United States v. Hines

• Decision Date: 06 February 1939
• Docket Number: No. 7108.,7108.
• Parties: UNITED STATES ex rel. LYONS v. HINES, Administrator of Veterans' Affairs.
• Court: U.S. Court of Appeals — District of Columbia Circuit

70 App. DC 36, 103 F.2d 737 (1939)

UNITED STATES ex rel. LYONS v. HINES, Administrator of Veterans' Affairs.

No. 7108.

United States Court of Appeals for the District of Columbia.

Decided February 6, 1939.

Petition for Rehearing Denied April 5, 1939.

Thos. E. Lyons, of Washington, D. C., pro se.

David A. Pine, U. S. Dist. Atty., and John J. Wilson, Asst. U. S. Atty., and James T. Brady and John M. George, of the Veterans' Administration, all of Washington, D. C., for appellee.

Before GRONER, Chief Justice, and EDGERTON and VINSON, Associate Justices.

VINSON, Associate Justice.

The appellant is a World War veteran, with an honorable discharge, who, in service, was granted war risk (yearly renewable term) insurance in the sum of $10,000, payable in the event of the death or permanent and total disability of the soldier. After separation from service, the policy lapsed on several occasions for non-payment of premium, but in each instance it was reinstated. On July 1, 1927, the appellant reinstated and converted his yearly renewable term insurance into United States Government life (converted) — 5 year convertible term policy — insurance. After a physical examination, reinstatement of this policy was granted under Regulation 15, now paragraphs 3078, 3079, and 3080 of the Regulations and Procedure of the Veterans' Administration. This policy lapsed about July 1, 1928, and was reinstated on September 1, 1928. Effective July 1, 1931 the veteran converted this five year convertible term policy into United States Government life (converted) insurance in the form of a twenty-payment life policy, and applied for and was granted the total disability provision authorized in sec. 311, of the World War Veterans' Act, as amended, 38 U.S.C.A. § 512b, which was included in the twenty-payment life policy, No. K 703,144, after a physical examination by the chief of the Insurance Medical Section of the Veterans' Administration. Each of the policies which the veteran successively held, war risk annual yearly renewable term, 5 year convertible term, and the twenty-payment life, contained provision for payment of disability benefits when permanent and total disability was shown to exist, and by statute there was included in the twenty-payment life policy the additional total disability benefits. Premiums were paid on the last policy (hereinafter termed the converted policy) through November, 1934, when it lapsed for non-payment of premiums.

The veteran applied for reinstatement of the converted policy of insurance on February 25, 1935, a date within three months of the due date of the premium in default. The life features of this policy, together with permanent and total disability provisions, were reinstated under sec. 304 of the Act, 38 U.S.C.A. § 515, after a medical examination to which the veteran objected, but the Administrator of Veterans' Affairs refused to reinstate the total disability provision, stating that the veteran was not then in good health, and that the total disability provision had been originally issued to the veteran in error. That he was not held to be in good health was due solely to the fact that the veteran had lost the sight of one eye. He suffered the loss in active military service.

Appellant filed a petition for a writ of mandamus in the District Court of the United States for the District of Columbia to compel the Administrator to reinstate converted policy, No. K 703,144, with the total disability provision included therein, under sec. 304 of the Act. A rule to show cause was issued. Pleadings were filed, petition, answer, replication, and demurrer thereto, and arguments heard by the court, who discharged the rule and dismissed the petition, whereupon this appeal was taken.

Congress has provided two features in all forms of United States Government life insurance, a lump sum payment to beneficiaries at the death of the soldier, and monthly payments to the soldier himself when permanently and totally disabled.¹ The original act (40 Stat. 398, 409) provided for conversion, without medical examination, into such form of insurance as might be prescribed by regulations and as the insured might request, not later than five years after the termination of the war. The act of June 2, 1926 provided this insurance should be converted, without medical examination, not later than July 2, 1927 and that yearly renewable term (war risk) insurance should cease on that date, except when death or total permanent disability should have occurred before that date. The Act of May 29, 1928² provided a new section to the World War Veterans' Act, 1924, sec. 310, which made the provisions of United States Government life (converted) insurance available to all persons who had theretofore been eligible to apply for yearly renewable term insurance or United States Government life (converted) insurance, if such person was in good health and furnished evidence satisfactory to the Administrator to this effect.

This 1928 Act contained a new section, sec. 311, which provided an additional feature to be included upon application in all policies of United States Government life (converted) insurance. It was granted upon the veteran satisfying the Administrator that he was in good health. It was to be inserted in the policy. It provided the payment of the total and permanent disability benefits upon the showing that the insured was totally, but not permanently, disabled. The payments depleted the face value of the policy as though they were total and permanent disability benefits.

Prior to 1928 many veterans shown to be totally disabled for long periods of time, but unable to satisfy the permanent disability tests, were thereby not entitled to receive the benefits under the total and permanent disability provision of the United States Government life (converted) insurance policy. In virtue of this situation many such disabled veterans were compelled to permit their insurance to lapse, even though, later on, they met the permanent disability test. To meet this situation, and to provide such insured veteran a means of protecting his insurance and providing benefits during such periods of total, though not permanent, disability, Congress enacted sec. 311.³

The Act of July 3, 1930⁴ amended sec. 311 of the 1928 Act. This sec. 311, as amended, provided for the payment of a stipulated disability benefit upon total disability for a period of four months or more. This benefit was to be paid independently of the provision of the permanent and total disability clause contained in the United States Government (converted) insurance policy and would not deplete the face value of that policy. If the insured became actually permanently and totally disabled he was to receive payment under the new total disability clause concurrently with the payments under the permanent and total disability clause then in the converted policy, payments under the latter only depleting the policy. This new disability feature was to be handled as a separate liability from the original provision for permanent and total disability so that the United States Government life insurance fund would not be assessed for any losses to be paid under the provision.⁵

It is necessary for us at the outset to consider the statutory direction to the Administrator contained in sec. 311, as amended, supra. The pertinent language is: "The director Administrator is hereby authorized and directed to include in United States Government life (converted) insurance policies" such total disability provision. This section provided for waiver of premiums when total disability existed, and in case an insured was found to be no longer totally disabled, "the waiver of premiums and payment of benefits shall cease and the United States Government life (converted) insurance policy, including the total disability provision authorized by this section, may be continued * * *"; and later, "the provision authorized by this section shall not be included * * * except upon * * * proof of good health satisfactory to the director Administrator * * *" and, "In all other respects such monthly premium shall be payable under the same terms and conditions as the regular monthly premium on the United States Government life (converted) insurance policy." Italics supplied.

Thereupon the Administrator issued an additional policy to the veteran which contained, among others, the following heading and provisions:

"Provision for waiver of premium and payment of monthly income attached to and made part of the United States Government life (converted) insurance policy, No. K * * *" Heading

"* * * if the premium be not paid as stipulated, then this provision shall cease and terminate, but may be reinstated upon evidence of good health satisfactory to the Administrator of Veterans' Affairs";

And, "* * * this provision is issued under authority of sec. 311 of the World War Veterans' Act of 1924, as amended July 3, 1930 and is subject to the provisions of the World War Veterans' Act, 1924, as amended, and amendments and supplements thereto, and to the regulations of the Veterans' Administration now in force or hereafter published. The terms and conditions of the policy which are not contrary to or inconsistent with the terms and conditions of this provision are hereby expressly made a part of this provision."

It is necessary for us to ascertain the relation of the new total disability provision (sometimes referred to as provision) and the converted policy itself. This relationship is most important as it goes to the right and power of the Administrator to establish a different regulation controlling the reinstatement of the provision when lapsed, which regulation, of course, is the support of the language in the additional policy requiring the veteran to show "good health satisfactory to the Administrator" to permit reinstatement of the provision.

The statute directs the Administrator to include in the converted...