Leyerly v. United States, 3456.

• Decision Date: 19 May 1947
• Docket Number: No. 3456.,3456.
• Citation: 162 F.2d 79
• Parties: LEYERLY v. UNITED STATES et al.
• Court: U.S. Court of Appeals — Tenth Circuit

162 F.2d 79 (1947)

LEYERLY v. UNITED STATES et al.

No. 3456.

Circuit Court of Appeals, Tenth Circuit.

May 19, 1947.

COPYRIGHT MATERIAL OMITTED

John H. Tippit, of Denver, Colo., for appellant.

Albert Ellis Radinsky, of Denver, Colo., for appellees Eva Alice and Harry Taylor.

Before PHILLIPS, BRATTON, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

On December 20, 1941, the Congress amended the National Service Life Insurance Act of 1940, 38 U.S.C.A. § 801 et seq., 54 Stat. 1008, to provide in material part that if any person in active military or naval service on or after October 8, 1940, dies in line of duty within 120 days after December 20, 1941, without having in force at the time of death National Service Life or other war risk insurance aggregating at least $5,000, the said person shall be deemed to have applied for and to have been granted insurance in the sum of $5,000 as of the date of his entry into active service, or October 8, 1940, whichever is later. The insurance thus automatically and gratuitously provided was payable in accordance with Section 602(h) of the 1940 Act, supra, "except that payments hereunder shall be made only to the following beneficiaries in the order named * * * (C) If no widow or widower entitled thereto, or child, to the dependent mother or father of the insured, if living, in equal shares." Sec. 10, Pub.Law 360, approved Dec. 20, 1941, 55 Stat. 844, 846, 38 U.S.C.A. § 802(d) (2).

John Robert Leyerly entered the military service on or about March 20, 1941, and died in line of active duty on February 8, 1942, without widow or child. At the time of his death, he had applied for and had been granted National Service Life Insurance in the sum of $2,000, and had designated his brother and sister as beneficiaries. Thus, automatic or gratuitous insurance provided under the 1941 Amendment, supra, in the sum of $3,000 is payable to his dependent mother or father, if living, in equal shares.

Neither the original nor the Amendatory Act defined the terms "parent," "father" or "mother," and to clarify existing legislation, Congress on July 11, 1942, added subsection (f) to Section 601 of the 1940 Act as follows: "The terms `parent,' `father,' and `mother' include a father, mother, father through adoption, mother through adoption, persons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than one year, * * *." Sec. 7 of Pub. Law 667, 56 Stat. 657, 659, 38 U.S.C.A. § 801(f).

This lawsuit is primarily a contest between Harry and Eva Alice Taylor, as persons claiming to have stood in loco parentis to the insured, and Helen Leyerly, the natural mother, for the $3,000 insurance. The trial court held for the Taylors and Helen Leyerly has appealed.

Helen Leyerly and Eva Alice Taylor each filed timely claims with the Veterans Administration for the payment of the insurance benefits. The Veterans Administration recognized the natural mother as the person who last bore that relationship to the insured, and accordingly proposed to pay her the insurance benefits. When Eva Alice Taylor's claim was denied by the Veterans Administration, she brought this suit jointly with her husband, Harry Taylor, in the District Court under Section 617 of the Act of 1940, 38 U.S.C.A. § 817, to recover the insurance, alleging that at the time of the insured's death, they stood in loco parentis to him, and are dependent father and mother within the meaning of the Act. The joint complaint alleged the timely filing of the claim and its denial by the Veterans Administration. The prayer was for a judgment against the Government for $3,000, to be paid in accordance with the terms of the Act, with interest and attorney fees.

The Government answered, admitting the insured's entry into the service, his death as alleged, and that the sum of $3,000 was payable as automatic or gratuitous insurance to qualified beneficiaries. The answer specifically denied, however, that the Taylors were dependent father and mother within the meaning of the Act. It admitted the filing of a claim with the Veterans Administration by Eva Alice Taylor, and its denial; that a consequent disagreement contemplated by Section 617 existed between her and the government, but specifically denied that her husband had ever filed a claim, or that the requisite "disagreement" existed between the government and him. Jurisdiction of the court over the suit of Harry Taylor was challenged.

By way of "counterclaim for interpleader," the government alleged the filing of a claim for the insurance by Helen Leyerly, the natural mother; that "substantial questions exist (1) as to whether the defendant is obligated for said insurance; and (2) if obligated, whether it is obligated to Eva Alice Taylor, one of plaintiffs herein, or to Helen Leyerly, decedent's mother, or someone else, pursuant to the provisions of the National Service Life Insurance Act of 1940, as amended, and that in order that all claims to said insurance benefits may be judicially determined and a multiplicity of suits thereby avoided, it is essential to determine the extent, if any, of this defendant's obligation, and the person or persons to whom this defendant is obligated." The prayer was that Helen Leyerly be made a party to the suit, and that the court adjudge the liability of the government, if any, and to whom.

Thereafter Helen Leyerly, upon order of the court, was made a third party defendant, and she answered alleging that the father of the insured was deceased; that she was the dependent mother of the insured, and therefore entitled to the proceeds of the life insurance. She specifically denied that Harry Taylor had ever filed a claim with the Veterans Administration, or that a "disagreement" existed between him and the government. She prayed judgment for the amount of the insurance, with interest and attorney fees.

After hearing on the issues as thus cast, the trial court found that the Taylors having reared the insured and acted as his parents since he was five and one-half months old, until he entered the service, stood in loco parentis, and being dependent upon him for support, were dependent mother and father within the meaning of the Act. The court also found that Helen Leyerly, the natural mother, being unable to rear the insured because of illness, did not last bear the relationship of parent to him, but "relinquished" care, custody and control to the Taylors when he was five and one-half months old. A joint judgment was entered for the Taylors in the sum of $3,000, and the action was dismissed as to Helen Leyerly.

The government has not appealed from this judgment, but Helen Leyerly's first contention on appeal is that the court lacked jurisdiction of the subject matter as respects appellee, Harry Taylor, because the prerequisite "disagreement" did not exist between him and the government when suit was filed.

The jurisdiction of the court in this class of cases is conferred by Section 617 of the 1940 Act, as amended by Section 6 of the 1942 Amendment, 56 Stat. 659. It pertinently provides that "In the event of disagreement as to any claim arising under this chapter, suit may be brought in the same manner and subject to the same conditions and limitations as are applicable to the United States Government Life (converted) Insurance under the provisions of sections 19 and 500 of the World War Veterans Act, 1924, as amended * * *."

Section 19 of the 1924 Act, as amended, 38 U.S.C.A. § 445, and as applicable here, provides in material part that "In the event of disagreement as to claim, * * * under a contract of insurance between the Veterans' Administration and any person or persons claiming thereunder, an action on the claim may be brought against the United States. * * * All persons having or claiming to have an interest in such insurance may be made parties to such suit * * *. In all cases where the Veterans' Administration acknowledges the indebtedness of the United States upon any such contract of insurance and there is a dispute as to the person or persons entitled to payment, a suit in the nature of a bill of interpleader may be brought by the Veterans' Administration in the name of the United States against all persons having or claiming to have any interest in such insurance * * *."

Construing the foregoing statute, we have pointed out that a suit on a war risk insurance contract is a suit against the Government, and that one of the conditions of its consent to be sued is the existence of a "disagreement" between the Veterans Administration and the claimant. In other words, a disagreement is a jurisdictional prerequisite to the maintenance of a suit on the insurance contract. McLaughlin v. United States, 10 Cir., 74 F.2d 506; United States v. Journey, 10 Cir., 82 F.2d 772. And a disagreement arises only when a claim has been filed with the Veterans Administration, and rejected. Wilson v. United States, 10 Cir., 70 F.2d 176. We have said that the purpose of requiring that a claim be filed as a prerequisite to the maintenance of a suit, is to give the government notice that a claim is being asserted, and thus afford it an opportunity to make investigation of the facts and determine its liability before incurring the expense of litigation. Johnson v. United States, 10 Cir., 102 F.2d 729. See also Coffey v. United States, 7 Cir., 97 F.2d 762, 117 A.L.R. 940; United States v. Wallace, 10 Cir., 123 F.2d 484; United States v. Brundage, 6 Cir., 136 F.2d 206.

As a jurisdictional basis for its judgment, the court found that "the plaintiffs filed a claim for insurance benefits * * *; that said claims were denied by the Administrator of Veteran Affairs, as disclosed by letter dated June 5, 1945." But appellees admit, as they must, that Harry Taylor did not file a claim with the Veterans Administration, rather they rely upon the claim filed By Mrs. Taylor, its denial,...