Sawyer v. United States

• Decision Date: 04 January 1926
• Docket Number: No. 22.,22.
• Citation: 10 F.2d 416
• Parties: SAWYER v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

10 F.2d 416 (1926)

SAWYER v. UNITED STATES.

No. 22.

Circuit Court of Appeals, Second Circuit.

January 4, 1926.

Harry C. Barker, of Poughkeepsie, N. Y. (S. S. Ashbaugh and M. M. Ashbaugh, both of Washington, D. C., of counsel), for plaintiff in error.

Emory R. Buckner, U. S. Atty., of New York City (John M. Ryan, Asst. U. S. Atty., of New York City, and L. A. Lawlor, Associate Counsel, U. S. Veterans' Bureau, of Washington, D. C., of counsel), for the United States.

Before ROGERS, HOUGH, and MANTON, Circuit Judges.

ROGERS, Circuit Judge (after stating the facts as above).

This is an action brought by the plaintiff to recover on a certificate of insurance, in the sum of $10,000, issued to her brother, August Emerson, pursuant to the provisions of the War Risk Insurance Act of October 6, 1917, 40 Stat. pt. 1, p. 398, c. 105 (Comp. St. 1918, §§ 514k-514vv).

The Bureau of War Risk Insurance was established by the Act of September 2, 1914, 38 Stat. c. 293, p. 711 (Comp. St. §§ 514a-514vv). That act was confined to the insurance of American vessels and their cargoes against the risks of war. And the Act of October 6, 1917, extended war risk insurance and provided for the insurance of seamen and for those in the military and naval service. 40 Stat. pt. 1, c. 105, p. 398.

The Act of 1917, p. 399, adding section 13 to Act Sept. 2, 1914 (Comp. St. 1918, § 514kk), provided that the Director of the Bureau of War Risk Insurance, subject to the general direction of the Secretary of the Treasury, should have full power and authority to make rules and regulations not inconsistent with the provisions of the act and necessary or appropriate to carry out its purposes. It also gave him authority to decide all questions arising under the act, except as otherwise provided in sections 5 (Comp. St. § 514e) and 405. Section 5 we are not concerned with in this case. Section 405, 40 Stat. p. 410, provides:

"That in the event of disagreement as to a claim under the contract of insurance between the bureau and any beneficiary or beneficiaries thereunder, an action on the claim may be brought against the United States in the District Court of the United States in and for the district in which such beneficiaries or any one of them resides. The court, as part of its judgment, shall determine and allow such reasonable attorney's fees, not to exceed ten per centum of the amount recovered, to be paid by the claimant on behalf of whom such proceedings are instituted to his attorney; and it shall be unlawful for the attorney or for any other person acting as claim agent or otherwise to ask for, contract for, or receive any other compensation because of such action. * * *"

This Act of October 6, 1917, was amended by the Act of May 20, 1918, and it provided that an action on a war risk insurance claim might be brought against the United States in the District Court of the United States in and for the district in which the beneficiaries or any one of them resides, and whenever judgment was rendered the court should determine and allow such reasonable attorney's fees, not to exceed five per centum of the amount recovered, to be paid by the claimant, in behalf of whom such proceedings were instituted, to his attorney. And it further provided that any person who directly or indirectly solicited, contracted for, charged, or received any fee or compensation except as provided for in the act, or who attempted so to do, should be guilty of a misdemeanor and for each and every offense should be punishable by a fine of not more than $500, or by imprisonment at hard labor for not more than two years, or by both such fine and imprisonment. 40 Stat. c. 77, p. 555 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 514kk).

This suit is brought under the authority of section 13 of the act of 1917, as amended by the act of 1918.

The Act of August 29, 1916, 39 Stat. c. 417, p. 587 (Comp. St. § 2900½a et seq.), established the Naval Reserve Force. It enacted:

"The Naval Reserve Force shall be composed of citizens of the United States who, by enrolling under regulations prescribed by the Secretary of the Navy or by transfer thereto as in this act provided, obligate themselves to serve in the Navy in time of war or during the existence of a national emergency, declared by the President: Provided, that citizens of the insular possessions of the United States may enroll in the Naval Auxiliary Reserve."

And it provides that "members of the Naval Reserve Force may be ordered into active service in the Navy by the President in time of war or when, in his opinion, a national emergency exists." It prescribes the amount of "retainer pay" which the members of the force shall receive, and that "retainer pay shall be paid annually or at shorter intervals, as the Secretary of the Navy, in his discretion, may direct." And it also provides that "all members of the Naval Reserve Force shall, when actively employed as set forth in this act, be entitled to the same pay, allowances, gratuities, and other emoluments as officers and enlisted men of the naval service on active duty of corresponding rank or rating and of the same length of service."

The Act of August 29, 1916, making appropriations for the Naval Service, provided that those who may be commissioned after they have established their qualifications to the satisfaction of the Secretary of the Navy "shall not be deprived of the retainer pay, allowances, or gratuities" to which they would be otherwise entitled. The act also provided that men in the Naval Reserve Force, upon completing 30 years service, including naval and fleet naval reserve service, may upon their own request be placed on the retired list of the Navy, "with the pay they were then receiving plus the allowances to which enlisted men of the same rating are entitled on retirement after thirty years' naval service." Comp. St. § 2900½b(9). And it further provided that the Secretary of the Navy in time of war or when a national emergency exists is authorized to call any enlisted man on the retired list into active service, and that when so employed the man shall receive "the same pay and allowances as he was receiving when placed on the retired list." Then it is further provided that "the annual retainer pay" of members of the Naval Reserve, after confirmation in rank or rating, "shall be two months' base pay of the corresponding rank or rating in the Navy." 39 Stat. c. 417, p. 591 (Comp. St. § 2900½c4).

The same act prescribing the amount of "pay" to be paid to men enrolled in the Fleet Naval Reserve declares "such pay" is "to be considered as retainer pay" for the obligation on the part of such members to serve in the Navy in time of war or national emergency. 39 Stat. c. 417, p. 590 (Comp. St. § 2900½b4).

Emerson, on January 9, 1918, enlisted in the United States Naval Reserve Force for a term of four years, and he continued in the active service of the Naval Reserve Force down to October 31, 1919, when he was honorably discharged therefrom, and from that time to the date of his death he continued a member of that force in inactive service. In his application for insurance Emerson stated:

"I hereby apply for insurance in the sum of $10,000 payable as provided in the War Risk Insurance Act, to myself during total permanent disability and from and after my death to the following persons in the following amounts."

He named his sister, Georgie E. Sawyer, plaintiff herein, as the beneficiary, and she was the sole beneficiary named. He concluded his application with the following statement:

"I authorize the necessary monthly deduction from my pay, or, if insufficient, from any deposit with the United States, in payment of the premiums as they become due, unless they be otherwise paid.

"I offer this application, and it is to be deemed made, as of the date of signature, with premiums commencing from that date and payable at the end of each calendar month, beginning with the month in which application is made."

The Secretary of the Treasury issued to him the following certificate, being certificate No. 4711260:

"Date insurance effective — Oct. 8, 1918.

"This certifies that August Emerson has applied for insurance in the amount of $10,000, payable in case of death or total permanent disability in monthly installments of $57.50.

"Subject to the payment of the premiums required, this insurance is granted under the authority of an act amending `An act entitled "An act to authorize the establishment of a Bureau of War Risk Insurance in the Treasury Department," approved September 2, 1914, and for other purposes,' approved October 6, 1917, and subject in all respects 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 the application for this insurance, and the terms and conditions published under authority of the act, shall constitute the contract."

On July 25, 1919, the Director of the Bureau of War Risk Insurance with the approval of the Secretary of the Treasury promulgated a regulation which contained the following provision:

"1. When any person insured under the provisions of the War Risk Insurance Act leaves the active military or naval service for reasons not precluding the continuation of insurance, the monthly premium which, had he remained in the service, would have been payable on the last day of the calendar month following the date of his discharge, and thereafter monthly premiums shall be payable on the first day of each calendar month. The premium payable on the first day of any calendar month, may, however, be paid at any time during such month, which shall constitute a grace period for the payment of such payment. If the premium is not paid before the expiration of such grace period the insurance shall lapse and terminate."

This regulation makes a distinction between the payment of premiums in the case of those who are in the active...