294 U.S. 120 (1935), 210, Wilber National Bank of Oneonta v. United States

Docket Nº:No. 210
Citation:294 U.S. 120, 55 S.Ct. 362, 79 L.Ed. 798
Party Name:Wilber National Bank of Oneonta v. United States
Case Date:February 04, 1935
Court:United States Supreme Court

Page 120

294 U.S. 120 (1935)

55 S.Ct. 362, 79 L.Ed. 798

Wilber National Bank of Oneonta


United States

No. 210

United States Supreme Court

Feb. 4, 1935

Argued December 7, 1934




1. As a general rule, the United States is not estopped by arrangements or agreements of its agents to do what the law does not sanction, and those who deal with its agents are charged with notice of the limitations of their powers. P. 123.

2. Quaere, how far, if at all, these general rules are subject to modification where the Government enters into transactions of a commercial nature. P. 124.

3. Assuming that the United States may be estopped in its insurance business, it is not bound to pay a policy which had lapsed and become nonreinstatable merely because the Veterans' Bureau did not notify the insured of how a cash payment by him was allocated to premiums and other charges, or notify him of the default, such notices not being customary in the Bureau's practice, nor because the Bureau did not promptly acknowledge sums which were remitted to it as premium payments after the policy had lapsed and when reinstatement had become impossible. P. 124.

69 F.2d 526 affirmed.

Certiorari, 293 U.S. 541, to review the reversal of a judgment recovered against the United States in an action on a government life insurance policy.

MCREYNOLDS, J., lead opinion

MR. JUSTICE McREYNOLDS delivered the opinion of the Court.

July 1, 1927, James Patrick Mahar applied to the United States Veterans' Bureau for reinstatement of $5,000 insurance upon his life, and with the application

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sent check for $13.90. The allocation of this sum then suggested by him gives no indication that he thought it sufficient to meet any premium due after August 1st.

September 19th, a policy in the usual form issued, and was delivered. It showed payment of the monthly premium -- $3.95 -- due July 1st, and that like payment would be necessary on the first of each succeeding month. Also:

. . . T his policy takes effect on the first day of July, nineteen hundred and twenty-seven. . . .

"Premiums are due and payable monthly in advance," and "if any premium be not paid when due, this policy shall cease and become void . . . ," but that

a grace of thirty-one days without interest will be allowed during which time the policy will remain in force. . . . This policy, if it has not been surrendered for a cash value, may be reinstated at any time after lapse upon evidence of the insurability of the insured satisfactory to the Director of the United States Veterans' Bureau, and upon the payment of all premiums in arrears, with interest from their several due dates at the rate of five percentum per annum, and the payment or reinstatement of any indebtedness which existed at the time of such default, with policy loan interest.

A letter dated July 29th, acknowledging receipt of the check which accompanied the application, contained the following clause:

Important. -- Insurance under the application evidenced by the above remittance shall be effective subject to the World War Veterans' Act, 1924, and Regulations. . . .

Neither this letter nor any other notice informed the assured how the $13.90 had been allocated, but, under the statute and regulations, it sufficed to pay prescribed charges and two premiums on the $5,000 policy -- July 1st and August 1st; also $2.65 for credit on the premium due September 1st.

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Two remittances of $3.95 by or for the assured were made to the Bureau November 2d and December 20th, respectively. These were retained, but were not acknowledged until after the assured's death. After issuance of the policy, no notice was given the assured concerning payment of premiums, default, or that the policy had lapsed or was about to do so. Apparently the only communications sent prior to his death were the receipt of July 29th, and the...

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