Appendix — United States v. Lawson

APPENDIX

| The first authority to grant war risk insurance

was that contained in the Act of October 6, 1917,

c. 105, Sec. 2, 40 Stat. 399, 409-410, amending the

War Risk Insurance Act by adding the following

sections, among others:

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

(female) when employed in active service .

under the War Department or Navy De-

, partment greater protection for themselves

and their dependents than is provided in

Article III, the United States, upon appli-

cation to the bureau and without medical

examination, shall grant insurance against

the death or total permanent disability of

any such person in any multiple of $500, and

: not less than $1,000, or more than $10,000

i upon the payment of the premiums as here-

; inafter provided.

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

conditions of such contract of insurance.

The insurance shall * * * be payable

| only to a spouse, child, grandchild, parent,

, brother, or sister, and also during total and

| permanent disability to the injured person,

or to any or all of them. The insurance

shall be payable in two hundred and weed

equal monthly installments. * *

(18)

19

Bulletin No. 1 (Regulations and Procedure,

U.S. Veterans’ Bureau (1930), Part IT, pp. 1233,

1235) was promulgated by the Director of the Bu-

reau of War Risk Insurance, Treasury Depart-

ment, on October 15, 1917, and provides, in part, as

follows:

THE UNITED STATES OF AMERICA, TREASURY

DEPARTMENT, BUREAU OF WAR RISK INSUR-

ANCE

Under the authority granted by Congress

in an act * * * and subject in all re-

spects to the provisions of such act, of any

amendments thereto, and of all regulations

thereunder, now in force or hereafter

adopted, all of which, together with this pol-

icy, the application therefor, and the terms

and conditions published under authority of

the act, shall constitute the contract: _

Hereby insures from and after the

day of »19 ,John Doe, * * *

conditioned upon the payment of premiums

as herein provided, for the principal amount

of $5,000 converted into monthly installments

of $28.75 (the equivalent, when paid for 240

months, of the sum insured, on the basis of

interest at the rate of 314 nercent per an-

num), payable—

To the insured, if he/she, while this in-

surance is in force, shall become totally and

permanently disabled, commencing with

such disability as established by the award

of the director of the bureau and continu-

ing during such disability ; and

To the beneficiary or beneficiaries here-

inafter designated, commencing upon the

death of the insured, while the insurance is

in force, and (except as otherwise provided )

coutinuing for 240 months if no installments

20

have been paid for total and permanent dis-

ability or if any such installments have been

paid, then for a number of monthis sufficient

to make 240 inall: * * *.

Section 304 of the World War Veterans’ Act,

1924, as amended (U. 8S. C., Title 38, See. 515)

provides, in part:

In the event that all provisions of the rules

and regulations other than the requirements

as to the physical condition of the applicant

for insurance have been complied with an

application for reinstatement, in whole or

in part, of lapsed or canceled yearly renew-

able term insurance or United States Gov-

ernment life insurance (eonverted insur-

ance) made after June 7, 1924, may be ap-

proved if made within one year after July

2 1926, or within two years after the date

of lapse or cancellation: Provided, That the

applicant's disability is the result of an in-

jury or disease, or of an aggravation thereof,

suffered or contracted in the active military

or naval service during the World War:

Provided further, That the applicant during

his lifetime submits proof satisfactory to the

Administrator of Veterans’ Affairs showing

that he is not totally and permanently dis-

abled. As a condition, however, to the ae-

ceptance of an application for the reinstate-

ment of lapsed or canceled yearly renewable

term insurance, where the requirements as

to the physical condition of the applicant

have not been complied with, or, for the re-

instatement of the United States Govern-

ment life insurance (converted insurance),

the applicant shall be required to pay all the

back monthly premiums which would have

become payable if such insurance had not

21

lapsed, together with interest at the rate

of 5 per centum per annum, compounded

annually, on each premium from the date

said premium is due by the terms of the

Deere. * 7.

Section 205 of the World War Veterans’ Act,

1924 (U.S. C., Title 38, See. 494) provides:

Upon its own motion or upon application

the bureau may at any time review an award

and, in accordance with the facts found upon

such review, may end, diminish, or increase

the compensation previously awarded, or,

if compensation is increased, or if compen-

sation has been refused, reduced, or discon-

tinued, may (subject to the provisions of

Section 210 hereof) award compensation in

proportion to the degree of disability sus-

tained as of the date such degree of dis-

ability began, but not earlier than the date

of discharge or resignation. Except in

cases of fraud participated in by the bene-

ficiary, no reduction in compensation shall

be made retroactive, and no reduction or

discontinuance of compensation shall be

effective until the Ist day of the third ealen-

dar month next succeeding that in which

such reduction or discontinuance — is

determined.

22

Letter from the Administrator of Veterans’

Affairs to the Solicitor General:

3 Office of

The Administrator of

Veterans’ Affairs

VETERANS’ ADMINISTRATION,

Washington, January 14, 1941.

Honorable Francis Bippie,

The Solicitor General,

Department of Justice,

Washington, D.C.

My Dear Mr. Souicrror GENERAL: I have

your letter of January 11, 1941, in which

you inform me that you have under con-

sideration the question of filing a petition

for a Writ Certiorari in the case of Harry

Florian, Executor of the Last Will and Test-

ament of Anton Florian, Deceased Benefi-

ciary, Plaintiff-Appellant, vs. The United

States of America, Defendant-Appellee, and

inquire concerning the relation of that deci-

sion to the Administration’s practice and the

cost which might result from an administra-

tive application of the decision.

The point raised in Florian vs. The United

States has not been the subject of a specifie

formal administrative decision or written

issue, for the reason that such a declaration or

issue Was not regarded as necessary. Untilthe

present case the administrative interpreta-

tion on this point has never been questioned.”

The Veterans’ Administration and its prede-

*In this connection it should be noted that the various

service organizations have had access to the files of the

Veterans’ Administration by specific authority of statute

(see U. S. C., Title 38, Sections 456, 551) and, of course,

could not have been unaware of this interpretation.

23

cessors consistently adhered to the view that

Section 305 of the World War Veterans’ Act

contained no provision, either express or by

implication, for the revival of insurance

under a yearly renewable term contract by

reason of compensation arising subsequent to

the total permanent disability of the insured.

This practice has continued without change

under the several amendments to Section 305,

originally enacted June 7, 1924 and amended

in various particulars July 2, 1926 and May

29, 1928. The Section in its original form and

as it now stands contains no language which,

in the opinion of the Veterans’ Administra-

tion, indicates any intention to alter or

modify the administrative procedure in this

particular. Consequently, the decision of the

Cireuit Court of Appeals in the Florian ease

is unmistakably contrary to long continued

and uninterrupted administrative practice.

It is difficult to estimate with any degree

of accuracy the number of cases to which

the instant decision might apply, as there

are no statistics available to show the num-

ber of claims potentially affected, with the

natural result that there are also no precise

figures available as to the total amount of

insurance which may be revived if the

Florian case stands unchallenged.

If, however, the decision of the Circuit

Court of Appeals here is permitted to stand,

claims for insurance previously denied be-

cause there was no uncollected compensation

available at date of permanent and total dis-

ability will be revived where there was un-

collected compensation at the date of death.

The Florian decision would appear to have

potential application to any case in which

the first condition of Section 305, World

War Veterans’ Act, 1924, as amended, may

24

have been met (that is, where there was un-

collected compensation at date of lapse) and

where the insured died with compensation

uncollected which is payable only by reason

of an administrative rating of total and per-

manent disability. The first condition of

Section 305 was met in thousands of cases

because there were issued approximately

4,000,000 contracts of yearly renewable term

insurance, the vast majority of which lapsed

upon discharge. Virtually every case in

which the term insurance lapsed at discharge

and claim for compensation was made more

than sixty days after lapse and allowed as of

the date of discharge would meet the first

requirement of Section 305 of the World

War Veterans’ Act, 1924, as amended.

Probably in relatively few instances were

claims filed within sixty days from discharge

and even in these cases administrative action

with an award of compensation and an actual

payment could seldom be made until after

sixty days from discharge, owing to obvious

administrative difficulties and the volume of

work then involved. Claims for compensa-

tion have been filed in approximately one

and three-quarter million cases.

While a very accurate estimate may not

be given as to the number of cases where

posthumous ratings of total permanent dis-

ability have been made, these were numerous

because death in any case where there was a

chronic disease (as distinguished from an

accidental or unanticipated death) suggests

the likelihood of an earlier total permanent

disability; and it was the administrative

practice to make such findings after death

to insure payment to the estate of the vet-

eran of the full amount of benefits that might

be payable under the law even though the vet-

ORIEN

25

eran did not file claim on such basis prior to

his death. The foregoing analysis leads to

the conclusion, upon a most conservative ba-

sis, that the number of potential cases which

would be affected is extremely large. A

study indicates that the average amount of

term insurance in each instance would prob-

ably be about $7,000.00. On this premise the

total amount which would be payable if the

Florian case is to be given the effect which

it may be said to call for would ultimately

involve many millions. Permit me to urge

that every effort be exerted looking toward

the filing of a petition for a Writ of Cer-

tiorari in this matter.

Very truly yours,

(Sgd.) Frank T. Hings,

Frank T. Hines,

Administrator.

©. §. GOVERNMENT PRINTING OFFICE: ipat