A-95282, DECEMBER 8, 1938, 18 COMP. GEN. 516

A-95282, DECEMBER 8, 1938, 18 COMP. GEN. 516

VETERANS' ADMINISTRATION - JURISDICTION - WORLD WAR VETERANS' ACT LITIGATED INSURANCE CASES AND ATTORNEYS' FEES UNDER EXISTING STATUTES, FINALITY OF DECISION OF THE ADMINISTRATOR OF VETERANS' AFFAIRS IS LIMITED TO "ALL DECISIONS OF QUESTIONS OF FACTS AND LAW AFFECTING ANY CLAIMANT TO THE BENEFITS OF TITLES II, III, OR IV OF THIS ACT"--- WORLD WAR VETERANS' ACT, 1924, AS AMENDED--- AND DOES NOT EXTEND TO TITLE I, CONTAINING THE AUTHORITY FOR LITIGATION OF INSURANCE CASES, OR TITLE V, CONTAINING THE AUTHORITY FOR PAYMENT OF ATTORNEYS' FEES, AND IT MAY NOT BE PRESUMED SOLELY BECAUSE THE SUBJECT OF A LITIGATED CASE ARISES UNDER AN INSURANCE CONTRACT EXECUTED PURSUANT TO TITLE III THAT THE ADMINISTRATOR, AFTER THE CASE HAS GONE TO JUDGMENT, RETAINS THE RIGHT TO RENDER CONCLUSIVE DECISIONS OR TO AWARD THE INSURANCE OR ATTORNEYS' FEES CONTRARY TO THE PLAIN TERMS OF THE JUDGMENT. 17 COMP. GEN. 4, DISTINGUISHED; ID. 1119, AMPLIFIED. WHILE INSURANCE JUDGMENTS ARISING OUT OF LITIGATION AUTHORIZED IN INSURANCE CASES BY TITLE I, OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, ARE NOT OF THE CLASS WHICH THE ACT OF MARCH 3, 1875, 18 STAT. 481, AS AMENDED BY SECTION 13, TITLE II, OF THE ACT OF MARCH 3, 1933, 47 STAT. 1516, REQUIRES TO BE PAID UPON SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, BUT ARE SUCH AS UNDER EXISTING VETERANS' LEGISLATION MAY BE PAID BY THE VETERANS' ADMINISTRATION WITHOUT SUBMISSION TO THIS OFFICE FOR DIRECT SETTLEMENT OR AUDIT IN ADVANCE OF PAYMENT, NEVERTHELESS PAYMENT, IF SO MADE, OF SUCH AWARDS IS SUBJECT TO EXAMINATION OR AUDIT BY THE GOVERNMENT ACCOUNTING OFFICERS AFTER PAYMENT. AUDIT BY THE GOVERNMENT ACCOUNTING OFFICERS IN ADVANCE OF PAYMENT IS IN THE INTEREST OF THE UNITED STATES AND OTHERWISE AFFORDS PROTECTION TO DISBURSING OFFICERS WHO MAKE PAYMENTS IN ACCORDANCE WITH THE PREAUDIT CERTIFICATION, AND ALSO ELIMINATES THE NECESSITY FOR THE QUESTIONING OF IMPROPER PAYMENTS WITH ITS ACCOMPANYING CONSIDERATION AS TO THE LIABILITY OF THE DISBURSING OFFICER, THE LIABILITY OF THE CERTIFYING OFFICER, AND THE LIABILITY OF THE PAYEE TO REFUND A PAYMENT NOT LEGALLY DUE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, DECEMBER 8, 1938:

YOUR LETTER OF OCTOBER 21, 1938, IS AS FOLLOWS:

CAREFUL ANALYSIS HAS BEEN MADE OF YOUR DECISION OF JUNE 29, 1938, A 95282 (JESSE MCCAMPBELL REED, XC-223,368). IN ASKING YOUR FURTHER CONSIDERATION OF THE QUESTION INVOLVED IN THE REED CASE AS TO FINALITY OF DECISIONS OF THIS ADMINISTRATION WITH REFERENCE TO MATTERS PERTAINING TO WAR RISK INSURANCE, I HAVE NOTED YOUR POSITION THAT IN YOUR JUDGMENT THE LITIGATION IN THE REED CASE WAS NOT THE PRIMARY REASON FOR PAYMENTS TO THE BENEFICIARY SO THAT THE WORDING OF THE JUDGMENT ALLOWING ATTORNEYS TEN PERCENT OF FUTURE INSTALLMENTS WOULD BE LIMITED ONLY TO SUCH INSTALLMENTS AS WERE PAID TO THE PLAINTIFF DIRECTLY BECAUSE OF AND AS A RESULT OF THE JUDGMENT OF THE COURT. YOU HOLD IN EFFECT THAT IN THE REED CASE THE VETERAN'S POLICY WAS IN FORCE WHEN HE FILED SUIT FOR PERMANENT AND TOTAL DISABILITY BENEFITS AND THAT HE HAD PAID PREMIUMS SUBSEQUENT TO THE DATE OF THE JUDGMENT SO THAT THE ONLY QUESTION BEFORE THE COURT WAS WITH RESPECT TO THE PLAINTIFF'S RIGHT TO PERMANENT AND TOTAL DISABILITY. YOU STATE:

"THE RIGHT OF THE DESIGNATED BENEFICIARY TO DEATH BENEFITS IS IN NOWISE DEPENDENT UPON THAT JUDGMENT, THE ONLY EFFECT OF THE JUDGMENT ON SUCH BENEFITS BEING THE REDUCTION OF THE AMOUNT OF INSURANCE TO THE EXTENT OF THE NUMBER OF DISABILITY INSTALLMENTS PAID TO THE VETERAN.'

MAY I SUGGEST ON THE FACTS OF THE REED CASE IN WHICH PREMIUMS WERE PAID THROUGH FEBRUARY 1934, THE VETERANS' ADMINISTRATION DID NOT MAKE A FINDING OF PERMANENT AND TOTAL DISABILITY. THAT FINDING WAS ESTABLISHED AS A RESULT OF THE LITIGATION WHICH, COUPLED WITH THE DEATH OF THE INSURED, SERVED THEREBY TO MATURE THE ENTIRE CONTRACT. WITHOUT A FINDING OF PERMANENT AND TOTAL DISABILITY, EITHER BY THE VETERANS' ADMINISTRATION OR AS THE RESULT OF THE JUDGMENT, AND IF PREMIUMS HAD NOT BEEN PAID BEYOND 1934, AND THE VETERAN HAD SUBSEQUENTLY DIED AT A TIME WHEN THE CONTRACT HAD LAPSED, OBVIOUSLY THE FULL AMOUNT OF THE POLICY WOULD NOT HAVE BEEN PAID. I SUBMIT THAT THERE IS NO WARRANT FOR INDULGING IN A PRESUMPTION THAT THE VETERAN IN THE REED CASE WOULD HAVE KEPT HIS CONTRACT OF INSURANCE IN EFFECT UNDER PREMIUM PAYING CONDITIONS SO THAT THE BENEFICIARY THEREBY WOULD HAVE RECEIVED THE SAME BENEFIT, IRRESPECTIVE OF THE COURT'S DECISION ESTABLISHING PERMANENT AND TOTAL DISABILITY. IF ONE IS TO INDULGE IN THE PRESUMPTION THAT THE VETERAN WOULD HAVE KEPT HIS INSURANCE IN FORCE THERE WOULD BE OPENED A FIELD FOR OTHER POSSIBILITIES. SUPPOSE, FOR EXAMPLE, THE VETERANS' ADMINISTRATION SUBSEQUENTLY FOUND THAT PERMANENT AND TOTAL DISABILITY NO LONGER EXISTED. THEN ONE COULD NOT NECESSARILY PRESUME THAT THE VETERAN WOULD HAVE RESUMED PAYMENTS OF THE PREMIUMS ON THE REMAINING INSURANCE. ALSO, SINCE PREMIUMS CEASED AFTER THE JUDGMENT WAS RENDERED, THE INSURANCE WOULD HAVE LAPSED WERE IT NOT FOR THE JUDGMENT, AND IF, WITHOUT THE JUDGMENT FINDING, THE VETERAN HAD ATTEMPTED TO REINSTATE, AND HIS CONDITION, AT THE TIME OF APPLICATION FOR REINSTATEMENT HAD BEEN FOUND TO BE AS THE COURT FOUND IT, TO WIT, TOTAL AND PERMANENT DISABILITY, THE REINSTATEMENT WOULD HAVE BEEN DENIED. WOULD SEEM THEREFORE, THAT THE DISTINCTION WHICH YOU SEEK TO DRAW BETWEEN THE REED CASE AND THE OTHER CASES CITED BY YOU DOES NOT GO TO THE MERITS OF THE QUESTION.

THE CONTRACT IN THE REED CASE WAS PAID ONLY BECAUSE OF THE JUDGMENT AND THE FACT THAT THE VETERAN MAY HAVE DIED BEFORE HE RECEIVED 240 INSTALLMENTS OF PERMANENT AND TOTAL DISABILITY BENEFITS, LEAVING THE REMAINDER OF THIS NUMBER OF PAYABLE TO THE BENEFICIARY, DOES NOT ALTER THE FACT THAT THE BENEFICIARY WOULD HAVE TAKEN NOTHING HAD IT NOT BEEN FOR THE JUDGMENT OF THE COURT IN THE OBTAINING OF WHICH THE ATTORNEYS RENDERED SERVICE FOR WHICH THE COURT ALLOWED THEM THE LEGAL FEE.

IT IS INDISPUTABLE, AS YOU WELL POINT OUT, THAT ATTORNEY FEES ARE PROVIDED BY SECTION 500 OF TITLE V OF THE WORLD WAR VETERANS' ACT; THAT SUITS ARE BROUGHT PURSUANT TO SECTION 19 OF TITLE I OF SAID ACT, WHEREAS SECTION 5 OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, DEALING WITH FINALITY OF THE DECISIONS OF THE VETERANS' ADMINISTRATION, DOES NOT MENTION EITHER TITLE I OR TITLE V. NOT ONLY HAS THIS POINT NOT BEEN OVERLOOKED BY THE VETERANS' ADMINISTRATION IN ITS CONSIDERATION OF THIS CASE BUT RATHER IS IT LARGELY, UPON CONSIDERATION THEREOF, THAT OUR VIEWS ARE PREDICATED. SECTION 5 PROVIDES IN ITS PART PERTINENT TO THIS QUESTION THAT:

"* * * ALL DECISIONS OF QUESTIONS OF FACT AND LAW AFFECTING ANY CLAIMANT TO THE BENEFITS OF TITLES * * * III * * * OF THIS ACT SHALL BE CONCLUSIVE EXCEPT AS OTHERWISE PROVIDED HEREIN. * * "

TITLES I AND V WHEN INVOLVED AT ALL BY ACT OF THE PARTIES IN THE ADJUDICATION OF AN INSURANCE CLAIM--- AND THE TERM ADJUDICATION IS USED IN THE SENSE OF COVERING ALL ACTION BETWEEN APPLICATION FOR AND PAYMENT OF BENEFITS UNDER THE INSURANCE CONTRACT--- ARE INEXTRICABLY INTERWOVEN WITH THE PROVISIONS OF TITLE III, AND PARTICULARLY IS THIS SO IN THE INSTANT CASE. UPON THE DEATH OF AN INSURED IN RECEIPT OF MONTHLY INSURANCE INSTALLMENTS FOUNDED UPON A JUDGMENT OF PERMANENT AND TOTAL DISABILITY, THE BENEFICIARY'S ENTITLEMENT TO THE REMAINING INSTALLMENTS PROVIDED BY THE CONTRACT MUST THEN BE DETERMINED. THE BENEFICIARY'S RIGHT TO INSTALLMENTS GROWS OUT OF TITLE III, BASICALLY, AND IS AFFECTED BY TITLES I AND V, ONLY SECONDARILY. AND THIS IS TRUE AS TO ANY RIGHTS ACQUIRED BY THE ATTORNEY. IF, UNDER THESE CIRCUMSTANCES AND AT THIS POINT, THE BENEFICIARY BE AGGRIEVED BY A FINDING OF THE VETERANS' ADMINISTRATION ON A CLAIM FOR THE REMAINING VALUE OF THE INSURANCE, THE FORUM FOR REVIEW AND RECONSIDERATION IS SPELLED OUT BY SECTION 19 OF TITLE I, AND THAT FORUM IS THE COURTS OF THE UNITED STATES AND NOT, IN MY JUDGMENT, THE OFFICE OF THE COMPTROLLER.

PARAPHRASING WHAT HAS BEEN JUST HEREINBEFORE SAID, THE FINDING OF THE VETERANS' ADMINISTRATION ON THE RIGHTS OF THE BENEFICIARY IN THIS CASE TO FULL OR PARTIAL PAYMENTS OF THE REMAINING INSTALLMENTS IS FINAL "EXCEPT AS OTHERWISE PROVIDED" (SECTION 19 OF TITLE I; UNDER THE TERMS OF WHICH THE BENEFICIARY MAY PRESENT HER CAUSE TO THE UNITED STATES COURTS). THE SAME IS EQUALLY TRUE OF A DECISION CONCERNING THE ATTORNEY'S RIGHTS IF HE SHOULD NOT ACCEPT AS FINAL A FINDING BY THE VETERANS' ADMINISTRATION.

THE POINT WHICH I DESIRE TO STRESS IS THAT THE RIGHT TO APPLY FOR INSURANCE, WITH THE AUTHORITY OF THE GOVERNMENT TO ISSUE THAT INSURANCE, IS NOT DISTINCT AND SEPARABLE FROM THE RIGHT TO SUE ON A CONTRACT OF INSURANCE WHERE THERE IS A QUESTION AS TO THE RIGHT OF ATTORNEYS TO RECEIVE A LEGAL FEE. I AM UNABLE TO AGREE WITH YOU IN WHAT I UNDERSTAND TO BE YOUR POSITION, TO WIT, THAT THE DECISIONS OF THE VETERANS' ADMINISTRATION ARE LIMITED TO INSURANCE MATTERS WHOLLY INDEPENDENT OF LITIGATION AND FEES. SECTION 17 OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, PERTAINING TO CONVERTED INSURANCE, AND THE PRECEDING SECTION DEALING WITH TERM INSURANCE, MAKE IT PLAIN THAT WHENEVER A JUDGMENT HAS BEEN OBTAINED UPON AN INSURANCE CONTRACT THE PAYMENTS ARE TO BE MADE IN ACCORDANCE WITH THE AWARDS OF THE DIRECTOR (ADMINISTRATOR).

YOU NOW STATE THAT YOUR DECISION OF JULY 6, 1937, A-27645, 17 COMP. GEN. 4, WAS NOT BASED UPON ANY FINALITY OF THE ACTION OF THE VETERANS' ADMINISTRATION BUT BECAUSE THE GOVERNMENT IN THE CASES THEREIN DISCUSSED WOULD HAVE OBTAINED A FULL ACQUITTANCE UNDER THE ASSIGNMENTS. THE DECISION IN QUESTION QUOTES IN FULL THE SUBMISSION OF JUNE 7, 1937. YOU THEN QUOTE, IN PART, SECTION 500 OF TITLE V AND SECTION 5 OF TITLE I OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED. YOUR DISCUSSION FOLLOWED IN THE FINAL PARAGRAPHS, TWO IN NUMBER, IN WHICH YOU SUGGEST ATTENTION TO THE FACT, WHICH WAS NOT DISPUTED, THAT THE ALLOWANCE OF ATTORNEY FEES WAS CONTAINED IN TITLE V AS DISTINGUISHED FROM TITLES II, III, OR IV, BUT YOU CONCLUDE THAT SINCE THE RESPONSIBILITY FOR SUCH DETERMINATION AS THE VETERANS' ADMINISTRATION DEEMED TO BE WITHIN THE PURVIEW OF SECTION 5 RESTED UPON ME, YOU WOULD NOT OBJECT TO THE ASSIGNMENTS PROVIDED THAT I FOUND THE RECOGNITION THEREOF WAS "NECESSARY TO EFFECTUATE THE PURPOSES OF THE INSURANCE STATUTE * * *.'

YOUR DECISION REFERRED TO THE CASE OF MARTIN V. NATIONAL SURETY COMPANY, 81 L.ED. 822, DECIDED BY THE UNITED STATES SUPREME COURT, MARCH 29, 1937, PRESUMABLY AS NOW SEEMS CLEAR, BECAUSE OF THE DISCUSSION THEREIN OF THE QUESTION OF ACQUITTANCE. IT SEEMED, AND NOW SEEMS, THAT SAID QUESTION WAS SECONDARY, IN THAT OPINION, TO THE QUESTION WHO WAS TO DECIDE THE PROPRIETY OF THE ASSIGNMENT AND, AS I HAVE PREVIOUSLY POINTED OUT, SINCE THE DECISIONS OF THE ADMINISTRATOR UNDER SECTION 5 OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, ARE FINAL (SUBJECT TO SECTION 19), THE DECISION OF THE UNITED STATES SUPREME COURT IN THE MARTIN CASE WOULD GIVE TO THE VETERANS' ADMINISTRATION UNDER THE PRESENT CIRCUMSTANCES THE RIGHT TO DETERMINE THE PROPRIETY OF AN ASSIGNMENT.

I HAVE ALSO NOTED YOUR DISCUSSION OF THE CATHCARD CASE, PARTICULARLY YOUR EXPRESSION "THERE IS NOT BEFORE THE COURT IN THAT CASE ANY QUESTION OF INSURANCE * * *.' AGAIN I AM UNABLE TO AGREE WITH THE DISTINCTION WHICH YOU SEEK TO MAKE IN THIS PARTICULAR BECAUSE THERE WAS INSURANCE INVOLVED IN THE CATHCARD CASE AND THE REASON WHY YOUR OFFICE WAS JOINED IN THE PROCEDURE WAS BECAUSE THE AWARDS THEREOF IN THE CATHCARD CASE HAD BEEN APPROVED BY YOUR REPRESENTATIVES. I FEEL STRONGLY THAT THE POSITION WHICH YOU ASSUMED IN YOUR LETTER DATED JUNE 29, 1938, CANNOT BE RECONCILED WITH THE STATEMENT WHICH YOU HAVE MADE IN CONNECTION WITH THE CATHCARD CASE IN A LETTER OF APRIL 12, 1938, A 92787, ADDRESSED TO HONORABLE DAVID A. PINE, UNITED STATES ATTORNEY, WASHINGTON, D.C., IN WHICH YOU STATED:

"IT IS DESIRED TO POINT OUT, HOWEVER, THAT JUDGMENTS OBTAINED UPON GOVERNMENT INSURANCE POLICIES ARE NOT OF THE CLASS REQUIRING PAYMENT "ON SETTLEMENTS BY THE GENERAL ACCOUNTING OFFICE.' THE JUDGMENT IN THE INSTANT CASE IS PAYABLE FROM THE FUNDS MADE AVAILABLE UNDER 38 U.S.C. 443, WHICH PROVIDES IN MATERIAL PART THAT THE FUND SHALL BE AVAILABLE FOR PAYMENT OF INSURANCE BENEFITS "INCLUDING SUCH LIABILITIES AS SHALL HAVE BEEN OR SHALL BE REDUCED TO JUDGMENT IN A DISTRICT COURT OF THE UNITED STATES OR IN THE SUPREME COURT OF THE DISTRICT OF COLUMBIA (DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLUMBIA)," AND THAT "PAYMENTS FROM THIS FUND SHALL BE MADE UPON AND IN ACCORDANCE WITH AWARDS BY THE DIRECTOR (ADMINISTRATOR OF VETERANS' AFFAIRS).' BECAUSE OF THESE PROVISIONS OF THE LAW PAYMENTS OF INSURANCE JUDGMENTS HAVE BEEN MADE BY THE VETERANS' ADMINISTRATION AND NOT UPON SETTLEMENTS BY THE GENERAL ACCOUNTING OFFICE. THE SUBMISSION OF THE VOUCHER IN THE INSTANT CASE TO THE GENERAL ACCOUNTING OFFICE FOR AUDIT BEFORE PAYMENT WAS PURSUANT TO AN EXISTING AGREEMENT BETWEEN THE GENERAL ACCOUNTING OFFICE AND THE VETERANS' ADMINISTRATION UNDER WHICH CERTAIN CLASSES OF VOUCHERS WERE TO BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR AUDIT IN ADVANCE OF PAYMENT. THE VOUCHER HERE, AS A MATTER OF LAW, COULD HAVE BEEN PAID WITHOUT SUBMITTING IT TO THE GENERAL ACCOUNTING OFFICE FOR AUDIT IN ADVANCE OF PAYMENT.'

I AGREE WITH THE FOREGOING EXTRACT, TO WIT, THAT UNDER SECTION 17 OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, IT IS PLAIN AS TO CONVERTED INSURANCE ISSUED UNDER TITLE III, WORLD WAR VETERANS' ACT, 1924, AS AMENDED, WHERE A JUDGMENT HAS BEEN OBTAINED UPON SUCH A CONTRACT PAYMENTS ARE TO BE MADE UPON AND IN ACCORDANCE WITH AWARDS BY THE DIRECTOR (ADMINISTRATOR). INCIDENTALLY, THE PRECEDING SECTION OF THE BASIC STATUTE, TO WIT, SECTION 16, AS AMENDED, CONTAINS A SIMILAR PROVISION AS TO TERM INSURANCE.

MAY I SUGGEST BY WAY OF SUMMARY THAT DECISIONS OF THE VETERANS' ADMINISTRATION ARE--- SUBJECT TO AUTHORIZED COURT REVIEW--- FINAL AS TO MATTERS OF LAW AND FACT PERTAINING TO TITLES II, III, AND IV OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED. WITH THIS PROPOSITION WE ARE IN ACCORD. IT IS MY FURTHER POSITION THAT IN YOUR DECISION OF JULY 6, 1937, YOU HAVE HELD THAT WHERE IT MAY BE NECESSARY TO DECIDE A QUESTION OF LAW OR FACT TO EFFECTUATE THE GENERAL PURPOSE OF THE INSURANCE STATUTE YOU WOULD RECOGNIZE THE FINALITY OF ACTION OF THE VETERANS' ADMINISTRATION AS APPLYING TO THE ASSIGNMENT OF AN ATTORNEY FEE ALLOWED BY REASON OF SECTION 500 INCORPORATED IN A JUDGMENT OBTAINED UNDER SECTION 19. IN THE CATHCARD CASE WHATEVER DIFFERENCES OF FACT THERE MAY BE BETWEEN THAT CLAIM AND THE PRESENT, YOU HAVE TAKEN THE POSITION THAT YOU ARE NOT AN INTERESTED PARTY BECAUSE WHERE A CLAIM HAS BEEN REDUCED TO JUDGMENT, THE PAYMENT SHALL BE MADE UPON AND IN ACCORDANCE WITH THE AWARDS BY THE DIRECTOR (ADMINISTRATOR). THE SAME WOULD APPLY WHETHER TERM OR CONVERTED INSURANCE SHOULD BE INVOLVED AS JUDGMENTS PERTAINING TO TERM INSURANCE ARE COVERED BY SECTION 16 AND AS TO CONVERTED INSURANCE BY THE SECTION IMMEDIATELY FOLLOWING. TO USE YOUR OWN LANGUAGE, HEREINBEFORE QUOTED,"JUDGMENTS OBTAINED UPON GOVERNMENT INSURANCE POLICIES ARE NOT OF THE CLASS REQUIRING PAYMENT "ON SETTLEMENTS BY THE GENERAL ACCOUNTING OFFICE" , AND, THEREFORE, I SUBMIT THAT WHEN A JUDGMENT HAS BEEN OBTAINED IT IS THE FUNCTION OF THE VETERANS ADMINISTRATION TO INTERPRET THAT JUDGMENT WHICH MAY BE SATISFIED ONLY UPON AN AWARD BY THE DIRECTOR (ADMINISTRATOR). NECESSARY INCIDENT TO THE JUDGMENT IN VIRTUALLY EVERY CASE IS THE ALLOWANCE OF AN ATTORNEY FEE, AND THERE MAY ARISE THE FURTHER AND INCIDENTAL QUESTION OF THE RIGHT TO ASSIGN SAID FEE--- ALL QUESTIONS, IN MY JUDGMENT, CONCERNING THE PURPOSE OF TITLE III OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, AND INVOLVING AN AWARD MADE BY DIRECTION BECAUSE THERE HAD BEEN AN INSURANCE LIABILITY REDUCED TO JUDGMENT.

IN THE REED CASE, IT IS TRUE THE BENEFICIARY WAS NOT A PARTY TO THE SUIT, BUT THE CLAIM WAS PAID ONLY BY REASON OF THE JUDGMENT OF THE COURT AND, HENCE, THE SERVICES OF THE ATTORNEY RESULTED IN AN ADVANTAGE TO THE BENEFICIARY. THE JUDGMENT COULD ONLY BE PAID UPON AN AWARD WITH MY APPROVAL, UNDER SECTION 17, WORLD WAR VETERANS' ACT, 1924, AS AMENDED. CONSEQUENTLY, I AM UNABLE TO RECONCILE YOUR DECISION OF JUNE 29, 1938, WITH THE POSITION ASSUMED BY YOU IN YOUR DECISION OF JULY 6, 1937, AND WITH THE PRONOUNCEMENTS OF YOUR OFFICE IN THE CATHCARD CASE.

THERE WILL BE NO ATTEMPT TO RESTATE OR RECONSIDER ALL OF THE FACTS AND LAW APPLICABLE IN THIS CASE, AS SAME WERE CAREFULLY SET FORTH AND CONSIDERED IN THE DECISION OF JUNE 29, 1938, 17 COMP. GEN. 1119.

IT IS APPARENTLY YOUR CONTENTION THAT THE PAYMENT TO THE DEATH BENEFICIARY IN THIS CASE WAS MADE ONLY BECAUSE OF THE JUDGMENT ENTITLING THE ATTORNEYS TO FEES BASED ON SUCH PAYMENTS FOR THE REASON THAT IT MAY NOT BE PRESUMED THE VETERAN WOULD HAVE CONTINUED TO PAY PREMIUMS FROM MARCH 1934 WHEN THEY WERE DISCONTINUED IF THE JUDGMENT HAD GONE AGAINST HIM. ALSO, THAT HAD THE VETERANS' ADMINISTRATION SUBSEQUENTLY FOUND THAT PERMANENT AND TOTAL DISABILITY NO LONGER EXISTED IT COULD NOT BE PRESUMED THE VETERAN WOULD HAVE RESUMED PAYMENTS OF PREMIUMS ON THE REMAINING INSURANCE.

THIS OFFICE INDULGED IN NO PRESUMPTIONS IN ARRIVING AT THE CONCLUSIONS MADE IN THE DECISION OF JUNE 29, 1938, IN THIS CASE. ON THE CONTRARY, THE DECISION WAS RENDERED UPON THE FACTS AS THEY ACTUALLY EXISTED IN THE CASE. I MAY SAY THAT THIS OFFICE IS WHOLLY IN ACCORD WITH YOUR VIEWS THAT THERE IS NO WARRANT FOR INDULGING IN A PRESUMPTION THAT THE VETERAN WOULD HAVE KEPT HIS CONTRACT OF INSURANCE IN EFFECT UNDER PREMIUM PAYING CONDITIONS. BUT NEITHER IS THERE ANY WARRANT FOR INDULGING IN A PRESUMPTION THAT THE VETERAN WOULD NOT HAVE KEPT HIS INSURANCE IN EFFECT UNDER PREMIUM PAYING CONDITIONS.

UNDER NONE OF THE CONDITIONS MENTIONED BY YOU WAS THE PAYMENT OF PREMIUMS MATERIAL TO THE PAYMENT OF FULL DEATH BENEFITS TO WHICH THE DEATH BENEFICIARY IN THIS CASE WAS ENTITLED UNDER THE TERMS OF THE INSURANCE CONTRACT. IN THIS CONNECTION IT IS NOTEWORTHY THAT THE VETERAN'S POLICY, K-374,344, WAS ISSUED EFFECTIVE DECEMBER 1, 1922, AT AGE 31, IN THE AMOUNT OF $10,000, ON THE 20-YEAR ENDOWMENT PLAN. THE CASH SURRENDER VALUE OF THE POLICY AFTER IT HAD BEEN KEPT IN FORCE UNDER PREMIUM-PAYING CONDITIONS FOR A PERIOD OF SLIGHTLY LESS THAN 4 YEARS ONLY, OR UNTIL ABOUT DECEMBER 1926, WAS SUFFICIENT TO PURCHASE EXTENDED INSURANCE IN THE FULL AMOUNT OF $10,000 WITH FULL DISABILITY AND DEATH BENEFITS TO THE END OF THE ENDOWMENT PERIOD AS PROVIDED IN THE POLICY, EVEN IF NO FURTHER PREMIUMS THEREON HAD BEEN PAID. ANY PREMIUMS DUE AFTER THAT PERIOD, WHETHER PAID OR NOT, HAD NO EFFECT UPON THE ENTITLEMENT TO, OR THE AMOUNT OF, THOSE BENEFITS, THE PAYING OF PREMIUMS THEREAFTER MERELY HAVING HAD THE EFFECT OF INCREASING THE CASH SURRENDER VALUE OF THE POLICY EACH MONTH THAT PREMIUMS WERE SO PAID, THUS INCREASING, ALSO, THE AMOUNT OF PURE ENDOWMENT WHICH WOULD HAVE BEEN PAYABLE AT THE END OF THE ENDOWMENT PERIOD, IF THE POLICY HAD NOT MATURED BEFORE THAT TIME. FOR INSTANCE, ON NOVEMBER 4, 1930, EFFECTIVE DATE OF PERMANENT TOTAL DISABILITY, THE CASH SURRENDER VALUE OF THE POLICY WAS $3,033, SUFFICIENT TO PURCHASE EXTENDED INSURANCE IN THE FULL AMOUNT OF THE POLICY, $10,000, TO THE END OF THE ENDOWMENT PERIOD, DECEMBER 1, 1942, AND A PURE ENDOWMENT OF $3,494.50 PAYABLE ON THAT DATE, WHEREAS THE CASH SURRENDER VALUE OF THE POLICY CALCULATED AS OF MARCH 1, 1934, THE DATE TO WHICH PREMIUMS ACTUALLY WERE PAID, IS $4,580.90, WHICH WOULD PURCHASE THE SAME AMOUNT OF INSURANCE TO THE END OF THE ENDOWMENT PERIOD BUT A GREATER AMOUNT OF PURE ENDOWMENT, NAMELY, $5,613.80. THEREFORE, IT READILY MAY BE SEEN THAT ANY CONTENTION REGARDING WHETHER FURTHER PREMIUMS ON THE POLICY WOULD OR WOULD NOT HAVE BEEN PAID IN THIS CASE HAS NO BEARING UPON THE ISSUES RAISED BY THE FACTS ACTUALLY PRESENT IN THE CASE.

I FIND NO PROPER BASIS FOR CHANGING THE CONCLUSION ANNOUNCED IN THE DECISION OF JUNE 20, 1938, TO THE EFFECT THAT THE JUDGMENT IN THIS CASE DETERMINED ONLY THE RIGHTS OF THE PLAINTIFF, THE VETERAN, DURING HIS LIFETIME; THAT THE ATTORNEYS' FEES WERE EXPRESSLY LIMITED IN THE JUDGMENT TO 10 PERCENT OF THE PAYMENTS TO THE VETERAN; THAT THE RIGHT OF THE DEATH BENEFICIARY WAS NOT DEPENDENT UPON THE JUDGMENT; AND THAT THE JUDGMENT DID NOT PURPORT TO AWARD ATTORNEYS' FEES BASED ON THE AMOUNTS DUE AND PAYABLE TO THE DEATH BENEFICIARY AFTER THE DEATH OF THE VETERAN.

YOU AGAIN CONTEND HERE THAT YOUR DECISION CONCERNING THE RIGHT OF THE ATTORNEY UNDER THE JUDGMENT IN THIS CASE, AS WELL AS UNDER JUDGMENTS IN ALL OTHER LITIGATED INSURANCE CASES, IS FINAL AND CONCLUSIVE UNDER SECTION 5 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, REFERENCE AGAIN HAVING BEEN MADE BY YOU TO THE CATHCARD CASE, NOW PENDING BEFORE THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA, AND THE DECISION OF THIS OFFICE DATED JULY 6, 1937, 17 COMP. GEN. 4. YOU URGE THAT THE PROVISIONS OF TITLES I AND V OF THE WORLD WAR VETERANS' ACT, PURSUANT TO WHICH INSURANCE CASES ARE LITIGATED AND ATTORNEYS' FEES FIXED BY THE COURT, ARE SO INEXTRICABLY INTERWOVEN WITH THE PROVISIONS OF TITLE III OF THE ACT UNDER WHICH INSURANCE CONTRACTS ARE EXECUTED AS TO IMPEL THE CONCLUSION THAT YOUR DECISION AS TO THE RIGHT OF AN ATTORNEY UNDER A COURT JUDGMENT IS FINAL. ALSO, YOU CONTEND, APPARENTLY TO THE SAME END, THAT EVEN AFTER JUDGMENT OF THE COURT THE AWARD IS REQUIRED BY LAW TO BE MADE BY YOU.

UNDER EXISTING STATUTES, FINALITY OF YOUR DECISIONS IS LIMITED TO "ALL DECISIONS OF QUESTIONS OF FACT AND LAW AFFECTING ANY CLAIMANT TO THE BENEFITS OF TITLES II, III, OR IV OF THIS ACT.' TITLE I, CONTAINING THE AUTHORITY FOR LITIGATION OF INSURANCE CASES, AND TITLE V, CONTAINING THE AUTHORITY FOR PAYMENT OF ATTORNEYS' FEES ARE NOT MENTIONED WITH RESPECT TO THE FINALITY OF YOUR DECISIONS. I FIND NO REASONABLE BASIS FOR THE CONCLUSION THAT IN CASES IN WHICH A COURT HAS PROPERLY TAKEN JURISDICTION OVER AN INSURANCE CASE UNDER AUTHORITY OF SECTION 19, TITLE I OF THE ACT, THAT YOU RETAIN THE STATUTORY AUTHORITY TO RENDER A CONCLUSIVE DECISION IN THE CASE CONTRARY TO THE TERMS OF THE JUDGMENT. IF SUCH WERE THE CASE IT WOULD BE POSSIBLE FOR YOU TO NULLIFY OR MODIFY THE EFFECT OF THE ACTION OF THE COURT, THEREBY RENDERING INEFFECTIVE THE PROVISIONS OF SECTION 19, TITLE I OF THE ACT. IT MAY NOT BE PRESUMED SOLELY BECAUSE THE SUBJECT OF A LITIGATED CASE ARISES UNDER AN INSURANCE CONTRACT EXECUTED PURSUANT TO TITLE III OF THE ACT THAT THE ADMINISTRATOR OF VETERANS' AFFAIRS, AFTER THE CASE HAS GONE TO JUDGMENT, RETAINS THE RIGHT TO RENDER CONCLUSIVE DECISIONS OR TO AWARD THE INSURANCE OR ATTORNEYS' FEES CONTRARY TO THE PLAIN TERMS OF THE JUDGMENT. ON THE CONTRARY, YOUR AWARDS UNDER A FINAL COURT JUDGMENT RENDERED IN ACCORDANCE WITH THE STATUTE WOULD APPEAR TO INVOLVE A MINISTERIAL DUTY AS DISTINGUISHED FROM ONE INVOLVING DISCRETION.

I DESIRE AGAIN TO REPEAT WHAT WAS STATED IN THE DECISION OF JUNE 29, 1938, THAT THE CATHCARD CASE HAS NO APPLICATION TO THIS CASE. THE PORTION YOU HAVE QUOTED FROM LETTER DATED APRIL 13, 1938 (NOT APRIL 12) FROM THIS OFFICE TO THE UNITED STATES ATTORNEY, WASHINGTON, D.C., THE SUBSTANCE OF WHICH IS SET FORTH, ALSO, IN THE BRIEF FILED BY THE COMPTROLLER GENERAL IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA IN THE CATHCARD CASE, WAS ADDRESSED SOLELY WITH REFERENCE TO THE PROVISIONS OF THE ACT OF MARCH 3, 1875, 18 STAT. 481, AS AMENDED BY SECTION 13, TITLE II OF THE ACT OF MARCH 3, 1933, 47 STAT. 1516.

WHILE THE CITED LETTER AND THE COURT BRIEF EXPRESS THE VIEW THAT INSURANCE JUDGMENTS OF THE CLASS HERE INVOLVED ARE NOT THOSE EMBRACED BY THE 1875 STATUTE, AS AMENDED (I.E., NOT OF THE CLASS OF JUDGMENTS WHICH THE STATUTE REQUIRES TO BE PAID UPON SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE), AND FURTHER, THAT SUCH INSURANCE JUDGMENTS MAY, UNDER EXISTING VETERANS' LEGISLATION, BE PAID BY THE VETERANS' ADMINISTRATION WITHOUT SUBMISSION THEREOF TO THIS OFFICE FOR DIRECT SETTLEMENT OR AUDIT IN ADVANCE OF PAYMENT, NEITHER THE SAID LETTER NOR THE COURT BRIEF MAINTAINS, OR PURPORTS TO MAINTAIN, THAT THE PAYMENTS OF AWARDS UNDER INSURANCE JUDGMENTS ARE NOT SUBJECT TO EXAMINATION OR AUDIT BY THE GENERAL ACCOUNTING OFFICE AFTER PAYMENT. BOTH IN THE CATHCARD CASE AND IN THIS CASE THERE WAS NO REQUIREMENT OF LAW THAT THE AWARD APPROVED BY YOU PURSUANT TO THE JUDGMENTS BE PRESENTED TO THIS OFFICE FOR AUDIT BEFORE PAYMENT, ALTHOUGH, UNDER THE INTEROFFICE PROCEDURE WHICH HAS HAD YOUR APPROVAL, THESE JUDGMENT AWARDS ARE PRESENTED TO THIS OFFICE FOR AUDIT IN ADVANCE OF PAYMENT. SUCH PROCEDURE IS IN THE INTERESTS OF THE UNITES STATES AND OTHERWISE AFFORDS PROTECTION TO DISBURSING OFFICERS WHO MAKE PAYMENTS IN ACCORDANCE WITH THE PREAUDIT CERTIFICATION OF THIS OFFICE.

IT MAY BE STATED, FOR EXAMPLE, THAT HAD PAYMENT IN THE INSTANT CASE BEEN MADE WITHOUT AUDIT BY THIS OFFICE IN ADVANCE OF PAYMENT, AND THE PAYMENT BEEN MADE OF ATTORNEYS' FEES ON THE INSTALLMENTS DUE THE BENEFICIARY UPON THE BASIS OF THE AWARD AS APPROVED BY YOU, THE VOUCHER COVERING PAYMENT WOULD THEN BE THE SUBJECT OF A SO-CALLED POST AUDIT AND IN SUCH POST AUDIT IT WOULD BE THE DUTY AND RESPONSIBILITY OF THIS OFFICE TO QUESTION SUCH PAYMENT AS NOT HAVING BEEN MADE IN ACCORDANCE WITH THE TERMS OF THE JUDGMENT, THUS REQUIRING CONSIDERATION OF (1) THE LIABILITY OF THE DISBURSING OFFICER FOR THE PAYMENT SO MADE; (2) LIABILITY OF THE CERTIFYING OFFICER UNDER THE PROVISIONS OF EXECUTIVE ORDER NO. 6166, DATED JUNE 10, 1933; AND (3) LIABILITY OF THE PAYEE TO REFUND PAYMENT NOT LEGALLY DUE. LIKE CONSIDERATION WOULD HAVE BEEN REQUIRED IN THECATHCARD CASE HAD PAYMENT BEEN MADE UPON THE BASIS OF THE AWARD AS ORIGINALLY PRESENTED IN THAT CASE WITHOUT AN AUDIT BY THIS OFFICE IN ADVANCE OF SUCH PAYMENT.

YOUR LETTER CLEARLY SHOWS THAT YOU HAVE CONFUSED THE DUTIES OF THIS OFFICE UNDER THE AMENDED 1875 STATUTE WITH THOSE REQUIRED BY THIS OFFICE UNDER THE DOCKERY ACT OF JULY 31, 1894, 28 STAT. 205-11, AS AMENDED BY THE BUDGET AND ACCOUNTING ACT, 1921, 42 STAT. 24. THAT THE CONGRESS IS WELL AWARE OF THE FACT THAT INSURANCE JUDGMENTS ARE NOT OF THE CLASS EMBRACED BY THE AMENDED 1875 STATUTE IS BORNE OUT BY THE PROVISIONS OF THE ACT OF JUNE 16, 1933, 48 STAT. 302, VIZ:

THAT THE ATTORNEY GENERAL OF THE UNITED STATES IS HEREBY AUTHORIZED TO AGREE TO A JUDGMENT TO BE RENDERED BY THE PRESIDING JUDGE OF THE UNITED STATES COURT HAVING JURISDICTION OF THE CASE, PURSUANT TO COMPROMISE APPROVED BY THE ATTORNEY GENERAL UPON THE RECOMMENDATION OF THE UNITED STATES ATTORNEY CHARGED WITH THE DEFENSE, UPON SUCH TERMS AND FOR SUCH SUMS WITHIN THE AMOUNT CLAIMED TO BE PAYABLE, IN ANY SUIT PENDING ON MARCH 20, 1933, AND ON THE DATE OF THE ENACTMENT OF THIS ACT, BROUGHT UNDER THE PROVISIONS OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED, ON A CONTRACT OF YEARLY RENEWABLE TERM INSURANCE, AND THE ADMINISTRATOR OF VETERANS' AFFAIRS IS HEREBY AUTHORIZED AND DIRECTED TO MAKE PAYMENTS IN ACCORDANCE WITH ANY SUCH JUDGMENT: PROVIDED, THAT THE COMPTROLLER GENERAL OF THE UNITED STATES IS HEREBY AUTHORIZED AND DIRECTED TO ALLOW CREDIT IN THE ACCOUNTS OF DISBURSING OFFICERS OF THE VETERANS' ADMINISTRATION FOR ALL PAYMENTS OF INSURANCE MADE IN ACCORDANCE WITH ANY SUCH JUDGMENT: PROVIDED FURTHER, THAT ALL SUCH JUDGMENT SHALL CONSTITUTE FINAL SETTLEMENT OF THE CLAIM AND NO APPEAL THEREFROM SHALL BE AUTHORIZED.

SEE, ALSO, PUBLIC, NO. 434, APPROVED FEBRUARY 24, 1938, 52 STAT. 81.

IT MAY BE STATED THAT I AM UNABLE TO RECONCILE THE POSITION TAKEN BY YOUR ADMINISTRATION IN THIS CASE WITH THAT TAKEN IN THE CASES OF CHARLES FRANKLIN WARD, XC-1,099,250, AND LESLIE A. BARKSDALE, XC 256,241, ET AL., INVOLVING SUBSTANTIALLY IDENTICAL SITUATIONS.

NOTHING APPEARS IN THE DECISION OF JULY 6, 1937, SUPRA, IN CONFLICT WITH THE VIEWS EXPRESSED BY THIS OFFICE IN THE INSTANT CASE.

YOU ARE ADVISED, THEREFORE, THAT THE DECISION OF JUNE 29, 1938, MUST BE, AND IS, AFFIRMED.