A-18035, APRIL 29, 1927, 6 COMP. GEN. 706

A-18035, APRIL 29, 1927, 6 COMP. GEN. 706

VETERANS' BUREAU - INSURANCE - REINSTATEMENT A POLICY OF WAR-RISK INSURANCE MAY NOT BE CONSIDERED AS REINSTATED UNDER SECTION 305 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 626, AND AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 799, SIMPLY ON THE BASIS THAT THE INSURED AT DATE OF LAPSE OF POLICY WAS SUFFERING FROM A COMPENSABLE DISABILITY, BUT IN ADDITION TO THAT CONDITION THERE MUST BE IN THE POSSESSION OF THE GOVERNMENT AT DATE OF DEATH OR HAPPENING OF TOTAL PERMANENT DISABILITY SUFFICIENT FUNDS ACCRUED UNPAID DISABILITY COMPENSATION BELONGING TO THE INSURED TO COVER THE NECESSARY PREMIUMS TO HAVE REINSTATED THE POLICY.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, APRIL 29, 1927:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF APRIL 4, 1927, REQUESTING DECISION WHETHER THERE MAY LAWFULLY BE PAID WAR-RISK INSURANCE IN THE AMOUNT OF $3,941 TO THE ESTATE OF JOHN HIRAM HURST UNDER THE FACTS AND CIRCUMSTANCES SET FORTH IN YOUR LETTER AS FOLLOWS:

HURST ENLISTED IN THE MILITARY SERVICE OF THE UNITED STATES ON JUNE 19, 1917, AND WAS HONORABLY DISCHARGED THEREFROM JUNE 28, 1919, BY REASON OF DEMOBILIZATION. WHILE IN THE MILITARY SERVICE HE APPLIED FOR WAR-RISK INSURANCE IN THE SUM OF $10,000, NAMING HIS MOTHER, ADA HURST, BENEFICIARY. SUBSEQUENT TO HIS DISCHARGE HE PAID NO PREMIUMS ON THIS INSURANCE AND THE SAME LAPSED FOR NONPAYMENT OF THE PREMIUM DUE JULY 1, 1919. ON APRIL 19, 1922, HE FILED CLAIM FOR DISABILITY COMPENSATION ON ACCOUNT OF PULMONARY TUBERCULOSIS, WHICH WAS HELD TO BE OF SERVICE ORIGIN. THE FINAL RATING BASED ON THIS CLAIMANT'S DISABILITY READ AS FOLLOWS:

TEMPORARY PARTIAL 25 PERCENT FROM DISCHARGE, JUNE 28, 1919, TO DECEMBER

1, 1921.

TEMPORARY PARTIAL 75 PERCENT FROM DECEMBER 1, 1921, TO APRIL 1, 1922.

TEMPORARY TOTAL FROM APRIL 1, 1922, TO JULY 13, 1923.

TEMPORARY PARTIAL 75 PERCENT FROM JULY 13, 1923, TO JANUARY 4, 1924.

TEMPORARY TOTAL FROM JANUARY 4, 1924, TO JANUARY 25, 1924.

TEMPORARY PARTIAL 25 PERCENT FROM JANUARY 25, 1924, TO DECEMBER 28,

1924, DATE OF DEATH.

BECAUSE OF THE PROVISIONS OF SECTION 310 OF THE WAR RISK INSURANCE ACT, AS AMENDED, PROHIBITING PAYMENT OF COMPENSATION FOR ANY PERIOD MORE THAN TWO YEARS PRIOR TO DATE OF CLAIM, THE ORIGINAL AWARD WAS MADE EFFECTIVE AS OF APRIL 19, 1920. SUBSEQUENT TO THE VETERAN'S DEATH THE CASE WAS CONSIDERED FOR THE PURPOSE OF DETERMINING WHETHER OR NOT ANY RIGHT TO WAR- RISK INSURANCE EXISTED UNDER THE PROVISIONS OF SECTION 305 OF THE STATUTE, WHICH READ AS FOLLOWS:

"SEC. 305. WHERE ANY PERSON HAS HERETOFORE ALLOWED HIS INSURANCE TO LAPSE, OR HAS CANCELED ON REDUCED ALL OR ANY PART OF SUCH INSURANCE, WHILE SUFFERING FROM A COMPENSABLE DISABILITY FOR WHICH COMPENSATION WAS NOT COLLECTED AND DIES OR HAS DIED, OR BECOMES OR HAS BECOME PERMANENTLY AND TOTALLY DISABLED AND AT THE TIME OF SUCH DEATH OR PERMANENT TOTAL DISABILITY WAS OR IS ENTITLED TO COMPENSATION REMAINING UNCOLLECTED, THEN AND IN THAT EVENT SO MUCH OF HIS INSURANCE AS SAID UNCOLLECTED COMPENSATION, COMPUTED IN ALL CASES AT THE RATE PROVIDED BY SECTION 302 OF THE WAR-RISK-INSURANCE ACT AS AMENDED DECEMBER 24, 1919, WOULD PURCHASE IF APPLIED AS PREMIUMS WHEN DUE, SHALL NOT BE CONSIDERED AS LAPSED, CANCELED, OR REDUCED, AND THE UNITED STATES VETERANS' BUREAU IS HEREBY AUTHORIZED AND DIRECTED TO PAY TO SAID SOLDIER, OR HIS BENEFICIARIES, AS THE CASE MAY BE, THE AMOUNT OF SAID INSURANCE LESS THE UNPAID PREMIUMS AND INTEREST THEREON AT 5 PERCENTUM PER ANNUM COMPOUNDED ANNUALLY IN INSTALLMENTS AS PROVIDED BY LAW: PROVIDED, THAT INSURANCE HEREINAFTER REVIVED UNDER THIS SECTION AND SECTION 309 BY REASON OF PERMANENT AND TOTAL DISABILITY OR BY DEATH OF THE INSURED SHALL BE PAID ONLY TO THE INSURED, HIS WIDOW, CHILD OR CHILDREN, DEPENDENT MOTHER OR FATHER, AND IN THE ORDER NAMED, UNLESS OTHERWISE DESIGNATED BY THE INSURED DURING HIS LIFETIME OR BY LAST WILL AND TESTAMENT.'

THE BUREAU PRECEDENTS UNDER THIS SECTION OF THE STATUTE, WHICH WERE ESTABLISHED AFTER AN EXHAUSTIVE STUDY, AND CONCURRED IN BY THE ATTORNEY GENERAL, HOLD THAT WHERE A VETERAN ALLOWS HIS INSURANCE TO LAPSE AT A TIME WHEN HE IS SUFFERING WITH A COMPENSABLE DISABILITY FOR WHICH COMPENSATION IS UNCOLLECTED, AND THEREAFTER DIES OR BECOMES PERMANENTLY AND TOTALLY DISABLED AT A TIME WHEN HE STILL HAS UNCOLLECTED COMPENSATION, SUCH AMOUNT OF HIS INSURANCE SHALL BE REVIVED AS THE UNCOLLECTED COMPENSATION WOULD PURCHASE IF APPLIED AS PREMIUMS WHEN DUE. THE CAUSE OF THIS NONCOLLECTION MAY BE EITHER DELAY BY THE BUREAU IN MAKING THE AWARD, OR DELAY ON THE PART OF THE CLAIMANT IN FILING HIS CLAIM.

IT WAS FOUND THAT AT THE TIME THIS CLAIMANT PERMITTED HIS INSURANCE TO LAPSE HE WAS SUFFERING FROM A DISABILITY OF SERVICE ORIGIN WHICH DISABLED HIM TO A DEGREE OF 25 PERCENT, BUT THE COMPENSATION WHICH WOULD HAVE BEEN PAYABLE ON JULY 1, 1918, THE DATE OF LAPSE, REMAINED UNCOLLECTED ON THAT DATE BY REASON OF THE FACT THAT HE HAD NOT YET FILED CLAIM FOR DISABILITY COMPENSATION. AT THE TIME OF HIS DEATH ON DECEMBER 28, 1924, THERE WAS STILL DUE HIM FROM THE UNITED STATES VETERANS' BUREAU COMPENSATION DUE AND UNCOLLECTED IN THE AMOUNT OF $193 COVERING THE PERIOD FROM DATE OF DISCHARGE TO APRIL 19, 1920, PAYMENT OF WHICH WAS BARRED BY SECTION 310 OF THE THEN EXISTING STATUTE AS HEREINBEFORE EXPLAINED. THIS AMOUNT APPLIED UNDER SECTION 305 TOWARDS THE REVIVAL OF THE INSURANCE BROUGHT INTO FORCE THE AMOUNT OF $4,336, FROM WHICH WERE DEDUCTED THE UNPAID PREMIUMS WITH INTEREST, LEAVING $4,114.69. AN AWARD WAS MADE IN FAVOR OF MRS. ADA ANN HURST, THE DESIGNATED BENEFICIARY, PAYABLE IN AMOUNTS OF $23.66 PER MONTH FROM DECEMBER 28, 1924, TO DECEMBER 28, 1944.

UPON THE DEATH OF THE SOLDIER'S MOTHER ON FEBRUARY 27, 1926, THE COMMUTED VALUE OF THE REMAINING UNPAID INSTALLMENTS, TO WIT, $3,941, REVERTED TO THE ESTATE OF THE EX-SOLDIER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 303 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, AND AN AWARD WAS MADE IN FAVOR OF MRS. MAMIE MCCORMAC, ADMINISTRATRIX OF THE EX-SOLDIER'S ESTATE. IT IS THIS AWARD WHICH HAS BEEN QUESTIONED.

IN CONNECTION WITH THE MATTER, YOU FORWARD FOR CONSIDERATION OPINION OF THE GENERAL COUNSEL OF THE VETERANS' BUREAU DATED JULY 22, 1925, AND OPINION OF THE ATTORNEY GENERAL DATED SEPTEMBER 11, 1925, 34 OP.ATTY.GEN. 369, IN CASE OF RAY THOMAS, AND TWO OPINIONS OF THE ATTORNEY GENERAL DATED JULY 24, 1926, CONSIDERING OTHER CASES AND AFFIRMING THE OPINION IN THE CASE OF RAY THOMAS.

THE ONLY LEGAL QUESTION INVOLVED IN THE PRESENT CASE IS WHETHER REINSTATEMENT OF A POLICY IS AUTHORIZED UNDER SECTION 305 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 626, AND AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 799, BY THE APPLICATION AS PREMIUMS OF THE AMOUNT OF DISABILITY COMPENSATION TO WHICH THE VETERAN WAS NOT ENTITLED, AND WHICH HE COULD NOT HAVE COLLECTED DURING HIS LIFETIME, FOR A PERIOD MORE THAN TWO YEARS PRIOR TO DATE OF FILING CLAIM FOR DISABILITY COMPENSATION, WHICH THE VETERAN WAS PROHIBITED FROM RECEIVING BY THE EXPRESS TERMS OF SECTION 310 OF THE WAR RISK INSURANCE ACT, IN FORCE AT THE TIME THE AWARD OF DISABILITY COMPENSATION WAS MADE.

THE MERE STATEMENT OF THE QUESTION WOULD SEEM TO IMPEL A NEGATIVE ANSWER. IT IS UNDERSTOOD THAT THE VETERAN, DURING HIS LIFETIME, COLLECTED ALL OF HIS DISABILITY COMPENSATION WHICH ACCRUED AND WHICH HE COULD HAVE COLLECTED, AND DID NOT SEEK TO APPLY ANY OF IT AS INSURANCE PREMIUMS ON HIS LAPSED POLICY. HIS DEATH DID NOT GIVE HIS BENEFICIARY, PERSONAL REPRESENTATIVE, OR HIS ESTATE ANY RIGHT TO COLLECT DISABILITY COMPENSATION FOR THE PERIOD FROM JUNE 29, 1919, TO APRIL 19, 1920, WHICH HE HAD NO RIGHT TO COLLECT DURING HIS LIFETIME AND WHICH HE COULD NOT NOW COLLECT IF STILL LIVING.

THE OPINIONS OF THE GENERAL COUNSEL OF THE VETERANS' BUREAU AND OF THE ATTORNEY GENERAL WHEREIN THE CONTRARY VIEW IS EXPRESSED APPEARED TO RELY SOLELY UPON THE PHRASE IN SECTION 305 OF THE STATUTE,"WHILE SUFFERING FROM A COMPENSABLE DISABILITY FOR WHICH COMPENSATION WAS NOT COLLECTED," NOT GIVING PROPER CONSIDERATION TO THE FOLLOWING PHRASE,"AND AT THE TIME OF SUCH DEATH OR PERMANENT TOTAL DISABILITY WAS OR IS ENTITLED TO COMPENSATION REMAINING UNCOLLECTED," APPEARING IN THE SAME SENTENCE. WHEN THE STATUTE EXPRESSLY PRECLUDES THE PAYMENT OF DISABILITY COMPENSATION DURING ANY PARTICULAR PERIOD, IRRESPECTIVE OF THE REASON, IT CAN NOT BE HELD THAT THE VETERAN, AT THE TIME OF DEATH, "WAS OR IS ENTITLED" TO COMPENSATION DURING THAT PERIOD. THERE SHOULD NOT BE LOST SIGHT OF THE SUBJECT MATTER OF THE STATUTE AND THE UNDERLYING PRINCIPLE WITH RELATION THERETO. THE STATUTE DEALS WITH LIFE INSURANCE AND WITH ITS REINSTATEMENT BY THE APPLICATION AS PREMIUMS OF FUNDS IN THE POSSESSION OF THE GOVERNMENT BELONGING TO THE VETERAN. IT MAY BE COMPARED TO THE APPLICATION OF THE RESERVE VALUE OF CERTAIN POLICIES TO KEEP ALIVE A POLICY OF INSURANCE. UNDER THE STATUTE THERE MUST BE FUNDS, IN THE FORM OF DISABILITY COMPENSATION TO WHICH THE VETERAN WAS ENTITLED AND WHICH WERE NOT PAID TO HIM, IN THE POSSESSION OF THE GOVERNMENT AT DATE OF MATURITY BY DEATH OR PERMANENT TOTAL DISABILITY, WHICH ARE AVAILABLE FOR APPLICATION AS PREMIUMS. THERE WERE NO FUNDS IN THE POSSESSION OF THE GOVERNMENT IN THE CASE OF JOHN HIRAM HURST AT DATE OF DEATH WHICH COULD HAVE BEEN APPLIED AS INSURANCE PREMIUMS; HENCE, THERE WAS NO AUTHORITY TO CONSIDER THE POLICY AS REINSTATED.

REFERENCE HAS BEEN MADE TO THE COMMITTEE REPORT OF THE CONGRESS, REFERRED TO IN THE OPINION OF THE ATTORNEY GENERAL, DATED SEPTEMBER 11, 1925, WHICH WAS CITED IN SUPPORT OF THE CONTRARY VIEW, BUT THERE APPEARS NO STATEMENT IN THAT REPORT WHICH WOULD INDICATE AN INTENT TO AUTHORIZE THE REINSTATEMENT OF INSURANCE MERELY BECAUSE AT DATE OF LAPSE THE INSURED WAS SUFFERING FROM A COMPENSABLE DISABILITY IF THERE WAS NOT IN THE POSSESSION OF THE GOVERNMENT AT DATE OF DEATH OR HAPPENING OF TOTAL PERMANENT DISABILITY, SUFFICIENT FUNDS FROM ACCRUED UNPAID DISABILITY COMPENSATION TO COVER THE NECESSARY PREMIUMS TO HAVE REINSTATED THE POLICY.

YOU ARE ADVISED, THEREFORE, THAT PAYMENT TO THE ESTATE OF JOHN HIRAM HURST MAY NOT LAWFULLY BE MADE. IN VIEW OF THE PAST PRACTICE BASED ON THE ADMINISTRATIVE CONSTRUCTION OF THE LAW, PAYMENTS HERETOFORE MADE CONTRARY TO THE VIEWS EXPRESSED IN THIS DECISION NEED NOT NOW BE DISTURBED IF OTHERWISE REGULAR.