United States v. Hendler, 5060.

• Decision Date: 26 July 1955
• Docket Number: No. 5060.,5060.
• Parties: UNITED STATES of America, Appellant, v. Irwin Pincy HENDLER, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

225 F.2d 106 (1955)

UNITED STATES of America, Appellant, v. Irwin Pincy HENDLER, Appellee.

No. 5060.

United States Court of Appeals Tenth Circuit.

July 26, 1955.

Lester Jayson, Attorney, Department of Justice, Washington, D. C. (Warren E. Burger, Asst. Atty. Gen., Donald E. Kelley, U. S. Atty., Denver, Colo., Samuel D. Slade, Attorney, Department of

Justice, David A. Turner, Associate General Counsel and David C. Byrd, Attorney, Veterans' Administration, Washington, D. C., on the brief), for appellant.

Gordon Slatkin, Denver, Colo. (Joseph Mosko, Denver, Colo., on the brief), for appellee.

Before BRATTON, HUXMAN and PICKETT, Circuit Judges.

HUXMAN, Circuit Judge.

This is an appeal from an order of the United States District Court for the District of Colorado, sustaining defendant's motion to dismiss the Government's complaint for failure to state a cause of action. The sole question presented for determination is whether the United States is entitled to recover reimbursement from an individual previously in the military service for premiums guaranteed and paid on a policy of life insurance, pursuant to the provisions of Article IV of the Soldiers' and Sailors' Civil Relief Act of 1940, 50 U.S.C.A. Appendix § 501 et seq. (1940 Ed.).¹

The United States in its complaint against the defendant, Irwin Pincy Hendler, appellee herein, alleged in substance that prior to entering the military service the defendant had a contract of insurance covering his life; that he made application for the benefits and protection provided for in Article IV; that the application was duly approved by the Administrator of Veterans' Affairs; that the insured failed within two years after termination of his military service to pay the premiums becoming due upon the policy and not paid during such period of military service; that in accordance with the provisions of Article IV the United States paid to the insurer the amount of such premiums; and that there was due from the defendant to the United States the amount so paid together with interest, for which judgment was prayed. The district court sustained the motion to dismiss the action on the ground that the complaint failed to state a claim upon which relief could be granted.²

The pertinent sections of Article IV of the 1940 Act, under which this controversy arose, did not in express language make a serviceman receiving the benefits thereof personally liable for insurance premiums guaranteed and subsequently paid by the Government. Section 408, 50 U.S.C.A.Appendix, § 548 note gives the Government a lien on the policy to indemnify it against loss because of its guarantee of the suspended premium payments. Section 409 provides that in the event the military service of any person having obtained the benefit of the Act shall be terminated by death, the amount of any unpaid premiums with interest shall be deducted from the proceeds of the policy and included in the next monthly report of the insurer as premiums paid. Section 410 in part states that if the insured shall not within one year after the termination of his period of military service pay to the insurer all past due premiums with interest thereon the policy shall at the end of such year immediately lapse and become void, and the insurer shall thereupon become liable to pay the cash surrender value thereof. Section 411 provides that at the expiration of one year after the date when the Act ceases to be in force there shall be an account stated between each insurer and the United States, in which there shall be credited to the insurer the total amount of the certificates held as security together with interest thereon, and in which there shall be credited to the United States the amount of the cash surrender value of each policy lapsed or forfeited, as provided for in Section 410, but not in any case a greater amount on any policy than the total of the unpaid premiums with interest. Section 412 provides that if at the final accounting period a sum remains due the insurer such sum shall be certified by the Administrator of Veterans' Affairs to the Secretary of the Treasury, by whom the account so certified shall be paid.

Thus under the Act there are two specific methods of reimbursement for money expended by the Government for insurance premiums for servicemen who apply for the benefits of the Act. These are (1) payment out of the proceeds of policies that have matured, and (2) payment out of the accumulated cash surrender value of policies that have terminated under the Act. The question for our consideration is did Congress in the passage of the Act intend also to give the Government a personal cause of action against a surviving serviceman for sums paid in excess of the reserve value of the policy?

We think it is clear that the Government does not become primarily liable for the payment of premiums on insurance policies of servicemen who took advantage of the benefits of the Act. It is only a guarantor, guaranteeing payment thereof. It merely guarantees payment of such premiums as are not paid by policyholders who have come under the Act. It is well settled in the law that one who guarantees a debt of another and is required to pay the same is entitled to reimbursement from the principal debtor. This principle is so well settled that no citation of authority is necessary. Since the contract between the Government and the serviceman arising from the Act is one of guaranty, it must follow that the Government is entitled to reimbursement unless the Act itself compels a contrary conclusion. Whether the Act of 1940 contemplated that the Government was entitled to reimbursement is the crux of this case.

It must be conceded that the Act of 1940 does not provide for personal liability of the insured serviceman in specific terms. The Act has been considered by a number of courts.³ In all of them it has been treated as being ambiguous and subject to judicial construction. It is appellee's position that since the Act provides two definite ways of reimbursement and does not specifically provide for personal liability, by implication it limits the rights of recovery to the two methods provided therein and excludes any other method of recoupment. This argument comes with considerable force. We feel, however, that when the Act of 1940 and the Act of 1918, upon whch it is predicated, are considered against the legislative background of the objects sought to be accomplished, a contrary conclusion is required.

The first question concerns what material we look to in seeking legislative intent. Appellee contends that we must confine ourselves to committee reports and not consider congressional debates and hearings. With this we cannot agree, notwithstanding what is said in Lapina v. Williams, 1914, 232 U.S. 78, 90, 34 S.Ct. 196, 58 L.Ed. 515, and Duplex Printing Press Company v. Deering, 1921, 254 U.S. 443, 474-475, 41 S.Ct. 172, 65 L.Ed. 349. An examination of the later decisions of the Supreme Court warrants the statement that a court may go beyond committee reports to ascertain legislative intent. In the Supreme Court decisions already handed down in 1955 which are set out in footnote 4,⁴ the Supreme Court refers to and, to some extent at least, relies upon Congressional debates and upon statements made at hearings. Nor can it be said that the Supreme Court has not considered the problem. In two recent decisions the late Mr. Justice Jackson wrote strong concurring opinions admonishing the majority for its extensive use of material more remote than committee reports.⁵ The reasons for the more liberal rule are well stated by Mr. Justice Frankfurter in United States v. Universal C. I. T. Credit Corp., 344 U.S. 218, 221, 73 S.Ct. 227, 229, 97 L.Ed. 260, as follows: "Generalities about statutory construction help us little. They are not rules of law but merely axioms of experience. Boston Sand Co. v. United States, 278 U.S. 41, 48, 49 S.Ct. 52, 73 L.Ed. 170. They do not solve the special difficulties in construing a particular statute. The variables render every problem of statutory construction unique. See United States v. Jin Fuey Moy, 241 U.S. 394, 402, 36 S.Ct. 658, 659, 60 L.Ed. 1061. For that reason we may utilize, in construing a statute not unambiguous, all the light relevantly shed upon the words and the clause and the statute that express the purpose of Congress. Very early Chief Justice Marshall told us, `Where the mind labours to discover the design of the legislature, it seizes everything from which aid can be derived * * *.' United States v. Fisher, 2 Cranch 358, 386, 2 L.Ed. 304."

The first Soldiers' and Sailors' Civil Relief Act was passed in 1918. 40 Stat. 440. Since the Act of 1940 was a substantial reenactment of the Act of 1918 the history of that Act would seem pertinent. With respect to the provisions on reimbursement of the Government the two Acts are virtually identical. The subsequent legislation in 1942, concerning the right of recovery, and its legislative history is admissible to determine what Congress thought in 1940. See Great Northern Railway Co. v. United States, 1942, 315 U.S. 262, 277, 62 S.Ct. 529, 86 L.Ed. 836.

Most of the information of value concerning the 1918 Enactment is found in the hearings and the proposed bill which did not pass. The original bill purported to suspend or postpone the proceedings against servicemen for the duration of the war. It provided that defaulted insurance premiums would be charged to the policy as a loan and paid by the insured with interest at any time within six months after termination of the insured's military service. The insurance companies objected, asserting that it would compel the insurance companies to maintain policies in force despite nonpayment of premiums, contrary to the terms of the insurance contract; that in reality the serviceman was being given an option to pay or not to pay his defaulted premiums, as he saw fit, upon his return from the war...