Wilber Nat. Bank v. United States

• Citation: 69 F.2d 526
• Decision Date: 05 March 1934
• Docket Number: No. 315.,315.
• Parties: WILBER NAT. BANK OF ONEONTA, N. Y., v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

69 F.2d 526 (1934)

WILBER NAT. BANK OF ONEONTA, N. Y., v. UNITED STATES.

No. 315.

Circuit Court of Appeals, Second Circuit.

March 5, 1934.

Oliver D. Burden, U. S. Atty., of Syracuse, N. Y., Will G. Beardslee, Director, Bureau of War Risk Insurance, of Washington, D. C., and Wilbur C. Pickett, Sp. Asst. to Atty. Gen., for the United States.

Frank C. Huntington, of Oneonta, N. Y. (Sterling P. Harrington, of Oneonta, N. Y., of counsel), for appellee.

Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

MANTON, Circuit Judge.

The appellee brought this action, as administrator of the estate of the deceased, to recover upon a contract of the United States government life insurance issued effective July 1, 1927. The deceased was a World War veteran and held a war risk term insurance policy for $10,000, which lapsed August 31, 1919, through failure to pay the premium on August 1, 1919. In June, 1927, he applied for reinstatement of $5,000 of this insurance to be effective July 1, 1927. The requirements of reinstatement were payment of premiums on the $5,000 policy he desired reinstated for the lapsed month of August, 1919, which was $3.35, and one month's premium on the converted policy, $3.95.

About July 1, 1927, the insured remitted his check for $13.90 to pay for the lapsed month and for the months of July and August, 1927, and left a credit of $2.65 to be applied on account of $3.95 to become due September 1. The United States issued a receipt, dated July 29, 1927, for the remittance which 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, i. e., provided that previous term insurance be in force, or if lapsed, reinstatement thereof be approved by the Bureau; or if there be no previous term insurance that the applicant be entitled to Government Life Insurance; and that proper amount be tendered to cover the premium and that application be acceptable to the Bureau; otherwise the remittance will be returned to the depositor."

The policy was issued September 9, 1927, and received by the insured shortly thereafter. The insured was not advised as to how his remittance of $13.90 had been applied. On November 2 and December 20 remittances of $3.95 were sent and no acknowledgment or receipt was made until after the death of the insured. In September the insured became ill, and on October 17, 1927, he became incapacitated and died December 24, 1927. After his death an undated receipt for the $3.95 with the words, "tendered in payment of the premium due September 1, 1927," was received.

The appellee claimed the insurance. The claim was refused on the ground that the insurance had lapsed for nonpayment of premium due September 1, 1927. The grace period for September lapsed October 2, 1927.

Veterans' Bureau Regulation 14, subd. 2, declares the premium due on the 1st day of the month; if not paid when due, the insurance shall lapse as of that date, except that section 14, subd. 3, provides that the premium may be paid thereafter at any time within 31 days, exclusive of the due date, which shall constitute a grace period for the payment of such premium. During such grace period the insurance shall remain in force.

The court below held that the government was estopped from denying that the policy was not in effect on the date of the insured's death, by its conduct, and therefore granted a recovery. It is the appellee's contention that the United States government is bound by the act of its agents...