Brief for the United States — Teamsters v. United States

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- INDEX

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@ Page

‘Opinions below........--.-- A dcnecReGaASesneeenceunawne was 1

ING on oti cnn takenndeneneeink FT BRAS ROR oe vO 1

SRO POONNIND 4 0. pos cicicwcccnsccnsgesoccidccccs eee -2

Statutes and regulations i Ee ren, er 2

PN oo ccaccckccaduasnacsnenae panbideenn Makan aR z 4 -

Summary of argument_--....------ Lae aioe eark alts wee e*.

Argument: E

I. Jurisdiction - consent to be sued were withdrawn

before the suit was brought- - - - - tes ec ta Aakash ik araicab on he 4

IJ.- The present suit is not shown to have been filed in time. +10

Cen nics Kecnniuvaomacrdaneedieakae hivuseuee mecca 12

Appendix I. Statutes and regulations involveg--- 9 --- -- ivan Gq

Appendix II. Legislative history of the Act of March 20, 1933- - 19:

oe , CITATIONS ~

Cases: .

Beers v. Arkansas, 20 ENR Pe ene aR en 7

Brysov v. Hines, 268 Fed. 290._._......---..------ ca ~

Carpenter v. United States, 56 F. (2d) 828___....---- a cc li

. Compagnie Generale ‘ ‘Transatlantique Vv. United States, 51 F.

Ge See iincnnnnscchncnekeeneeshetudsasaenaenesn BS ..

Crouch v. United States, 266 U:S. 180, 8 F. (2d) 435.----- 4

De Arnaud v. United States, 151.U.8. 483__.......------- Be. ;

De Groot v. United States, 5 Wall. 419__..:..---- imei © :

“ Finn-v. United States, 123°U.8, 227... 4--.----------+ a 11

Hans v. Louisiana, 134 U.S. 1_..--- iii lacsh shouecent Gah ee sa 6

Harris v. United States, 5 F.Supp. 368-.- - - - - Mawakiak canna 4

Hatrisburg, The, 119 U.S..199_.....-------- nee Lascwen 12:

Hill v. United States, 149 U.S. ee. neeksehaiceais _ eer

Louisville Cement Co. v. Interstate Commerce Commission, a

— fo eS Pa eee Soper Ree ' 12

Mara v. United States, 54 F. (2a) Oe ae 4.

Miller v. United States, 57 F. (2d) 889....:....--------. 11.

Schillinger v. United States, 155 U.S. 163_2.......------ . 6

~ United States v. Babcock, 250 U.S. 328_........---------- 6 -

Unajéed States v..Densmore, 58 F. (2d) 748--.- jinchnents 11

ee ee ree reer 8

United States v. McGovern, 299 - ed. 302, a dismissed,

267 U.S. RRS i PS SE “Ea Dar PTT OPO apap Pe i 4

United States v. Pfitsch, 256 Us. er Sete nencunee ‘4

Western Fuel Co. v. Garcia, 257 U.S. 233_-.....---------- 12 ;

546@0—34——_} (I) ; <> a

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Statutes: Page

Act of October 6, 1917, c. 105, 40 Stat. 398, 409, 410:

Ce ee RnR hee RR RASA eRe KKe eee ke 13

a a i a a wig 13

i en wih a ci elbccnlas 14

eae RVs ta Ohne tua nents 14

DMC dhbint beet bhmhbaahhbaecoaeeannens 14

PE RUM Kau idieaesnanectietaseagnusctuce: BD

Act, of June J, 1924, c. 320, 43 Stat. 608, 612:

en nennnde 16

i I ao a cn canine chen 16

Act of July 3, 1930,@§ 849, 46 Stat. 991, 992

eel CO eee ae 17

ee ee ee ee hes 17

Act of March 20, 1933, c. 3, 48 Stat. 8, 9, 11: e

DM Livelupcditiiewseks Lane Mcicaiaiaenemnaex 17

i Tet Ae hee hn dkedaecenen heed name aepean 17°

Tucker Act (Judicial Code, Sec. 24 (20)\ U. S:C., Title 28,-

a a A: ae ann er 18

Miscellaneous: }

Bulletin No.1, sciaibandais by Director f the Veterans’

8 8 ee ee ee 15

H.Rept. No. 1, 73d Cong,, Ist Sess., March 11, 1933

Si iiibh i chipichnncnnenadantedwasanébenasac'se 19

S.Rept. No. 1, 73d Cong., Ist Sess., March 11, 1933,

Pt Thatch eth esebnesguegaeeiashiabanesenpee 20

a Rec. Vol. 77, Pt. 1: ; . ;

. fe, iad onapain dma aae aon 19

ee ede ea ek ake er nukes se eae 20.

dcntetebnaddcheawceaneeke ikhuhasmamans _20.

- Pages 364-366 ............-. itniktnaelanteneatieeeie cane te

CG e ab eu baaicee anegiaeneonee cave 21

ENE Ri a AS er a ee Peep a 21

a a ia aa ke a A as sean a cd ts a sta ae 22

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Inthe Supreme Gur of the lnited Bites

Oc OBER ae 1933

— * —

No, 855

_Mrs.. Marcarer<Suea LYNCH, PETITIONER |

: VU.

THE Unirep States oF AMERICA®’

ON WRIT OF CERTIORARI TO THE UNITED STATES CIRCUIT

COURT OF APPEALS FOR THE FIFTH CIRCUIT .

BRIEF FOR THE UNITED STATES

OPINIONS BELOW .

The | District Court rendered no opinion. The

opinion of the Circuit Court of Appeals sp 24+

25) is reported i in 67 F. (2d) 490.

JU RIADIOTION

The judgment of the Circuit Court of Appeals

was entered N ovember 3, 1933. (R: 26.) A peti-

tion for rehearing was denied December 14, 1933.

(R. 28.) The petition for a writ of: certiorari was

filed March h 12, 1934, and g granted April 9, 1934. The"

. (1)

2.

a of this Couri is invoked under Section

(a).gf the Judicial Code as amended by the Act

a 133 1925.

QUESTION PRESENTED

Whether Section 17 of the Economy Act of

“March 20, 1933, infra, p. 17, deprived the courts:

below of jurisdiction to entertain a suit against

the United States on a contract of yearly renewable

term-insurance issued under the. War Risk Insur-

ance Act of 1917. |

@ STATUTES AND REGULATIONS INVOLVED

The statutes and regulations involved are set

forth in Appendix I, infra, pp. 13-18.

7 _ - STATEMENT

The petitioner filed this suit in the District Court

April 21, 1933, to eee death benefits alleged to

be due her as the béneficiary designated in the con- —

tract of yearly renewable term insurance issued to

her son Thomas Stephen Lynch during service in

the United States Army between May 30, 1918 and

_an undesignated date in the year 1919. (R.1.) .

The petition alleged that Thomas Stephen Lynch,

the insured, died November 27, 1924 ; that although

* no premiums had been paid on ‘his insurance since

July, 1919 the insured became permanently’ and

totally disabled and the insurance thereby matured —

prior to September 1,-1919, thé ate on which the

grace period expired. (R. 2.)

3

The petitioner further alleged that she had.

*‘made due proof’’ of the insured’s death and re-

“quested payment of benefits but that on March 29,

1933, the Director of fr of the Veterans’

Administration advised Ker by letter that further.

_ consideration of her: claim yas barred by the Econ- .

omy Act of 1933. She claimed that this ‘Act was

unconstitutional and void on various grounds set

forth | in the petition. (R. 2-5, 7-10.) The re-

spondent demurred to the petition and the demur-

rer. was sustained’ by the District Court. (R. 17.)

On appeal to the Circuit Court of Appeals for the

Fifth Circuit the judgnient of the District Court .

was affirmed on thé ground that the Economy Act,

repealing all war risk term insurance laws and

’ withdrawing the Government’s consent to be sued |

- thereunder, had deprived the Districf“Qourt of

jurisdiction. *(R. 24-25.) A petition for rehearing

was filed and-denied. (R. 26-28.)

SUMMARY OF neemieiees ENT

_—

i. Jurisdiction of the case, and the consent of

the defendant to be sued, were withdrawn by the

Act of 1933: Hefore the suit was brought. ,

2. The petition fails to show that the suit was .

filed 3 in time under the prior law.

4

ARGUMENS | |

|

JURISDICRION AND CONSENT TO BE SUED WERE WITH-

DRAWN BEFORE THE SUIT WAS BROUGHT |

- Jurisdiction was refused below beéause of Sec-

tions 5 and 17 of the Eeéndmy Act of March 20,

1933, infra, p. 17.. (R. 25.) ,

- Section 5 does not concern war risk insurance,

and Section 17 is the controlling section. By-that

section ‘all laws granting or pertaining to yearly

renewable term insurance * are hereby repealed ”’,

with certain saving provisos which do not barbie

this case. The repeal includes the section under

which suits on such policies have hitherto been

brought. in District Courts (World War Veterans’

, et, 1924, See. 19, as amended by Act of J uly 3,

"1930, c. 849, 46 Stat. 991, 992, infra, p. 16) and

under which this suit was brought.’ The repeal

* Such insurance should not be confused with the perma-

nent converted insurance policses issued subsequently to the

‘ war to yeterans who elected to convert their temporary war-

. time insurance into a permanent form ofrovernment in-

.suranegex-The Act of March 20, 1933 not affect *the

latter form of insurance. :

“Tt was well settled, prior to the Py ge of the .Act of

1933, that jurisdiction of suits on war risk policies-was under

the secfion cited, and not under the Tucker Act, and that,

therefore, the plaintiff was entitled to a jury trial. United

States v. Pfitsch, 256 U.S.-547, 552-553; Crouch v. United

States, 266 U.S. 180, 8 F* (2d) 485; United States v. Mc-

Govern, 299 Fed. 302, appeal dismissed, 267 U.S. 608; Mara-

v. United States, 54 F. (2d) 397, 399. Contra, Harris v.

United States, 5 F. Supp. 368 (D.C. Idaho). This suit is

&

.

adn?

of

preceded the filing of the present suit. The situa-

tion, therefore, is that at the time the present suit —

- was filed the only law under which jurisdiction

of it was conferred upon the court had« already

been repealed. The court, therefore, held ssiiecnd

that it had no jurisdiction.

It is clear, and not seriously disputed, that this

is the meaning of the Act of 1933. That it was

‘also the purpose of Conpress is made clear by. the

Congressional history which we summarize in Ap-

pendix II, infra, pp. 19-22. The question, there-’

fore, is the power of Congress to withdraw the.

jurisdiction previously given, and to terminate, be-

fore the-suit was brought, the consent of the United

States to be sued in such a case. .

Petitioner complains that the Act: of 1933 has

wholly confiscated his rights under an insurance

contract by repealing all’ the laws that grant them;

but .by the same Act of which he complains the

‘courts were deprived of ‘ail jurisdiction to enter-. |.

tain his complaint. If such withdrawal of juris- ~

diction is valid, the alleged effect of the Economy

Act’upon petitioner’s asserted contract rights can-

expressly brought under the World War Veterans’ Act

~ (R. 1); and the plaintiff asks a jary trial (R. 11). It could

not, in any view, have been brought under the Tucker Act,

hesauee the claim exceeds $10,000 (R. 11), and also because |

the right accrued either in 1919 or 1924 (R. 2) and the suit

_was not brought.within 6 years thereafter. . (R. 1.) *Judi-

cial Code, Sec. 24 (20); US.C,, Title 28, Sec. 41 (20), infra,

p. 18.

° The repeal ecumee ‘elective. March 20, 1933, 48 Stat.

8, 11,16. The suit was instituted April 21. (R. 1.)

oS - : o

ae

snot be considered: The unqualified right of Con-

: gress | to withdraw the consent éf the United. States

to be ‘sued i is clear from previous decisions of this

obligation to provide a remedy through the courts.

United States v. Babcock, 250 U.S. 328° This is

true of contract rights as well as others. In Hans

v. Louisiana, 134 U.S,.1, it was said (p. 13):

- The contracts between a nation and individ-

uals are only binding on¢he epnscience of the

‘sovereign, and have no pretension to,a com-

pulsive force. They confer-no right of ac-

tion independent of the sovereign will..

‘Even -if a violation of~the Constitution by the

United States were involvedea right of action there-

for against the Government is not conferred

.thereby. In. Hill vat nited States, 149 U.S. 593,

jurisdiction to determine. whether the- United

. States had violated the Fifth Amendment in appro- *

priating plaintiff’s property was expressly declined

on the ground that the alleged taking sounded. in

tort and that the United States had not consented

to be sued: in tort, and in Schillinger Vv. United

‘States, 155 USS. 163; 168, this Court said: a

I¢ is ‘said that the Constitution forbids the

taking of private property for publie uses

| without just co pensation; that therefore

every_dppropridtion of private property by

. any Offigial to the uses of the gov ernment, no

matter however wrongfully made, ¢reates a

claim founded upon the Coustifution of the

eos / Pi ee

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Court. ‘“It.has heen held that the United States iF

when it creates a right" against itself i= “under no

S

hy ' ton ae

b-. ® v

ik

Ps _ 8

__ United States and sare the letter ‘of fhe

grant in the act of 1887. f thee jurisdiction

_ to the Court.of Claims. If that argument be -

good, it is equally good applied*to every. other

provision of the Constitution’ as*well as to_

every law of Congress. This prohibitian of

the taking of private property for public use

_ without compensation is no more sacfed than _

that other constitutional provision that no

. person shall be deprived of life, liberty, or "

property without,due process of law. Can it -

be that Congress intended that every wrong-

ful arrgst and detention of an individual, or -

seizure of his property by an officer ‘of the . -

- government, should expose it to ats action

| for damages in the Court of Claims? If any

~ such breadth of jurisdiction. was éontem-

plated, language which had alveady been

riven ; ‘rictive meaning would have been -

led, Cc

id seem immaterial that consent

was previously given, for, as was pointed out: by

Chief Justice Taney in Beers v. Arkansas, 20 How. —

527, 529; as permission to sue bs altogether volun-

‘tary on the part of the sovereignty, it follows that

it may prescribe the terms and ‘con itions under

which it consents to be sued * * * and may

withdraw its consent whenever.it may supposeythat

Justice to the public requires it.’ (Italics ours.)

In De Groot v. United States, 5 Wall.'419, dealing

_ with the Court of Claims, this Court said (p. 432) :

It is true that ordinarily, when we seek

for the foundation of this jurisdiction, we

"54690342 | :

Moreover,

% a .

~

‘ 8 we

look’to the general laws eréating the court,

_ and defining causes of which it may have

cognizance. But is equally true that when-

ever Congress chooses to withdraw from that

jurisdiction any class of cases which, had |

before been° committed to its control,. as ‘it

has done more than once, it has the power to

‘do-so, or to prescribe the rule by which such .

- eases may be determined. Its right. to do

this in regard to any particular case, as well

as to a class of cases, must rest on the same -

* foundation; and no reason can be pe ‘eived ©

6 why Comprnds may not at t any time withdraw

a particular case from the cognizance of that

court, or prescribe in such case the cireum-

stances under which ‘alone the court may ;

render a Judgment against the gov rnment.

‘There is no difference, we submit, between’ an as-

serted violation of the Fifth Amendment involving

a contractual obligation. and one which does not; —

ag os a different situation arise where the right .

to sue is withdrawn from the which arises when it

has never been conferred, :

Of course, wheré ® right has pied, fm an indi ,

vidual#o sue one other than the United States; Con-

gress may be without power to remove that right.

Its absolute power to take away. ; a right to sue

5 \ applies only where the suit is against’ the Govern-

ment. -'This ‘power is inherdpt in the status of the

Government as a sovereign. United ‘States v. Lee,

106 U.S. 196, 206, The distinction is ilhustrated in

Brysoh v. Hines, 268 Fed. 290 (C.C.A. 4th), where '

oe R : j .

°

—

nition were brought by the administrators of two

.. ‘soldiers against a railroad and the Director General

of Railroads for damages on account of the deaths

ofthe soldiers alleged to have-been dife tothe negli- f

| gence of the defendants. The defense set up was

* that a circilar-issued by the Director. General | after

. the cause of action accrued deprived the plaintiffs

of the right to sue. The court said (p. 295) : .

As already observed, Circitlar No. 4 could .

not take away: any cause of, action for the

negligence of the Atlaiitic Coast Line Rail-

_, road Cémpany, for it existed and was a vest-

ed right before that ciréular was. issued.

» The right of action had also accrued against

_ the Director General under the-federal stat-

utes and proclamations of. the President, if °

the train was negligently run. As the Direc-

tor General was an officer of the gov ernment,

* the right of action was in effect: against the

. government, and was ,dependent upon the -

_permission and grant \6P the government

found in these statutes - ‘and ‘prdelamations.

This permission andgrant could, of course, :

be withdrawn at ‘any time: before the judg-

~ ment: ‘(Italies ours. ; oe

In short, whatever power Congress may have had

| over the petitioner’s contract, directly, it clearly

had the power to close the courts. Having done’

that before the suit was brought, it follows that the *

Pistrict Court had no jurisdiction of the case, and

both courts below have properly SO — .

10

. i. ae"

.

THE -. DSE NTSSUIT IS NOT SHOWN TO HAVE BEEN er:

IN TIME .

The complaint i in the case at bar also lacks a

~ jurisdictional prerequisite under Section 19 of the

Act of 1924 (infra, p..16) -as the section stood be-

fore it was repealed. It fails to show that suit was

* filed within the time limited by that section, winch

‘provided : ae ,

& No suit on yearly renewable term*insyr-

sik years after the right accrued for which

the claim is made or within one year after

the date of approval of this amendatory Act,

“ whichever is the later date, * * .*: Pro-

vided, That for the purposes of this section

it shafhe deemed that the right accrued on

thechappening of the contingency on which

the claim is. founded: Provided further,

-That this limitation is suspended for the pe- —

, riod elapsing between the filing in the bureau

of the-claim sted upon and the denial of said

‘claim by the director. eee

, This suit was filed “April 21,; 1933, more than

“six years after. the right accrued for which the

claim is made’’ (R. 2) and more than one year .

after July 3, 1930, the date of approval of the

amendatory Act, (46 Stat: 992) and thnp:is barred

unless the limitation on suit. was‘guspended by the

consideration of the claim*in the: Bureau. The

complaint does not show the date claim was filed

&

. ance shall be allowed under this section un- .

~~ Jess the same shall have been brought within

e’

—» *

on ag

in the Bureau and ther efore does not allege a “fact

esseutial to the deter mination of thé court’s juris-

diction. Miller v. United States, 57-F. (2d) 889.

(E.D.N.Y.). The complaint does allege that “your

petitioner made due proof of said death to the de-

»fendant, * * * and requested payment of afore-

‘said amounts’’ (R. 2); but the date of such claim.

isnot stated although essential to the determina-—

tion of jurisdiction. And fu#ther, the ajlegation of

_ ‘due proof”’ cs ‘solely. to death whereas the

~ aim was wholly dependent on the alleged total

permanent disability without which the-insurance

would have lapsed. United — v. Densmore,

58 F. (2d) 748 (C.C.A. 9th).

. It is immaterial that this defect was not pleaded,

tid was apparently not brought to the attention of,.

nor considered by, either of the eourts below. It -

is held thay, the provisions of Sectiot/12as to time

are not a statute of limitations, but go to the juris-

- diction of the court. Miller v. United States, 57

F. (2d) 889,890 (E.D.N.Y.). This is in accord

_-with decisions as to the effect of the six- year pro-

Vision of-the Tucker Act (infra, p. 18), Compagnie

Generale Transatlantique v. United States, 51 F.

*(2d) 4053, 1056 (C.C.A. 2d) ; Carpenter v. United

States, 56 F. (2d) .828 (C. Cy. 2d) ; as, well as with

decisions as to the similar prov isions in the Acts’

conferring jurisdiction on the Court of Claims.

Fihn v. United States, 123 U.S. 227. Since a failure

to sue in time is in such eases jurisdictional, it need

not be pleaded, and is available at any time. Finn

_ R t S

iy

ak Aa RL al Ale

age - .

Se

‘

| 12 a ne

~v. United States, supra, at pp. 939-933 : Carpenter 7

v. United States, supra, at p..829; De Arnaud vy. .

United States, 151 US. 483, 495-496. See also

~Louisville Cement’ Co. v: Interstate Commerce -

Commission, 246 U.S. 638, 642; The Harrisburg,

119 U.S. 199, 214; Western Fuel Co. v. Garcia, 257

U.S. 233, 249-243, |

CONCLUSION.

- For the reasons stated, it is ‘respectfully submit-

“ ted that the judgnient below should be affirmed.

y J. CRawrorp Biaas,

Solicitor General.

oe ILLIAM STAWLEY,

The Assistant to the Attorney General.

v WiLL G. BEARDSLEE,

Director, Bureau of War Risk LAtigation. —

“Wier C. PICKETT,

: | FENDALL Marpury,

-

ws J CHARLES BUNN,

Special Assistants to the on General.

. May 1934, '

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* a

APPENDIX I

STATUTES AND REGULATIONS

The Act of October 6,,1917, ¢. 105, 40 Stat. 398,

409, 410, provides in part as follows: :

See —. Gates ut wv :

Sec. 400. That in order to give to every

commissioned officer and enlisted man and to

every member of the Army Nurse Corps (fe- .

z _ male) and of the Navy Nurse Corps_....

. (female) when employed in active service un-

der the War Department or Navy Depart-

ment greater protection for themselves and

their dependents than’is provided in Article

III; the United States, upon application to

the bureau and without medical examination,

shall grant insurance against the death or

total permanent disability of any such per-

- son in any,multiple of $500, and not less than |

$1,000, or more thari $10,000, upon the pay-

ment of: the premiums: as hereinafter | E /,

“- provided. e 7 oe. A

Sec. 401. That such insurance: mist be «< “.

_ applied for within one hundred and twenty

days after enlistment or after entrance into -

. or employment in the active service and be-

fore discharge or resignation,.except that

those persons who are in the active war serv-

ice at the time of the publication of the terms

and conditions of such contract of insurance

may apply at any time within one hundred

and twenty days thereafter and while in such

service. Any person in the attive service on

- or after the sixth day of Appil, nineteen

hundred and seventeen, who, While in such

i een eet

vans dual ies hig aa a aL

2

service and before the expiration of one hun-

dred and twenty days from and after such ~

publication, becomes or has, become totally

and permanently ‘disapled or dies, or has

died, without having applied for insurance,

shall be deemed to have applied for and to

have been granted insurance, payable to such

person during his life in monthly .install-

ments of $24 each. If he shall die either

before he shall have ‘received any of such

monthly installments or before he shall have

received two hundred and forty~of-sueh -

monthly installments,: then $25 per month

_ shall be paid to his wifé from the time of

his death and during her widowhood, or to

his child, or widowed mother if and while

they-survive him: Provided, however, That

not more than two hundred and forty of such

-monthly installments, including’ those re-

ceived by such person during his total and

permanent disability, shall be so paid; and

in that event the amount of the monthly in-

stallments -Shall be apportioned between

them as may be provided by rsipheet to vas

' Src. 402. That the director, subject to the.

general direction of the Secretary of the

Treasury, shall promptly determine upon

and publish the full and eXact terms ands)

conditions of ~such contract of insur-

aa = me

Sec. 403. That the United States shall

bear the expenses of administration an the

excess mortality and disability-cost resulting

from the hazards of war. The premium

rates shall be the net rates based upon the

American’ Experience “able of Mortality

and interest at three and one-half per

eentum per annum.

Src. 404. That during the period of war

and thereafter until converted the insurance

shall be term insurance for successive terms” .

~

15

cy

of one year each. Not later than five years |

‘after the date of the termination of the war

as declared by proclamation of the President

of the United States, the term insurance

shall be converted, without medical examina-

tion, into such form or forms of insurance

as may be prescribed by regulations and as

the insuréd may request. Regulations shall

provide for the right;te convert into ordinary

life, twenty payment life, endowment ma-

turing at age sixty-two and int) other usual _

forms of insurance and shal] pescribe the

tume and method of payment ofthe pre-

miums thereon, but payments of premiums

in advance shall not be required for periods

of more than one month each and may be de-

ducted from the pay or deposit of the insured

or be otherwise made at his‘election.

Sec. 405. That in the event pf disagree-—

ment: as to'a claim under the contract of in-

surance’ between the bureau and any benefi-

ciary or beneficiaries-theteunder, an action

on the claim may be brought against the

United States in the district court of the

United States in and for the district in

which such beneficiaries or any one of them

resides. * *. * |

Bulletin No, 1 was promulgated by the Director —

on October 15, 1917, and provides in part as follows:

Unde? the authority. granted by Congress

in an act amending ‘‘An act entitled ‘An act

to authorize the éstablishment of a Bureau of

.» War Risk Insurance in the Treasury De-

partment,’ approved September 2, 1914, and

for other purposes,’? approved October 6,

1917, and subject in all respects to the pro-

visions of such act, of any amendments

thereto, and of all regulations thereunder,

‘ now inf force or hereafter adopted,. all of

©

< .

ce ‘ »

— .

.

s

> é

service and before the expiration of one hun-

- dred-and twenty days from and after such

publication, becomes or has become totally

and permanently disabled or dies, or ‘has

died, without having applied for insurancey~

shall be deemed to have. applied for and to

have been granted insurance, payable to such

person during: his life in monthly install- .

ments of $25 each. If-he shall die either

before he shall have received any of such

. monthly installments or before he shall have

received two hundred and forty of such

monthly installments, then $25: per month

shall be paid to«his wife from the time of

‘ his death and during her widowhood, or to

his child, or widowed mother if and while

they survive him: Provided; however, That _

not more.than two hundred and forty of such ‘/

monthly installments, including those re-

ceived by such person during his sotal and

‘permanent digability, shall be so paid; and:

in that event the amount of the monthly in-

stallments shall be apportioned ‘between

them as may be provided by regulations.

' Sec, 402. That the director, subject to the ©

general direction of the Secretary of the

_ Treasury, shall promptly determine upon

and publish the full and exact terms and

—eonditions of such contract of insur-

— = * *

Sec. 403. That the United States shall

bear the expenses of administration and the

excess mortality and disability cost résulting

from the hazards of war. The premium:

rates shall be the net rates based upon the

Ameriéan Experience Table of Mortality

and interest* at three and, one-half per

centum per annum. ;

Src. 404. That during the period of war

and thereafter until converted the insurance

shall be term insurance for successive terms _

~

>

ne

“15. a ‘ *

of one year each. Not later than five years

after the date of the termination of the war

as declared by proclamation of the President

of the United States, the term Insurante

shall be-converted, without medieal examina-

tion, into such/form or forms of insurance

as may be prescribed by regulations and as

the-insured may request. _ Regulations shall

provide for the right to convert into ordinary

life, twenty payment life, endowment ma-

turing at age sixty-two and into other usual

forms of* insurance and shall prescribe the

time and method of payment of the pre-

miums thereon, but payments of* premiums

in advance shall not. be required for periods |

of more than one month each and may be de-

ducted from the pay or deposit of the insured

‘or be otherwise made.at his election.

’ SEc. 405. That in ‘the event of disagree-

ment as toa claim under the contract of in-

surance between the bureau and any benefi-

clary or beneficiaries thereynder, an action

.on the claim may be brought against the

United States in the district court of’ the

United States in and for the district in

which such benefi¢iaries or any one of them

resides, * * * - .

Bulletin No. 1 was promulgated by the Director

on October 15, 1917, and provides in part as follows: .

Under the authority granted by Congress’

In an act amending ‘‘ An act entitled “An act

to authorize, the establishment of 4 Bureau of

ar Risk Insurance in the Treasury De-

partment,’ approved September 2. 1914, and :

for 6ther purposes,’’ approved October 6, .

1917, and subject in all y speécts to the pro-

visions of such act, of any \amendments

thereto, and of all regulations thereunder,

now in force or hereafter adopted, all of

> :

“7

es

er

°

_ eee

°F FRM TRIMER TINS

e wrote

|. ‘ Ht sae ‘

“

Which, together with this. policy, the appli-

cation ‘ther efor, and the terms and conditions

published under author ity of the act, shall |

>. * constitute the contract: See oe

The Act of October 6, 1917, supra, was aménded

by the Act of June 7; 1924, ce. 320, 48 Stat. 612

(U.S.C., Title 38, Section 445.) After several inter-

mediate amendments the Act of Juné€ 7, 1924, was

amended ‘by thé Act af July 3, 1930 fe. 849, 46 Stat.

991, 992), to read in part as follows: oP, F

~ Src. 5. The diréctor, subject to the peheral: .

. { direction of the Pr esident, shall administer,

; _ execute, and enforce the provisions of, this

G: ' Act, and for that purpose, shall have full

: power and authority te male rules and regu-

lations, not inconsistent with the prov isions

of this Act, which are: necessary Or appro-

” priate: to. car ry Jout its purposes , and shall

decide. all quéstions arising under this

Act; * * al

Ske. 19. In the event of disagréement as

to claim, including claim for refund of pre- -

» . miums,. under a contract of insurance be-

i tween the bureau_and any person or persons

. élaimipg thereunder an actiov on the clainp :

ner may Paivackt against the United States. T

* . either{in the Supreme Court of the District

of Columbia or in the district court of the ,

United States in and for thedistrict in which

such persons or any one of them resides, and

jurisdiction is hereby conferred upon ‘such

courts to hear and determine all such con-

. .\, troversies. * * * af

* a * a + F it

No walt on yearly renewable term insur-

ante shall be allowed under this section un- .

-Tess the same shall have been brought within :

*

- . Act, whichever‘is the‘later“date, .* *

» a i

‘six years after the right acerued for whith

the’claim is made 6r within one year after

the déte of approval of. this amendatory

*.

- Provided, Thatefor the purposes of this sec-

-Wwhich the claim is founded: Provided fur-" -

@

tion it shall be deemed that the right accrued

on the happening of the contingency on

ther, That this limitation is’ suspended for

the period elapsing between the filing in the

bureau of the claim sued upon‘and the de-

, e

nial of said claim by the dire¢tor. * * x”

The-Act of March 20,1933 (c. 3, 48 Stat. 8, 9, 11),

. '* known as the Economy Act, provides in part as.

follows: ects 5. *

s r

SEC, 5. All decisions, rendered. by the Ad

ministrator 6f Veterans’:Affairs under the

provisions of this title, or the regulations is-

sued pursuant thereto, shall be fal and eon-

~ clusive on all questions pf law and faét, and

~tofoye rendered in a court of competent ju-

no other official or court of the United States

Shall have jurisdiction to review by mamda-

mus of otherwise any such decision.

Sec.17-* * * alllaws granting or per-

taining to- yearly renewable term insufance

are hereby, repealed, * * * Provided,

That nothing contained in this section shall

interfere with payments heretofore made or

hereafter to be made under contracts of

yearly renewable term insurance which have

matitxed prior to.the date of enactment ‘of

this Act. and undet which payments have |’

been Commencéd, or oni any judgment here-

risdiction in any suit on a contract of yearly

renewable term insurance, or. which may

hereafter be rendered. in any such suit now-

peaeeer: -* : *. , | ee o

Ol

‘oot

.

The Tucker Act (Judicial Code, Section 24 (20),

U.S.C., Title 28, Section 41 (20)) provides in part

as-follows: ae, |

Twentieth. Concurrent with the Court of -

. Claims, of all claims not exceeding $10,000

_ founded. upon the Constitution of the United

- States or any law of Congress, or upon any

regulation of an executive department, or

upon any contract, express or implied, with

. the Government of the United States, er for

-. damages, liquidated or unliquidated, jn cases .

‘ not sounding in tort, in respect to which

claims the party would be entitled to‘redress *

against the United Statés, either in a:court

of law, equity, or admiralty, if the United

States were suable, -* * *. No~ suit

against the Government of the United States

_' shall be allowed under this paragraph unless

+ the same shall have been brought within six

_ years after the right accrued for which the

claim ismade. * * * - yh

v

Se

APPENDIX a.

: LEGISLATIVE “HISTORY OF THE ACT OF MARCH 20, 1933, C. 3,

48 STAT. 8

The bill (ELR. 3820) ‘i. introduced ii .the

House: As introduced, Section 17 provided’(Cong,

Ree. Vol. 77, Part.1, p. 199) :

¥ all laws granting or pertaining to yearly -

renewable term. insurance are hereby re-

_pealed, . but poner in accordance with «

a

such laws shall continue to the first day of

the third calendar .month following the

month during which this act is enacted.

* * * Provided, that nothing contained in

this section shall’ interfere with payments

heretofore made or. hereafter to be made

under contracts of -yéarly renewable: term

_.imsurance ier have matured prior to the

date of enactnient of this act and under

which payments have been commenced.

The bill was referred to the Committee on Econ-

omy, and the report of that Committee gave the fol-

lowing explanation of Section 17 (73d’ Cong., Ist »

sess., House Report No: 1, March 11, 1933, pp. 5-6) :

This section [Sec:*17] further repeals all

laws granting or pertaining to yearly renew-

able term insurance, including the right to

institute suit or further proceed with suits

under section 19 of the World, War vet-

erans’ act, 1924, as amended. * * * Tti is

further provided that payments under con- |

tracts of yearly renewable term insurance,

which matured prior to the date of the enact-

ment of-this Act and under which, cummins

(19)°

DEES TEEPE PPT

? 7. ba _—

20 : ,

° - -@ 5

have been commenced, shall.continue injac- -

cordance with the terms of. such contyActs. ©

; No new awards can be made or new payments -

commenced on yearly renewable-term insur- -

ance under the terms of this section.

Furthef adjudications of claims will not

» be* permitted and all pending claims and

suits are required to be dismissed. Under

the provisions of this section, payment of: —

: benefits under the laws existing at the date .

of repeal are to continue to the first day of

the third calendar month, following the date

‘

_of enactment. y

The bill w as passed by ace House with the sec-

tion in this-form.

A bill similar to the House bill was introdyced in:

the Senate and referred to the Finance Committee.

The Finance Committée made a report in the same

words as the report of the House Committee as to

Section 17. (73d Congress, 1st Session, Senate Re-

port No. 1, March 11, 1933, pp. 4-5.) |

‘ When the bill passed by the Housé reached the.

Senate, it was subgtituted for the Senate bill (Cong.

Ree. Vol. 77, Patt, p. 276). a

a The bill as passed by the House did not save

pending suits on contracts of War Risk Insurance, .

and Sehator Black introduced the following amend-

mont to Section 17 (p. 355): .,

Nor on any, judgment heretofore render ed

in a court of competent jurisdiction, or

which may hereafter be rendered in any

suit‘now pending.

Senator Harrison infroduced a substitute for

‘Senator Black’s Amendment, which would have

saved only cases in which there had been a trial

prior to the enactment of the Act: (P.355.) Sena-. *

+

«?

- .

21

tor Black in commenting on these two proposed

amendments, after referring ‘to the fact that the

bill as passed by the House did not permit a soldier

to collect the “judgment he —_ obtained, said

a 399) : |

The amendment which the Senator from

. Mississippi now proposes, and which I shall

‘ pated if n# amendment’shall not be agreed .

rovides that if a judgment has alr eady

ie dbtained the soldier can proceed to eol-

het the judgment irrespective of thelaw.

But it does not save the thousands of other

* contractual obligations upon which suits

4 have already been filed in the Federal courts

. of the United States on policies of insurance

bought and paid for by the veterans of the

World War.

* aa &

> The erate which I offer does not add a

dollar.to any compensation; .* % * .

It simply provides where suits have been

filed on contractual obligations, on these pol-

icies, that the courts shall be permitted to

epass upon the claims based upon the con-

“tracts of insurance.

After some further debate Senator Black modi- |

fied his amendment so that it reads as it now

appears in the statute, and the’Sénate agreed to

this amendment and@»rejected the amendment of

Senator Harrison (pp. 364-365). As thus amend-

ed the Bill passed the Senate on March 15, 1933 ,

(p. 471).

When the bill as sidinanlind: reached the House,

the Senate amendment was — as follows

~ (p. 551):

Amendment No. 19 fe 10): This amend.

ment saves from the effect of the repeal of

the laws pertaining to yearly renewable

af

e,

ro

——— —

Ps is

term war-time insurance suits filed in the

courts and pending at the'time of enactment ,

of the act. All other clairhs are automati-

‘cally barred from any future Consideration.

~ The House bill barred also pending suits

from further consideration by the. courts,

but the Senate amendment permits such suits

filed prjor to the enactment of this act to

continue to final judgment.

_ The amendment was concurred in by the House

(p. 561) and the bill passed and was signed by the

President on March 20, 1933.

é

‘

oOo,

U.S. GOVERNMENT PRINTING OFFICE: 1934

; *

BRIEF FOR. “THE

UNITED: STATES ©

Anthe sapien out of the Brite States

’ Conia TaRM, 1933

» e \ . , . &

er No. 855. :

» Mrs. MARGARET SHEA LYNCM, PETITIONER

i : : fa - nie . ‘

THE Unirep SratKs ‘or AMERICA

~ io tn

v ‘ 7

.

q:

'. ON WRIT OF CERTIORARI TO THE UNITED: ST. ATES CIRCUIT

COURT OF APPEALS FOR THE FIPTH CIRCUIT *

_ SUPPLEMENTAL BRIEF FOR THE UNITED STATES

Certain contentions made in the reply brief of

the petitioner in this ease ‘require a further answer. .

- .

Petitioner contends that: “The writing of war

risk’ term insurance by the Government as pro-

vided by Act of Congress was not the exercise of a

sovereign power”’ (reply brief, p. 2).

The first case cited under this contention, Stand:

ard Oil Company v. U nited States, 267 U.S. 76,

related to a policy of marine insurance, issued in

‘ * <a ‘

- 56791 — 34

'?)

-

a

bo

o>

oceurred in 1915. The United States was not then

at war, and the insurance was a mere accommoda-

tion to the shipping interests, who found it difficult

to get insurance against war risks from commer-

cial companies. The quotation at page 2 of the

reply brief from page 79 of the opinion relates

merely to the question whether interest should be

allowed.

The present insurance, issued originally under

the Act of (tober 6, 1917, was clearly issued un-

‘der the war powers, in particular under the power

of Congress to raise and support armies, * What- -

ever was done by Congress to pay, support, or im-’

ibis. ey morale of its soldiers in war time was

done aS a sovereign and not as a matter of business,

It is not believed, however, that the distinction

is of great importance, for ‘this Court has held, in

the four cases referred to below, that State@ may

validly. withdraw permission for suits against

themselves, even in business contracts. . :

The second quotation on page 2 of the reply brief

rs from the dissenting opinion in the Sinking Fund

Cases, 99 U.S. 700. The majority of the Court

Aheld-in those cases that the Aet of 1878 was valid,

notwithstanding that it changed in an important

way the eqntract relations previously existing be-

t®een the United States and the Union _——

: Railroad Company.

.1915 under the. Act. of 1914, and on Which a loss

II

The petitioner contends that ‘“The Government

‘may not withdraw the right to.sue in the case at

‘har, because such withdrawal impairs the obliga-

tion of plaintiff’ s war risk insurance contract”

(reply brief, p. 3). e :

The three cases cited under this contention, on

page 3 of the reply brief, have no bee wing on the

case at bar. In none of them was any government,

except the City of Quincy, Illinois, involved, and

in none of them was there suggested a withdré wal

of the right to.sue a sovereigit, All three were

suits on debts, by private parties, against private

parties and a city. a |

The Contract © bien (Article I, Sec. 10) does

not bind the United States. The Fifth Amendment

does. ? But it is certainly no stricter than the Con-

tract Clause, and it may be doubted if: it is as strict.

If, then, this Court Has held that States, with out-

standing valid contract rights againts them, and

with statutes permitting their creditors to sue, may

validly repeal those statutes, and stand upon their

sovereign immunity from suit, without violation of

the Contract Clause, it follows necessarily that the -

United States may do the same, without violation

of the Fifth Amendment. This Court has so held,

c ~ ‘ ; eis ma 1 gee

Aas to States, in four decisions. Railroad Company

v. Tennessee, 101 U.S. 337; Railroad Company V.

* Alabama, 101 U.S. 832; Baltzer v. North Carolina,

tae

.

4

161 U.S. 240; Baltzer Taaks v. North Carolia, ,

‘161 U.S. 246. See also Tn re Ayers, 123 U.S. 443,

-505. In the. Tennessee case the obligation. suéd on:

was a debt of the Bank of ‘Tennessee, guaranteed

by the State. In the Alabama ease it was a part

of the State's “three percent fund.’ In the tirst

North Cagoling case it was 'a group of railroad aid

° s, ® :

bonds. Ta all four cases the States was suable, by

statute, when the claims were acquired by the re-

spective plaintiffs, and in’ the Alabama “ase this

condition continued. itil after the suit Was

brought. i he Alabama statute further made it the

duty of the ¢ ‘omptrolle r, Upon a judgment and a

certificate by ‘the Judge and the Clerk of Court

ethat the recoverv was just, ‘to issue his warrant -

for the amount.” In each of the four cases the

State withdrew permission to be sued before ‘the

plaintiff got a judgement, and in each of them this

Court determined rat it had that power, and that

its action did not viol: ite the Contract Clause.

Lhe basis GF these four decisions, that the judi-

cial remedy provided did not contain provisiow for

exec ution of the judgment and so might be valtaly

vithdrawn, is exactly applicable to SWits, against

the United States on money claims... Under the

( onstitation, Article 1, Section 9, no ‘money shall

be drawn Atom the 'T reasury but In consequence

of ah appropriation made by law. Accpydingly,

the law provides for a report of judgments against

the United States to*Congress (Judicial Code, See.

» ‘

<>

n as ~ toe rere MPO Ra PAR se WS % e i x MeL ere UA —

4 |

143: U.S.C., Title 28, Sec. 248) and Congress ap-

propriates tod pay .them, Congress sometimes

does not pay them all (33 Stat. 422, ‘except the

two Judgments in never of the Coca Cola Com-

pany’’; 40 Stat. 378, “xcept ‘the judghient in

favor of the Louisville & Nashville Railroad Com-

pany’’), and when it does not no court has power

to make it, .As Chief Justice Waite said, in det ny-

ing the petition for reheaving in Railroad Com-

pany V. Alabama, 101 U.S. 882, 855:

» he ease is precisely like that of a judg:

ment in the Court of Claims against the

United States. By the Constitution of the

United States no ‘money shall be dgawn

from the treasury but in eerste Se.

appropr iations made by law.’?) Art. 1, see.

9. ‘Hence the party who gets a judgmert

must wait until Congress makes an appro-

‘priatign before his money can be had.

The four decisions notede ‘annot be distinguished

from the present case, and they require an affirm-

ance of the Judgment.

Respectfully submitted.

; J. Crawrorp Biaas, %

2 Ne

‘ . Solicitor General.

.] /

May 1934. * re Ey RG ;

‘ ‘ ‘

© 3

U S GIVCONMENT PRINTING OFFICE 1936