Hegg v. United States

• Decision Date: 09 September 1927
• Parties: HEGG et al. v. UNITED STATES.
• Court: U.S. District Court — District of Minnesota

21 F.2d 622 (1927)

HEGG et al. v. UNITED STATES.

District Court, D. Minnesota, Fourth Division.

September 9, 1927.

Schwartz & Halpern, of Minneapolis, Minn., for plaintiffs.

Lafayette French, Jr., U. S. Atty., of St. Paul, Minn., and J. H. Fraine, Acting Regional Atty., U. S. Veterans' Bureau, of Minneapolis, Minn., for defendant.

JOHN B. SANBORN, District Judge.

The cause was submitted upon a stipulation of facts.

Paul Edward Carlson was in the military service of the United States between June 1, 1918, and the month of June, 1919. While in such service, there was issued to him a contract of war risk insurance in the sum of $10,000, under the terms and provisions of the War Risk Insurance Act of October 6, 1917 (40 Stat. 398), designating his sister, Hannah Hegg, as beneficiary. During all the time of his service, there was deducted from his pay as a soldier a sufficient sum to pay the monthly premiums provided by law to be paid upon said contract. Subsequent to his discharge in June, 1919, Paul Edward Carlson paid no additional premiums, and said contract of insurance lapsed, except in so far as it is affected by the provisions of section 305 of the World War Veterans' Act (38 USCA § 516; Comp. St. § 9127½ — 305).

Paul Edward Carlson was awarded by the defendant permanent total disability compensation from August 27, 1922, and was paid such compensation until the time of his death, December 16, 1923. After his death, and on the 14th day of February, 1924, the United States Veterans' Bureau made a review of the evidence in his case, and upon such review made a rating awarding to said Paul Edward Carlson temporary partial disability 10 per cent. from date of discharge to February 16, 1920; temporary partial 25 per cent. from February 17, 1920, to August 12, 1922; temporary total from August 13, 1922, to August 26, 1922; and permanent total on and after August 27, 1922, to the date of death.

At the time of the death of Paul Edward Carlson, he had not collected from the United States the compensation due on the first three items of the award, to wit: Temporary partial 10 per cent. from date of discharge to February 16, 1920; temporary partial 25 per cent. from February 17, 1920, to August 12, 1922; temporary total from August 13, 1922, to August 26, 1922. The amount of compensation due and owing on said award was sufficient, under section 305 of the World War Veterans' Act, to revive $9,708.30 of the original $10,000 insurance. No part of the said $9,708.30 has been paid to the plaintiffs, or either of them. Under the provisions of the War Risk Insurance Act, and on the rating above recited, there would have been due to Paul Edward Carlson the sum of $55.82 per month from August 27, 1922, to the date of his death, December 16, 1923, amounting to $894, and to some person the balance of the said sum of $9,708.30.

On April 29, 1926, the Assistant Director of the United States Veterans' Bureau wrote the following letter to the plaintiff Charles R. Vollmer:

"Dear Sir: It is desired to advise that the insurance in the amount of $9,708.30 under the $10,000 policy contracted for by the above-captioned deceased, has been revived and will be payable in monthly installments of $55.82 to the estate of the above-captioned deceased from August 27, 1922, to December 26, 1923, and to Mrs. Hannah Hegg, sister of the above-captioned deceased and sole designated beneficiary, on the same basis from December 27, 1923, to August 26, 1942.

"Inasmuch as the amount payable to the estate of the above-captioned deceased exceeds $500, it will be necessary that there be forwarded to this office certified copy of letters of administration upon this deceased soldier's estate, together with petition therefor. In the event this petition fails to disclose that there is due this soldier's estate approximately $894, there should be submitted, in lieu of this petition, a court certificate to the effect that it has been apprised of the fact that there is due this soldier's estate $894.

"The attached form 514 should be executed by Mrs. Hannah Hegg, in connection with the adjustment of insurance benefits payable to her under this soldier's policy."

On September 20, 1926, George E. Ijams, Assistant Director, wrote to counsel for plaintiff:

"Dear Sir: With further reference to this claim for war risk insurance, you are advised that no benefits can be allowed under section 305 of the World War Veterans' Act as amended July 2, 1926. The reason for this unfavorable decision is the proviso limiting the beneficiaries of revived insurance to the veteran, his widow, minor children or dependent parents. The evidence on file shows Mr. Carlson is not survived by any relative within these permitted classes."

Thereupon this suit was commenced to recover the amount due the estate of the deceased and the amount due the beneficiary under the contract of insurance.

The question in this case is as to when, if ever, the insurance contract issued to Paul Edward Carlson was revived under section 305 of the World War Veterans' Act.

Section 305, Act of June 7, 1924 (chapter 320, 43 Stat. 626), provides as follows:

"Where any person referring to insured under United States Veterans' Life Insurance policy has heretofore allowed his insurance to lapse while suffering from a compensable disability for which compensation was not collected and dies or has died, or becomes or has become permanently and totally disabled and at the time of such death or permanent total disability was or is entitled to compensation remaining uncollected, then and in that event so much of his insurance as said uncollected compensation, computed in all cases at the rate provided by section 302 of the War Risk Insurance Act as amended December 24, 1919, would purchase if applied as premiums when due, shall not be considered as lapsed; and the United States Veterans' Bureau is hereby authorized and directed to pay to said soldier, or his beneficiaries as the case may be, the amount of said insurance less the unpaid premiums and interest thereon at 5 per centum per annum compounded annually in installments as provided by law."

The Act of July 2, 1926, § 16 (chapter 723, 44 Stat. 799 38 USCA § 516), amended this section by adding the following proviso:

"Provided, That insurance hereafter revived under this section and section 309 by reason of...