY INSTALLMENTS THEREAFTER PAYABLE, SAID VALUE TO BE COMPUTED AS OF DATE OF LAST PAYMENT MADE UNDER ANY EXISTING AWARD: PROVIDED, THAT ALL AWARDS OF YEARLY RENEWABLE TERM INSURANCE WHICH ARE IN COURSE OF PAYMENT ON THE DATE OF THE APPROVAL OF THIS ACT SHALL CONTINUE UNTIL THE DEATH OF THE PERSON RECEIVING SUCH PAYMENTS, OR UNTIL HE FORFEITS SAME UNDER THE PROVISIONS OF THIS ACT. * *

IT WILL BE RECALLED THAT THE FIRST DECISIONS OF THIS OFFICE APPLYING THIS STATUTE LAID DOWN THE FOLLOWING BASIC PRINCIPLES:

(1) UNLESS AN AWARD WAS ACTUALLY MADE AND AT LEAST ONE INSTALLMENT PAID THEREUNDER PRIOR TO MARCH 4, 1925, THE AWARD WAS NOT "IN COURSE OF PAYMENT.' 5 COMP. GEN. 924.

(2) AWARDS TO ALL DISTRIBUTEES COLLECTIVELY SHOULD BE CONSIDERED AS AN ENTIRETY, NOT AS SEPARATE AND DISTINCT AWARDS TO EACH OF THE INDIVIDUAL DISTRIBUTEES, AND THAT IF ANY PORTION OF THE COLLECTIVE AWARD WAS NOT IN COURSE OF PAYMENT, THE ENTIRE AWARD TO ALL MIGHT NOT BE CONSIDERED AS IN COURSE OF PAYMENT ON MARCH 4, 1925. 5 COMP. GEN. 924. EXCEPTIONS WERE NOTED IN CASE OF INDIVIDUAL DISTRIBUTEES UNDER LEGAL DISABILITY.

(3) INVALID OR ILLEGAL AWARDS 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, MIGHT NOT BE CONSIDERED AS IN COURSE OF PAYMENT. 6 COMP. GEN. 152, 154.

THE FIRST PRINCIPLE ABOVE STATED HAS NEVER BEEN OVERRULED NOR MODIFIED BY THE SUBSEQUENT DECISIONS OF THIS OFFICE. BASED ON TWO COURT DECISIONS, THE CASES OF OGDEN STEVENS, ADMINISTRATOR V. UNITED STATES ET AL., AND HATCH ET AL. V. UNITED STATES, BOTH OF THE OTHER STATED PRINCIPLES WERE MODIFIED BY DECISION OF THIS OFFICE DATED JANUARY 5, 1929 (8 COMP. GEN. 337), IN THE CASE OF MAURICE E. PETTY, THE FIRST DECISION LISTED IN YOUR SUBMISSION WHEREIN IT WAS HELD THAT AWARDS TO EACH INDIVIDUAL DISTRIBUTEE OR BENEFICIARY SHOULD BE CONSIDERED AS SEPARATE AND DISTINCT IN APPLYING THE STATUTE, AND THAT ILLEGAL OR INVALID AWARDS, AS WELL AS LEGAL OR VALID AWARDS, SHOULD BE CONSIDERED AS IN COURSE OF PAYMENT WITHIN THE MEANING OF THE STATUTE, NECESSITATING CORRECTION IN THE CASE OF AN ILLEGAL OR INVALID AWARD, RATHER THAN PAYMENT IN A LUMP SUM TO THE ESTATE OF THE INSURED. HOWEVER, IN DECISION OF JUNE 10, 1930, A-30461, THIS LATTER PRINCIPLE BASED ON THE COURT DECISION IN THE HATCH CASE WAS NOT APPLIED WHERE AN ENTIRE DISTRIBUTION MADE PRIOR TO MARCH 4, 1925, WAS ILLEGAL BECAUSE NONE OF THE PERSONS TO WHOM DISTRIBUTION WAS MADE WAS EVER LEGALLY ENTITLED TO SHARE IN THE DISTRIBUTION.

WHILE THE FACTS IN THE HATCH CASE, ON WHICH THE COURT BASED ITS DECISION, AND THE BROAD APPLICATION THEREOF MADE IN THE DECISION OF THIS OFFICE DATED JANUARY 5, 1929, CASE OF MAURICE E. PETTY, WOULD APPEAR TO HAVE SANCTIONED SUCH A PROCEDURE, IT IS NOW BELIEVED THAT A PROPER APPLICATION OF THE STATUTE WOULD NOT JUSTIFY THE HOLDING THAT ANY ADDITIONAL INDIVIDUAL BENEFICIARIES WHO WERE NOT ACTUALLY RECEIVING INSURANCE IN MONTHLY INSTALLMENTS IN ANY AMOUNT ON MARCH 4, 1925, EXCEPT THOSE UNDER LEGAL DISABILITY, MAY RECEIVE AWARDS OF INSURANCE IN MONTHLY INSTALLMENTS AFTER MARCH 4, 1925, BY REASON OF CORRECTION OF AN ILLEGAL DISTRIBUTION ORIGINALLY MADE PRIOR TO THAT DATE.

ON THE CONTRARY, THE RULE MAY BE DEFINITELY STATED THAT THERE WAS SAVED BY THE PROVISO TO SECTION 303 ONLY SUCH INDIVIDUAL AWARDS AS WERE ACTUALLY MADE AND IN COURSE OF PAYMENT TO PERSONS LEGALLY ENTITLED TO MONTHLY INSTALLMENTS IN SOME AMOUNT ON MARCH 4, 1925, CORRECTIONS THEREAFTER BEING AUTHORIZED ON THE BASIS OF NEWLY DISCOVERED BENEFICIARIES, OR TO CORRECT MISTAKES OF LAW, ONLY IN THE AMOUNTS PAYABLE. WHILE THE DISCOVERY OF ADDITIONAL INDIVIDUAL DISTRIBUTEES SUBSEQUENT TO MARCH 4, 1925, OR CORRECTIONS OF MISTAKES OF LAW WHEREBY ADDITIONAL BENEFICIARIES SHOULD BE INCLUDED, NECESSITATE CORRECTIONS IN THE AMOUNTS OF THE MONTHLY INSTALLMENTS PAID TO LAWFUL DISTRIBUTEES OR BENEFICIARIES WHOSE AWARDS IN SOME AMOUNTS WERE IN COURSE OF PAYMENT ON MARCH 4, 1925, THE ADDITIONAL DISTRIBUTEES OR BENEFICIARIES THEMSELVES WOULD NOT BE ENTITLED TO MONTHLY INSTALLMENTS UNDER THE SAVING CLAUSE APPEARING IN SECTION 303, BECAUSE THEIR SHARES WERE NOT IN COURSE OF PAYMENT IN ANY AMOUNT ON THE DATE OF THE STATUTE, AND, ACCORDINGLY, THEIR SHARES SHOULD BE PAID TO THE ESTATE OF THE INSURED IN A LUMP SUM.

APPLYING THESE PRINCIPLES IN THE INSTANT CASE, IT MAY BE CONCLUDED THAT THE VALUE OF THE REMAINING INSURANCE BASED ON THE LAWFUL SHARE OF THE DECEASED SISTER OF THE VETERAN MENTIONED IN YOUR SUBMISSION, WHOSE NAME WAS IDA WATSON, AND WHO DIED SEPTEMBER 8, 1924, SHOULD BE PAID IN A LUMP SUM TO THE ESTATE OF THE VETERAN, BECAUSE NO PORTION THEREOF WAS ACTUALLY IN COURSE OF PAYMENT ON MARCH 4, 1925.

IF UPON INVESTIGATION IT IS FOUND THAT THE TWO SONS OF THE OTHER DECEASED SISTER, DORA HENDERSON, NOT MENTIONED IN YOUR SUBMISSION, WHO PREDECEASED THE VETERAN, SHOULD HAVE SHARED IN THE ORIGINAL DISTRIBUTION AFTER DEATH OF THE DESIGNATED BENEFICIARY, THEN THE MONTHLY INSTALLMENTS TO THE BROTHERS OF THE FULL BLOOD AND THE TWO BROTHERS OF THE HALF BLOOD, OF THE VETERAN, WHOSE AWARDS WERE IN COURSE OF PAYMENT ON MARCH 4, 1925, SHOULD BE ADJUSTED IN ORDER THAT THE PROPER AMOUNT IS PAYABLE, BUT ANY SHARE FINALLY DETERMINED TO HAVE BEEN DUE THE TWO SONS OF THE DECEASED SISTER, HAD THE ACT OF MARCH 4, 1925, NOT BEEN ENACTED, SHOULD BE PAID IN A LUMP SUM TO THE ESTATE OF THE INSURED.