United States v. Henning

• Decision Date: 17 November 1952
• Docket Number: No. 10,10
• Citation: 97 L.Ed. 101,73 S.Ct. 114,344 U.S. 66
• Parties: UNITED STATES v. HENNING et al. Re
• Court: U.S. Supreme Court

344 U.S. 66

73 S.Ct. 114

97 L.Ed. 101

UNITED STATES

v HENNING et al.

No. 10.

Reargued Oct. 14, 1952.

Decided Nov. 17, 1952.

Rehearing Denied Dec. 22, 1952.

See 344 U.S. 910, 73 S.Ct. 327.

Mr. Morton Liftin, Washington, D.C., for petitioner.

Mr. Richard H. Lee, Boston, Mass., for respondent.

Mr. Justice CLARK delivered the opinion of the Court.

Conflicting claims to the proceeds of a policy of National Service Life Insurance frame the controversy before us. Disposition of the cause depends on our interpretation of the National Service Life Insurance Act of 1940, as amended, 38 U.S.C. § 801 et seq., 38 U.S.C.A. § 801 et seq., which in pertinent part¹ provides:

s 602(g). 'The insurance shall be payable only to a widow, widower, child * * *, parent, brother or sister of the insured. The insured shall have the right to designate the beneficiary or beneficiaries of the insurance, but only within the classes herein provided * * *.' s 601(f). 'The terms 'parent', 'father', and 'mother' include a father, mother, father through adoption, mother through adoption (and) 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 * * *.'

s 602(i). 'If no beneficiary is designated by the insured or if the designated beneficiary does not survive the insured, the beneficiary shall be determined in accordance with the order specified in subsection (h)(3) of this section and the insurance shall be payable in equal monthly installments in accordance with subsection (h) * * *. The right of any beneficiary to payment of any installments shall be conditioned upon his or her being alive to receive such payments. No person shall have a vested right to any installment or installments of any such insurance and any installments not paid to a beneficiary during such beneficiary's lifetime shall be paid to the beneficiary or beneficiaries within the permitted class next entitled to priority, as provided in subsection (h) * * *.'

s 602(h)(3). 'Any installments certain of insurance remaining unpaid at the death of any beneficiary shall be paid in equal monthly installments in an amount equal to the monthly installments paid to the first beneficiary, to the person or persons then in being within the classes hereinafter specified and in the order named, unless designated by the insured in a different order—

'(C) if no widow, widower, or child, to the parent or parents of the insured who last bore that relationship, if living, in equal shares; * * *.' s 602(j). 'No installments of such insurance shall be paid to the heirs or legal representatives as such of the insured or of any beneficiary, and in the event that no person within the permitted class survives to receive the insurance or any part thereof no payment of the unpaid installments shall be made * * *.'

The material facts are not disputed. Eugene C. Henning, a Naval Reservist insured under a $10,000 term policy of National Service Life Insurance which named his father as sole beneficiary,² died on July 4, 1945, in his country's service. Otto F. Henning, the father, died five months later, without having received any part of the policy's proceeds. Bessie, his second wife and the insured's stepmother, and Clara Belle, his former wife and the insured's natural mother, survived. Both survivors subsequently filed claims to the proceeds of the serviceman's policy. On June 30, 1949, during the pendency of an interpleader action for a judicial determination of the proper taker, Bessie died, leaving the natural mother as sole surviving claimant. The Government thereupon asserted that Bessie had last borne the parental relationship to the insured; that consequently Clara Belle could not come within the statutory class of devolutionary takers; and that, in the absence of cognizable claims to the proceeds, they escheat to the National Service Life Insurance Fund.

The District Court's judgment, however, divided the proceeds, payable in installments, among three parties.³ The court read the statute as imposing no bar to the award of matured but unpaid installments to the estates of deceased beneficiaries. It therefore awarded to the father's estate the installments which had matured during his lifetime but remained unpaid. And, finding that Bessie, the stepmother, had stood in loco parentis to the insured for at least one year prior to his entry into active service, it concluded that both she and Clara Belle, the natural mother, were parents who 'last bore that relationship' and thus qualified to take the remaining proceeds by devolution under § 602(h)(3)(C) of the Act. The installments which had matured during the stepmother's lifetime were shared equally between her estate and Clara Belle; installments thereafter maturing were awarded to the latter alone.

The Court of Appeals agreed.⁴ Conceding that the literal wording of the statute went 'a long way' toward sustaining the Government's opposing contentions, the court, fearful of unfortunate consequences that might flow from strict adherence to the text of the Act, nevertheless ruled that estates of deceased beneficiaries might take. And, noting its disagreement with the Second Circuit's ruling in Baumet v. United States,⁵ it further held that one in loco parentis who qualified as a beneficiary under § 602(h)(3)(C) of the Act did not necessarily exclude from participation in policy proceeds a natural parent of the same sex who also 'last bore' the parental relationship to the insured.

We granted certiorari to settle problems important in the administration of the National Service Life Insurance Act and to resolve conflicting statutory interpretations by the Courts of Appeals. 342 U.S. 917, 72 S.Ct. 365, 96 L.Ed. 686.

Congress through war risk insurance legislation has long sought to protect from financial hardship the surviving families of those who had served under the nation's flag. Comprehensive insurance programs enacted in 1917, 1940, and 1951 reflect this consistent legislative concern in times of crisis. Since public funds were to meet a large part of the programs' cost,⁶ the statutes closely circumscribed the class of permissible takers to preclude those not the object of congressional concern from draining the treasury when hazards of war service multiplied policy maturities. The War Risk Insurance Act of 1917 enumerated only the serviceman's spouse and immediate blood relatives as permissible beneficiaries of policy proceeds;⁷ a beneficiary's interest was extinguished by death.⁸ The National Service Life Insurance Act of 1940, again constricting the class of permissible takers,⁹ restates the legislative purpose of the prior Act. In the Servicemen's Indemnity Act of 1951 the previous restrictions once more appear, reiterated in a flat proviso: 'no payment shall be made to the estate of any deceased person.'¹⁰ Accenting these wartime limitations is the liberalizing legislation by which Congress after cessation of hostilities in World Wars I and II placed its insurance programs on more nearly a commercial basis. Amend- ments to the War Risk Insurance Act in 1919 expanded the permitted beneficiary class to include more distant relatives of the insured, and, significantly, provided that installments payable but unpaid upon a beneficiary's death might go to his estate.¹¹ This broadening legislation was substantially reenacted in the World War Veterans' Act of 1924.¹² And after World War II, Congress in 1946 once more liberalized the benefits of the National Service Life Insurance Act. As to policies maturing after August 1946 it removed the restrictions on the insured's choice of beneficiary, and in certain instances permitted the payment of installment proceeds to deceased beneficiaries' estates.¹³ From this course of legislation an unmistakable pattern of congressional policy emerges: Statutes enacted in time of war crisis narrow the range of beneficiaries; post-war legislation broadens it.¹⁴

Section 602 of the N.S.L.I. Act of 1940, governing the distribution of the policy proceeds here in controversy, must take meaning from its historical setting. Cf. United States v. Zazove, 1948, 334 U.S. 602, 68 S.Ct. 1284, 92 L.Ed. 1601. Subsection (i) conditions the right of a beneficiary to the payment of any installments 'upon his or her being alive to receive such payments'; it adds that 'No person shall have a vested right to any installment * * * and any installments not paid to a beneficiary during such beneficiary's lifetime shall be paid to the beneficiary or beneficiaries * * * next entitled to priority * * *.' And subsection (j), so as to disclaim any possible analogy to prior peacetime legislation which at one time had been construed to confer such rights,¹⁵ emphasizes that 'No installments of such insurance shall be paid to the heirs or legal representatives as such * * * of any beneficiary.' On the contrary, the subsection directs 'in the event that no person within the permitted class survives to receive the insurance or any part thereof no payment of the unpaid installments shall be made'.

In the face of this clear statutory language we are nevertheless urged to distinguish installments neither accrued nor paid from accrued installments that an intended beneficiary for some reason has not received. Whereas the former concededly may not pass to the estate of a deceased beneficiary, it is argued that the latter may. For to hold otherwise, the argument runs, might result in 'amazing consequences'; the government, for example, by simply withholding payments until one beneficiary died might unjustly enrich another in a lower priority, or, if none survived, favor the public purse; moreover, a low-priority beneficiary by litigating a specious claim might profitably suspend payment until the higher-priority takers died.

We reject the conclusion and its premises. The asserted distinction assumes that when Congress...