Brief for the United States — United States v. Atkinson

FILE COPY

No. 265

—

Ste Saprne gaurtofthe Winited Sine

OCTOBER TERM, 1935

Unrrep Staves OF AMERIPA, PETITIONER,

a, eae

Ray KEitH ATKINSON

ON WRIT OF CERTIORARI TO. THE UNITED STATES CIRCUIT.

_ COURT OF APPHALS FOR THE FIFTH OIROUIT

BRIEF FOR THE UNITED STATES

INDEX

Page

oy SNe beta PSE RANA SNE ARES, VAP 1

risdiction . .. . . navducdvdnéuequeedowasseueseodins aaatteoden 1

ee 2

Statutes and regulations involved.....7.....4....4...-..---- 2

CR Sn 2

Specifications of errors to be urged 7

i ih... ssusedeenioquseteons ebagesougs 7

DT ccadpabunesdebesteecoenuecasescescoveneteosees 8

Did banéceddnetebsodaneenceoeseesvetereooceprace 17

PETE ccocccececccesece ee 18

CITATIONS

Cases: ;

Wuchler v. Pizzutti, 276 U. 8. 13............---.06 a 2

Fillippon v. Albion Vein Slate Co., 250 U. 8. 76..4.-..--.- 16

Foz v. Standard Oil Co., 204 U. s. ss Ae Aen ‘12

PrGene G. Fereeth, THe Ge ]. Dlecccecccccadcccccscctccese ‘2

Ginsberg & Sons y. Popkin, 285 U. 8. 204..........-..--: 11

Lepine v. Wiiiame, 363 U. &. 76... c ccc qocsccccccccccee 12

Miller v. United States, 294 U. 8. 435.--.-....--- 6, 7, 8, 9, 13, 16

re eeteesooeseseus 11

United States v. Chase, 135 U. 8. 255.....-.....-.-.------. 11

United States v. Jones, 131 U. 8. 1.......-.--.-.---------- ll

United States v. Salen, 235 U. 8. 237_..-.2-...---------- il

United States v. Stever, 222 U. 8. 167.......-.---.4-----.-- 11

© United States v. United Shoe Machinery Co., 264 Fed. 138_- 12

Chase, Jr., v. United States, 256 U. 8. 1...----.- ibhieeien 2

Cole v. Ralph, a 2h Uibthinadcadineacemeeawwonbes 2

Yazoo & M. V. R. R. Co. v. Mullins, 249 U.S. 531...-.--- 16 *

Statutes: '

War Risk Insurance Act, as amended: , '

Sec. 13 (Oct. 6, 1917, c. 105, sec. 2, 40 Stat. 398, 399) . 18

Sec. 18 (Dec. 24, 1919, c. 16, 41 Stat. 371, 376) _____- 13, 19

, Sec. 20 (Oct. 6, 1917, c. 105, sec. 2, 40 Stat. 398, 400).. 14, 18

Sec. 400 (Oct. 6, 1917, c. 105, sec. 2, 40 Stat. 398, 409) _ 19

Sec. 402 (Oct. 6, 1917, c. 105, sec. 2, 40 Stat. 398, 409;

June 25, 1918, c. 104, sec. 21, 40 Stat. 609, 615)... ~-10,

i, 12, 20

Sec. 403 (Oct. 6, 1917, c. 105, sec. 2, 40 Stat. 398, 410) - 13,

19, 20

Sec. 404 (Oct. 6, 1917, c. 105, sec. 2, 40 Stat. 398, 410;

Aug. 9, 1921, c. 57, sec. 24, 42 Stat. 147, 155)... 10,11, 20

33804—35—1 (1)

Statutes—Continued. :

World War Veterans’ Act, as amended: Page

Sec. 301 (June 7, 1924, c. 320, 43 Stat. 607, 624;-Mar.

= 4, 1925, c. 553, sec. 13, 43 Stat. 1302, 1309; June 2,

1926, c. 449, 44 Stat, 686, 687; May 29, 1928, c. 875,

sec. 14, 45 Stat. 968; July 3, 1930, c. 849, sec. 22, 46

Stat. 991, 1001) ..-.----------------+----------* 11

Sec. 302 (June 7, 1924, c. 320, 43 Stat. 607, 636) ..... 14

Sec. 311 (May 29, 1928, c. 875, sec. 16, 45 Stat. 964,

_ 970; July 3, 1930, c. 849, sec. 25, 46 Stat. 991, 1002). 13, 21

United States Code, Title 38:

Ce AO nn enews ansonensneer ans ctetaeenwones 14

ee, GEE i ncn ccnhemgeseweeseanen sessed senaTree 10

See. BD... ono nnnwonnnnsssoesssaserssssesenees= 21

Miscellaneous:

Veterans’ Administration Regulations:

nme Merete bee 23

OO. ce nseawisneseendeneenia 2s ciemamany wane 23

De ee ead 8, 9

H. Rep. No. 130, 65th Cong., 1st Sess., part 3, p. 12--- 12

7 Amrhein’s The Liberalization of the Life Insurance Con-

tract, 1933, pp. 282-283, 361-363 (pars. (8) and (16)) - 16

Handy Guide to Standard and Special Contracts, 1934

(The Spectator Company) ----------------------- 16

| Inthe Supreme Gourt of the Winited States

OcTOBER TERM, 1935

No. 265

UnitTep STATES OF AMERIOA, PETITIONER

we . |

Ray KerrH ATKINSON

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 for the Western District of

Texas rendered no opinion. The opinion of the

Circuit Court of Appeals (R. 103-106) is reported

in 76 F. (2d) 564.

JURISDICTION

‘The judgment of the Circuit Court of Appeals

was entered March 27, 1935 (R. 106). A petition

for rehearing was denied April 20, 1935 (R. 109).

The petition for a writ of certiorari was filed July

20, 1935,‘and granted October 14, 1935 (R. 110).

(1)

”

2

The jurisdiction of this Court is invoked under

Section 240 (a) of the Judicial Code, as amended

by the Act of February 13, 1925.

QUESTION PRESENTED

Ps

Whether there is any authority in law for in-

cluding in contracts of United States Government

life (converted) insurance against death or total -

permanent disability, a provision that ‘‘the perma-

~ nent loss of hearing of both ears * * *- shall

be deemed to be total permanent disability.” *

STATUTES AND REGULATIONS INVOLVED

The pertinent statutes and regulations are con-

tained in the Appendix, infra, pp. 18-24.

STATEMENT

Ray Keith Atkinson, the respondent, brought

this suit against the Government in the District

Court of the United States for the Western District

of Texas to recover total permanent disability bene-

fits under a policy of Government life insurance,

together with the premiums paid by him since the

date of commencement of the disability alleged.

The plaintiff alleged in his first amended petition

Seas 1-4), filed May 2, 1934, that on or about July

1 While this question was not specifically raised in the trial

court, it formed the basis of the decision of the Circuit Court

of. Appeals, as indicated at p. 6, infra, of the State-

ment, and consequently may be considered here. Friend v.

Talcott, 228 U.S. 27, 36. See also Wuchter v. Pizzutti, 276

U. S. 13; Cole v. Ralph, 252 U. S. 286, 290; Chase, Jr., v.

United States, 256 U.S. 1.

LRU ORS AR YEO ROI Om OR SMELT ESN RO NEN MRR OEE ORES Me TOTLINE PPA 890 ANS

- _ _ < ; eras oF SS es a

/

3

1, 1927, a war-risk insurance policy in the sum of

$10,000 previously issued to him by the defendant

.was converted upon his application into a certain —

form of Government life insurance which, on June

1, 1932, was renewed -and converted into another

form of such insurance, and that he has kept the

insurance in forge at all times by payment of

premiums. He further alleged that by reason of

loss of hearing in both ears his insurance matured

- on January 1, 1928, or, at the latest, at some time

prior to the filing of his claim for insurance benefits

on or about December 10, 1932. His claim of per-

manent total disability was based; in the alterna-

tive upon two distinct definitions thereof contained

-~ in separate clauses in both policies of Government

life insurance which had been issued to him, to wit,

paragraph 11 which defined total .permanent dis-

ability as an “‘impairment of mind or body which

continuously renders it impossible for the disabled

person to follow any substantially gainful occupa-

tion, and which is founded upon conditions which

render it reasonably certain that the total dis- —

ability will continue throughout the life of the

disabled person’’, and paragraph 11 (a) which

provided :

Without prejudice to any other cause of

_ disability, the permanent loss of the use of

both feet, or both hands, or of both eyes,.or

of one foot and one hand, or of one foot and

one eye, or of one hand and one eye, or the

loss of hearing of both ears, or becoming

4

permanently helpless or permanently bed-

ridden, shall be deemed to be total per-

manent disability ; and monthly installments

for any of these specifically enumerated

causes of total permanent disability shall

aecerue from the date of such total per-

manent disability, and any premiums paid

- after the date of such total permanent dis-

ability shall be refunded without interest.

(R. 2, 19, 60-61.) (Italics ours.)

The defendant’s amended. answer contained a

general demurrer, a special exception on jurisdic-

tional grounds as to a portion of the claim, and a

general denial (R. 4-5). By leave of court the

defendant later filed a trial amendment to its first

amended answer, setting up fraud in the reinstate-

ment in June 1921, of the original war-risk insur-

ance, which, it was alleged, had lapsed for nonpay-

ment of premiums upon the plaintiff ’s discharge

from the Army. Fraud was also alleged in the

conversion to Government life insurance in May

1927, of the ‘reinstated war-risk insurance

(R. 5-7).

At the trial of the case before a jury evidence

’ was adduced that the plaintiff became, to all prac-_

tical intents and purposes, totally and permanently

deaf without the aid of ear phones, between Janu-

ary 1, 1928 and December 10, 1932 (R. 62, 65),

but could understand conversation by combining

the use of such phones with lip reading (R. 30).

It also appeared that he was a college graduate,

had taught school (R. 30-31), and was a capable

ROTM OIITENES MRESORDEN, Pte, ANY MNn emcee” BARRO I

4)

and competent architectural draftsman (R. 31,

36) ; that he had worked in an architect’s office for

many years prior to June. or July 1928, at a sub-

stantial salary (R. 29), and since then has followed

his profession intermittently when work was avail-

able, although handicapped by a. progressive im-

pairment in his hearing (R. 29-31, 35, 64). Except

for this impairment, however, there was no indi-

cation that his health was not generally good.

At the close of all the evidence the defendant

moved the court to direct a verdict in its favor upon

~ the following grounds: (1) that there was.no sub-

E stantial evidence (a) of total permanent disability,

within the meaning of paragraph 11 of the policy,

or (b) of loss of hearing of both ears, within the

meaning of paragraph 11 (a) of the policy; (2)

fraud (a) in reinstatement of the war risk insur-

ance, and (b) in the conversion of the reinstated in-

1 surance to Government life insurance (R. 81-82).

The defendant excepted to the denial of this motion

(R. 82) and to the rulings of the court on instruc-

tions given and requested as to the defense of fraud

(R. 83-84, 89), and as to the relevancy vel non of

|. the plaintiff’s ability to hear with artificial aids (R.

t 82-83, 88-89). The trial court instructed the jury,

» with reference to paragraphs 11 and 11 (a) of the

policy, in effect that they should render a verdict

for the plaintiff and find that he was totally and

permanently disabled if they found that he was

either totally and permanently deaf or totally and

‘permanently disabled in fact (R. 86-87).

sisi a aah Ta RSE RSAC IU Ye SS RS

Speco eA ene oan OPEN E OTE Y ATES TN PRMPDE SGT MRED PLETE AT IEE” 6 SE ERIN ERIE SRE

6

The jury rendered a verdict for the plaintiff and

found that he ‘‘became permanently and totally

disabled December Ist, 1932”? without indicating

whether their finding was based upon permanent

total disability in fact or merely upon his deafness

without regard to its disabling effect (R. 7).

From a judgment entered upon this verdict (R.

_ 8) the defendant appealed to the Circuit Court

of Appeals for the Fifth Circuit (R. 91-102) as-

signing error inter alia to the court’s instruction

to the jury that recovery might be allowed under

paragraph 11 (a) of the policy which the defendant

contended had been placed therein without author- —

ity of law ,(R. 94-95). The Circuit Court of

Appeals affirmed the judgment below on the ground

that paragraph 11 (a) of the policy was valid ; that

the decision of this Court in Miller v. United States,

294 U. S. 435, affirming the decision of that court

(71 F. (2d) 361), was inapplicable; and that as

the evidence justified a finding that the insured had

suffered: loss of hearing sufficient to justify recov-

ery under paragraph 11 (a) of the policy,* it was

unnecessary to determine whether there was sub-

stantial evidence. of permanent total disability in

fact within the meaning of the general definition

thereof contained in paragraph 11 (R. 19). The

Court also held that the trial court did not err in:

withdrawing the issue of fraud from the jury.’

2 The Government does not question the correctness of the

court’s decision as to the sufficiency of the evidence of loss

of hearing or as to the trial court’s ruling in withdrawing

' the issue of fraud from the j jury.

7 .

SPECIFICATION OF ERRORS TO BE URGED

1. The Circuit Court of Appeals erred in declar-

ing valid the provision in paragraph 11 (a) of the

Government life insurance contract that the loss of

hearing of both ears shall be deemed to be total -per-

manent disability. | .

2. The Circuit Court of Appeals erred in holding

that the decision of this Court in Miller v. United

States, 294 U. 8. 435, is without application to this

case. |

| SUMMARY OF ARGUMENT

Petitioner contends that the provision in the con-

tract of Government life insurance against death

~ or total permanent disability that certain forms of

physical impairment (including the loss of hearing -

of both ears) shall be deemed to be total permanent.

disabilities regardless of whether or not they are

such. in fact, was not authorized by. the statute gov-

erning such insurance and is therefore invalid.

The decision. of this Court in Miller v. United

States, supra, holding such a provision as to yearly

renewable term insurance invalid applies, we sub-

mit, with at least equal force to Government life

insurance, and the Cireuit Court of Appeals erred

. in holding otherwise.

The general words in the statute on which the

court below relies, when read in the light of their

context, do not support its attempt to gee

the Miller case.

Furthermore, it is manifest from other statutory

provisions relating to Government life insurance

33804—35——2

—

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8

alone that Congress did not-intend to authorize the

policy provision in question. ;

Even if the statute could properly be construed

as authorizing provisions for the payment of in-

surance benefits for specific impairments similar

to those usually contained in commercial insurance

- policies, such a construction would nevertheless fail

to justify the clause covering the loss of hearing of

both ears, since clauses covering this form of im-

pairment have not usually been included in such

policies. a as

The trial court’s charge to the jury that recovery

might be allowed under the clause in question was

prejudicial. to the petitioner since it is to be pre-

sumed that the jury found its verdict under that

clause.

ARGUMENT

_ In Miller v. Umted States, supra, this Court held

(pp. 439-440) that the provisions with respect to

yearly renewable. term insurance contained in

Article IV of the Act of October 6, 1917 (c. 105, 40

Stat. 398, 409) limited the risk to be covered in re-

spect to total permanent disability to disabilities |

which are total and permanent in fact, and held in-

valid, as not within the authority conferred by the

statute, Regulation 3140 of the Veterans’ Adminis-

tration, which purported to add to the disability

risk by declaring that certain disabilities, including

loss of hearing of both ears, shall be deemed to be

PULL LE HTT LO IT ET

anbsaitane anes oka

9

total and permanent under yearly renewable term

insurance without regard to proof of that fact. Al- —

though the regulation in that case, is identical in

language (except for the addition of another dis-

ability )* with. paragraph 11 (a)* of the ‘Govern-

ment life (converted) insurance policy here in suit,

and although all the statutory provisions. construed

in that case relate to Government life insurance as

‘well as to yearly renewable term insurance, the

- court below has attempted to distinguish that case

‘from the one at bar on the ground that paragraph

11 (a) was authorized by the general language in

certain provisions of the statute which, it seems to

have been assumed, applies to Government life in-

surance alone. It is submitted that even if the

court’s assumption were wholly correct, there is no

' basis for regarding the Miller case as distinguish-

able in principle. When the language in question

is examined in the light of its context and of other

statutory provisions relating to Government life

insurance, it becomes even more evident than in

the case of yearly renewable term insurance that

Congress did not intend to authorize such additions

to the disability risk as those contained in para-

graph 11 (a) of the policy in question,

* ‘The clause invoked in the Miller case was “ the permanent

loss of the use of * * * one hand and one eye.”

* Regulation 3140 added “the organic loss of speech.”

This clause has also been added to the Government life-

insurance contract by Regulation 3122, infra, p. 24.

* Supra, p. 3.

RAL LILI OA AO ETN OG MAT oo eid

op eee

10

The provisions containing the language relied

on by the court below appear in U.S. C., Title 38,

‘sec. 512. They are as follows (thie language is rep-

resented in italics):

* * * not later than July 2, 1927, all

term yearly renewable insurance a

shall be converted,.* * * into such

form or forms of insurance as may be pre-

scribed by. regulations and as the insured

may request. Regulations shall provide for ©

the right to convert into ordinary life, °

twenty-payment life, endowment maturing

at age sixty-two, five-year level premium

term, and into other usual forms of imsur-

mes, * * *.>

* * . * * *

Provisions for maturity at certain ages,

for continuous installments during the life

of the insured or beneficiaries, or both, for

_ refund of premiums, cash, loan, paid-up and

extended values, dividends, from gains and

savings, and such other provisions for the

protection and advantage of and for alterna-

tive benefits to the insured and the bene-

ficiaries as may be found to be reasonable

and practicable, may be provided for wm the -

_ contract of insurance, or from time to time

by regulations. * * * (Italics ours.)

Except as to the time limited for conversion of

yearly renewable term insurance, substantially the

same provisions appear in Sections 402 and 404

added to the War Risk Insurance Act, 1914, by

CPR OE RR my

Tete «ab dea

11

the Act of October 6, 1917,° and in all subsequent

legislation on the subject.’ | |

This Court has held that general words which

follow or precede words descriptive of particular

subjects having common characteristics should be

construed as limited to subjects of like kind with

those described by the particular words unless there

is a clear manifestation to the contrary. United

States v. Stever, 222 U. S. 167, 174; United States

-y. Salen, 235 U. S. 237, 249; Ginsberg & Sons v.

Popkin, 285 U.S. 204, 208; United States v. Chase,

135 U.S. 255, 258-259; Neal v. Clark, 95 u. S. 704,

708-709 ; United States: v.. Jones, 131 U. 8. 1, 19.

Applying this rule to the clauses under construc-

tion here, the general phrases, ‘‘such form or forms

_ of insurance as may be prescribed by regulations

and as the insured may request”’ and ‘‘gther usual

forms of insurance’’, should be construed as limited -

to subjects like those described by the particular

phrazes ‘‘ordinary life, twenty-payment life’’, ete.,

which follow and precede them, respectively, and

describe several forms of life insurance. ~~~ ~

Similarly, the general clause ‘‘such other pro-

visions for the protection and advantage of and for

*Appendix, infra, pp. 20-21.

’ Acta of June 25, 1918, c. 104, sec. 21, 40 Stat. 609, 615;

August 9, 1921, c. 57, sec. 24, 42 Stat. 147, 155; June 7, 1924,

¢. 320,.sec. 301, 43 Stat. 607, 624; March 4, 1925, c. 553, sec.

13, 43 Stat. 1302, 1309; June 2, 1926, c. 449, 44 Stat. 686, 687;

May 29, 1928, c. 875, sec. 14, 45 Stat. 964, 968, 969; July 3,

1920), ¢. 849, sec, 22, 46 Stat. 991, 1001.

12

alternative benefits to the insured and the bene-.

ficiaries as may be found to be reasonable and prac-

ticable”’ should be construed as limited to subjects

like those described by the particular words ‘‘ma-’

turity at certain ages’’, ‘“‘refund of premiums, cash,

loan, paid-up, and extended values’, ete., which im-

mediately precede the general clause in the same

sentence and all of which describe certain pro-

visions commonly contained in life-insurance con-

tracts. This construction is further supported by.

the fact that Congress; before passing the Act of

‘October 6, 1917, struck out of the corresponding

. _ general clause contained in Section 402 of the bill

Re GSES ER NMS ST RT BPE tM PONTE Wy ewe aan re Tigges

as originally introduced, a provision authorizing

the Director of the Veterans’ Bureau to grant from -

time to time by regulations ‘‘rights and privileges

not provided for.’’ (See H. Rep. No. 130, 65th

Cong., Ist Sess., part 3, p. 12; Fox v. Standard Oil

Co., 294 U. S. 87, 96; Lapina v. Williams, 232 U. 8.

78, 89; United States v. United Shoe Machinery

6., 264 Fed. 138, 174 (E. D. Mo.).) - _

Manifestly, none of the particular matters de-

scribed in the provisions in question have any rela-

tion to the disability risk to be en by the

insurance contract.

Furthermore, there is not any indication else-

where in the statutes relating to such insurance

that Congress intended to authorize the inclusion

of the disabilities described in paragfaph 11 (a) of

13

the policy here in suit. The reasons stated by this

Court in the Miller case for holding similar pro- -

visions invalid as to yearly renewable term insur-

ance apply with equal force to Government life in-

surance. Indeed, there is even less reason for sup-

posing that Congress intended to authorize these

additions to the disability risk covered by the ‘lat-

ter than for imputing’ such intent as to the former. .

No premiums were charged for covering total

permanent disability in either form of insurance,

‘the rate being limited to that for the mortality

hazard alone,’ except in the ease of Government life

insurance. policies containing provisions ‘for. the

payment of separate benefits in the event of total

disability for a minimum -peridd of time without

regard to permanence, in which case an additional

premium was charged.’ Government life insurance

differs, however, from yearly renewable term in-

surance in that it is intended to be self-sustaining if

possible. By Section 18 of the Act of December 24,

1919, ¢., 16, 41 Stat. 376," Congress established the

United States Government Life Insurance Fund |

- which was to consist exclusively of premiums on

* Section 403 added to the War Risk Insurance Act by the

‘Act of October 6, 1917, c. 105, 40 Stat. 398, 410 Aa,

infra, p. 20.

* Section 311 added to the World War Veterans’ Act, 1924,

by. the Act of May 29, 1928, c. 875, sec. 16, 45 Stat. 964, 970-

971, as amended July 3, 1930, C., 849, sec. 25, 46 Stat. 991, 1002

(Appendix: infra, pp. 21-98.)

*°A ppendix, infra, p. 19.

14 ie =

such insurance and to be invested and administered

separate and apart from funds derived from yearly

renewable term insurance.”

It was further provided that this fund should be

available to meet all liabilities on account of Gov-

‘ernment life insurance (except “‘the expenses of

administration and the excess mortality’ and dis-

ability cost resulting from the hazards of war”’,

which were borne by the United States), and, to

that end, the Bureau was authorized “‘to. set aside

out of the fund so collected such reserve funds as

may be required, under -accepted actuarial prin-

ciples, to meet all liabilities under such insurance. ’””

It was no doubt anticipated that a large part of

such liabilities would consist of permanent total dis-

ability benefit payments, especially since the con-

11 Prior to this Act no provision was made for the deposit

of Government life insurance premiums in any fund separate

from those derived from yearly renewable term insurance,

which were required to be deposited in the military and

naval insurance appropriation fund. (Sec. 20, added to the

War Risk Insurance Act by the Act of October 6, 1917,

c. 105, 40 Stat. 398, 400 (Appendis, énfra, p. 18).) .

12 Section 403, added to the War Risk Insurance Act by

the Act of October 6, 1917. c. 105, 40 Stat. 398, 410 (Appen-

dix, infra, p. 20). Section 302 of the World War Veterans’

Act (June 7, 1924, c. 320, 43 Stat. 607, 625) added liability

for benefits payable for total permanent disability or death

“traceable to the extra hazard of the military or naval serv-

ice” to the costs to be borne by the Government.

18 Substantially similar provisions are contained in the

statute today. U.S. C., Title 38, Sec. 443.

15

tract provided no maximum age limit for those en-

titled tothem. Obviously, the efforts of the Bureau

to administer the fund so as to'‘‘meet all liabilities”?

might be seriously hampered by the assumption of

any more gratuitous risks. - The purpose of Con-

gress not to authorize such additions withéut an

increase of premium is shown by the fact that it

required an additional premium for the added risk

assumed under policies containing provisions for

the payment of separate benefits in the event of

total disability for a minimum period."

Thus it is evident that the interpretation by the

court below of the general clauses in the statute in-

voked by it conflicts not only with a well settled

rule of construction but also with the manifest pur-

pose of Congress to avoid, if possible, all costs to

the Government in connection with Government

life insurance except those specified in the statute."

However, even were ‘it assumed that the Director .

of the Veterans Bureau (or his successor, the Ad-

ministrator of Veterans’ Affairs) was authorized

‘to make the total permanent disability provisions

in Government life insurance contracts conform to

those usually found in commer¢éial insurance poli-

cles regardless of the burden thus undertaken,

there would, nevertheless, seem to be no justifica-

tion for including a provision making the loss of

* Note 9, supra, p. 13.

** Note 12, supra, p. 14.

16

hearing of both ears a conclusively presumptive to-

tal permanent disability. Such a clause is not only

not in general use, but no policy containing it has

come to our attention. See Amrhein’s The Liber-

alization of the Life Insurance Contract, 1933, pp.

282-283, 361-363 (pars. (8) and (16)); and com-

pare The Handy Guide to Standard and Special

Contracts, 1934 (The Spectator Company).

_ In short, it is submitted that the provision in

paragraph 11 (a).of respondent’s policy which pre- .

sumes total permanent disability from the loss of

hearing of both ears regardless of the fact, is with-

out authority in law and invalid, and the court

below erred in holding otherwise. Furthermore,

the trial court’s chayge to the jury that they might

allow a recovery weal that provision was preju-

dicial to the defendant since it is to be presumed

that the verdict was found under it in the absence

of anything in the record to the contrary. Yazoo

-& M.V.R. R. Co. v. Mullins, 249 U.S. 531, 533;

Fillippon v. Albion Vein Slate Co., 250 U. S. 76, 82.

Even if the trial court’s charge had not been

prejudicial, it appears by the undisputed facts set

out.in the Statement, supra, pp. 4-5, that the evi-

dence would not have justified a verdict for the

plaintiff founded upon total permanent disability

im fact. . Cf. Miller v. Umted States, 294 U.S. 435,

440-442, i

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a — ee,

17

&

‘CONCLUSION

For the reasons stated it is reupeetQially sub-

mitted that the judgment of the Circuit ee of

Appeals meine be reversed.

Staniey REep,

Solicitor General.

Wi G. BEARDSLEE,

' Director, Bufeon of War Risk Intigation.

. 4 | Wuovr C: Picxkert,

| FenpaLt Marsoury,

Special Assistants to The Attorney General.

: W. Marvin Surru,

oS Meus,

DECEMBER 1935.

Tid nici ee aaa Ee ee emer ee cadena

APPENDIX

STATUTES AND REGULATIONS INVOLVED

Pertinent sections. of the War Risk Insurance

Act, as amended, provide in part as follows:

Src. 13. That the director, subject to the

general direction of the Secretary of the

Treasury, shall administer, execute, and en-

force the provisions of this Act, and for that

purpose have full power and authority to

make rules and regulations, not inconsistent

- with the provisions of this Act, necessary or

appropriate to carry out. its purposes,

* * * [October 6, 1917, ¢. 105, sec. 2, 40

Stat. 398, 399. ] |

Src. 20. That there is hereby appropri-

_-ated, from any money in the Treasury not

otherwise appropriated, the sum, of $23,000,-

000, to be known as the military and naval

insurance appropriation.. All premiums

that may be collected for the insurance pro-

vided by the provisions of Article IV shall

be deposited and covered into the Treasury

to the credit of this appropriation.

Such sum, including all premium pay- |

ments, is hereby made available for the pay-

ment of the liabilities of the United States

incurred under contracts of insurance made

under the provisions of Article IV. Pay-

ments from this appropriation shall be made

upon and in accordance with awards by the

director. [October 6, 1917, c. 105, sec. 2, 40

Stat. 398, 400. ] ;

(18)

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Sec. 18, That all premiums paid on:account

of insurance converted under the provisions

of Article IV of the War Risk Insurance

Act shall be deposited and covered into the

Treasury to the credit of the United States

Government life insurance fund and shall

be available for the payment of losses, div-

idends, refunds, and other benefits provided

for under such insurance. Payments from

this fund shall be made upon and in accord-

arice with awards by the director.

The Bureau of War Risk Insurance is

hereby authorized to set aside out of the

fund so collected such reserve funds as may —

be required, under accepted actuarial prin-

ciples, to meet all liabilities under such in-

surance; and the Secretary of the Treasury

is hereby authorized to invest and reinvest

the said United States Government life in-

surance fund, or any part thereof, in in-

terest-bearing obligations of the United

States and to sell the obligations for the

purposes of the said fund. [December 24,

1919, c. 16, 41 Stat. 371, 376. ]

Sec. 400. That in order to give to every

commissioned officer and enlisted man and

to every member of the Army Nurse Corps

(female) and of the Navy Nurse Corps (fe-

male) when employed in active service under

the War Department or Navy Department

greater protection for themselves and their

dependents than is provided in Article ITI, _

_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 than $10,000, upon the pay-

ment of the premiums as hereinafter pro-

- vided. [October 6, 1917, c. 105, see. 2, 40

Stat. 398, 409.] ,

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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 and

conditions of such contract of insurance.

* * * Provisions for maturity at certain

ages, for continuous installments during the

‘life of the insured: or beneficiaries, or both,

for cash, loan, paid-up and extended values,

dividends from gains and savings, and such

other provisions for the protection and .ad-

vantage of and for alternative benefits to the

insured: and the beneficiaries as may be

found to be reasonable and practicable, may

be provided for in the contract of insurance,

or from time to time by regulations. * * *

[October 6, 1917, ¢. 105, sec. 2, 40 Stat. 398,

409. ] ‘

Src. 403. That the United States shall

bear the expenses of administration and 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 Table of Mortality

and interest at three and one-half per

centum per annum. [October 6, 1917, ¢. 105,

sec. 2, 40 Stat. 398, 410. ] |

Sc. 404.. That during the period of war

and thereafter until converted the insurance

shall be term insurance for successive terms

of one year each. Not later than five years

‘after the date of the terminati&n of the war

as declared by proclamation @f the Presi-

dent of the United States, the term insur-

ance shall be converted, without medical

examination, into such form or forms of. in-

surance as may be prescribed by regulations

and as the insured may request. . Regula-

tions shall provide for the right to convert

into ordinary life, .twenty payment life,

endowment maturing at age sixty-two and

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into other usual forms of insurance and shall

prescribe the time and method of payment

of the premiums thereon, but payments of

premiums in advance shall not be required’

for periods of more than one month each and

may be deducted from the pay or deposit of

the insured or be otherwise made at.his elec-

tion. [October 6, 1917, c. 105, sec. 2, 40 Stat.

398, 410. ] | 3

: Section 311 of the World War Veterans’ Act,

1924, as amended, provides as follows:

Sec. 311. The director is, hereby author-

ized and directed to include in United States

Government life (converted) insurance pol-

icies provision whereby an insured, who is

totally disabled as a result of disease oy in-

jury for a period of four consecutive months

or more before attaining the age ri hr

five years and before: default in payment of

any premium, shall be paid disability bene-

fits at the rate of $5.75 monthly for each

$1,000 of converted insurance in force when

total disability benefits become payable. The

amount of such monthly payment under the

provisions of this section shall not be re-

duced because of payment of permanent and

total disability benefits under the United

States Government life (converted) insur-

ance policy. - Such payments shall be effec-

tive as of the first day of the fifth consecu-

tive month, and shall be made monthly dur-

ing the continuance of such total disability.

Such payments shall be concurrent with or

independent of permanent total disability

benefits under the United States Govern-

ment life (converted) insurance policy. In

addition to the monthly disability benefits

the payment of premiums on the United

States Government life (converted) insur-

22

ance policy and for the total disability bene-

fits authorized by this section shali be waived

during the contimuance of such total disabil-

ity. culations shall provide for reexam-

inations of beneficiaries under this section;

and, in the event that it is found, that an in-

stired is no longer totally disabled, the waiver

of premiums and payment of benefits shall

cease and the United States Government life

(converted) insurance policy, including the.

total disability provision authorized by this

section, may be ‘continued by payment of

premiums as provided in said policy and the

total disability provision authorized by this

section. Neither the dividends nor the

amount payable in any settlement under any

United States Government life (converted)

insurance policy shall be decreased because

of disability benefits granted under the pro-

visions of this section. The payment of total

disability benefits shall not prejudice the

right of any insured, who is-totally and per-

manently disabled, to total permanent dis-

ability benefits under his United States Gov-

_ernment life (converted) insurance policy:

Provided, That the provision authorized by

this section shall not be included in any

United. States Government life (converted)

insurance policy Meretofore or hereafter is-

sued, except upon application, payment of

. — by the insured, and proot of good

ealth satisfactory to-the director. The

benefit granted under this section shall be

on the basis of multiples of $500, and not less

than $1,000 or more than the amount of

United States Government life (converted)

insurance in force at time of application.

The director shell determine the amount of

the monthly premium to cover the benefits of

this séction, and in order to confinue such

benefits in force the monthly premiums shall

23°

be payable until the insured attains the age

of sixty-five years or until the prior maturi

of the policy. In all other respects such /

monthly premium shall be payable under the )

same terms and conditions as the regular

monthly premium on the United States Gov-

ernment life (converted) insurance policy.

[May 29, 1928, c. 875, sec. 16, 45 Stat. 964, _

970; July 3, 1930, c. 849, sec. 25, 46 Stat. 991,

1002 (U.S. C., Title 88, sec. 512 b).] (Italics

ours. )

VETERANS’ ADMINISTRATION REGULATIONS

DEFINITION OF TOTAL PERMANENT DISABILITY

3121. Total permanent disability as re-

ferred to in a United States Goverriment

life-insurance policy, is any impairment of

mind or body which continuously renders it

impossible for the disabled person to follow

any substantially gainful occupation and

which is founded upon conditions which ren-

der it reasonably certain that the total dis-

ability will continue throughout the life of

the disabled person. The total permanent

disability benefits may relate back to a date

not exceeding six months prior to receipt of

due proof of total permanent disability and

any premium paid after receipt of due proof

of total permanent disability and within

the six months shall be refunded without

interest.

STATUTORY TOTAL PERMANENT DISABILITIES

3122. Without prejudice to any other

cause of disability, the permanent loss of

the use of hoth feet, or both hands, or both °

eyes, or of one foot and one hand, or of one

foot and one eye, or of one hand and one

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eye, or the loss of hearing of both ears, or

the organic loss of speech, or becoming per-

- manently helpless or permanently bedrid- -

den, shall be deemed to be total ‘permanent

disability under. United States Government ~~~

life insurance; and monthly installments of

insurance for any of these specifically enu-

‘tmerated causés of total permanent disability

sh..l accrue from the date of such total per-

manent disability, and any premiums paid

after the date of such total permanent dis- —

ability shall be refunded without unterest.

[Promulgated March 1930.] oo

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U.S. GOVERNMENT PRINTING OFFICE: 1938