United States v. Mroch

• Decision Date: 04 March 1937
• Docket Number: No. 7167.,7167.
• Citation: 88 F.2d 888
• Parties: UNITED STATES v. MROCH.
• Court: U.S. Court of Appeals — Sixth Circuit

88 F.2d 888 (1937)

UNITED STATES v. MROCH.

No. 7167.

Circuit Court of Appeals, Sixth Circuit.

March 4, 1937.

T. E. Walsh, of Washington, D. C. (Emerich B. Freed, of Cleveland, Ohio, Gerald P. Openlander, of Toledo, Ohio, and Will G. Beardslee, Wilbur C. Pickett, and Randolph C. Shaw, all of Washington, D. C., on the brief), for the United States.

Alfred J. Croll, of Toledo, Ohio (Fred C. Balk, of Toledo, Ohio, on the brief), for appellee.

Before MOORMAN, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

The appellant was sued for a balance admitted to be due on a war risk insurance policy issued to plaintiff's husband, William Alfred Sheeter, who died while in the military service of the government. The controversy involves the right of the appellant to set off against such balance compensation received by the plaintiff in another representative capacity and later found by the Director of the Veterans' Administration to have been paid under a mistake of fact. The cause was tried to the court without a jury, and from a judgment for the plaintiff upon appropriate findings of fact, for the balance due on the policy without set-off, the United States appeals.

The policy issued to Sheeter was in the sum of $10,000 and named his mother as beneficiary. She received the monthly installments provided for until her death, at which time there was still unpaid on the insurance contract and due the veteran's estate the sum of $5,928. In the meantime there had been paid to the plaintiff as guardian of her dependent children, the sum of $2,487.42 under an award made by the Director upon a finding that such children were members of the deceased veteran's household. Later the Director found that the children had been inmates of the Veterans' Home at Xenia, Ohio, amended the award, and demanded a refund. This being refused, the appellant deducted the overpayments from the amount due the plaintiff as administratrix of her husband's estate and paid her the balance. It is for the amount deducted that she sues, and it is in this amount the appellant claimed a set-off.

The War Risk Insurance Act of October, 1917, by sections 300 and 301 (40 Stat. 398, 405) as amended June 25, 1918, 40 Stat. 611, §§ 10, 11 provided for compensation to be paid dependents of soldiers dying in the service. A widow was to receive a monthly compensation of $25. If there was a child the compensation was increased to $35, and if there were two children it was to be $42.50. The compensation to a widow was to continue to her death or remarriage, and that to a child until the age of 18 years or marriage. Section 22 of the Act of 1917 (40 Stat. 400) defined the term "child" to include legitimate children, those legally adopted more than six months before enlistment or entrance into service, and stepchildren if members of the soldier's household. The Act of 1924, section 3 (38 U.S.C.A. § 424) is to the same effect. Under these provisions the plaintiff, having two children, Cleo and Roy, by a previous marriage, was awarded as widow of a soldier having two stepchildren in his household, $42.50 per month, and was compensated at that rate from September 19, 1918, to May 26, 1921. On the latter date Cleo married, becoming Cleo Ruth Coleman, and compensation on her account ceased. From then to May 31, 1923, the widow received $35 per month. On June 1, 1923, she remarried, terminating her compensation. There remained one child entitled to compensation, Roy. Under section 201 of the Act of June 7, 1924, as amended by Act March 4, 1925, 38 U.S. C.A. § 472, by its terms effective as of April 6, 1917, his monthly compensation was $20. On September 23, 1923, the mother was appointed his legal guardian by the probate court of Cuyahoga county, Ohio, and was required by state law (sections 11037-1 to 11037-20, G.C.O.) to file an annual account as guardian of a Bureau beneficiary. From June 1, 1923, to January 31, 1930, $20 per month was paid the mother as legal guardian of her son. In addition to these payments there were small amounts paid to the daughter, Mrs. Coleman, and to the mother as guardian of her son under awards of adjusted compensation.

On February 14, 1930, the Veterans' Bureau determined that the veteran's stepchildren, Cleo and Roy, had never been members of his household, were not entitled to compensation under the statute, and that all benefits theretofore paid to or on their account had been paid through error. The adjusted awards were thereupon canceled as from the beginning, and an amended award made providing for a widow's allowance of but $25 a month from the date of the veteran's death to the date of her remarriage.

The legal basis for the Bureau's claim of refund and set-off is to be found in section 22 of the Act of 1924, 38 U.S.C.A....