United States v. Towery

• Decision Date: 27 February 1939
• Docket Number: No. 360,360
• Citation: 83 L.Ed. 678,306 U.S. 324,59 S.Ct. 522
• Parties: UNITED STATES v. TOWERY
• Court: U.S. Supreme Court

306 U.S. 324

59 S.Ct. 522

83 L.Ed. 678

UNITED STATES

v TOWERY.

No. 360.

Argued Jan. 31, 1939.

Decided Feb. 27, 1939.

The Attorney General and Mr. Wilbur C. Pickett, of Washington, D.C., for the United States.

[Argument of Counsel from page 325 intentionally omitted] Mr. Edward H. S. Martin, of Chicago, Ill., for respondent.

Mr. Justice ROBERTS delivered the opinion of the Court.

This case turns upon the proper construction of the limitations provision of Section 19 of the World War Veterans Act of 1924, as amended.¹

The respondent brought an action in the District Court for Northern Illinois in his own right and as administrator of Robert C. Towery, deceased, upon claims on two war risk insurance term policies issued to the decedent while in the military service of the United States. The claim of respondent as administrator was for total permanent disability benefits alleged to have accrued to the insured in his lifetime, and the claim as beneficiary designated in the policies was based upon the death of the insured. The complaint alleged that the premiums were deducted from the insured's pay during his military service, from which he was discharged June 18, 1919; that he became totally and permanently disabled, while the policies were in force, on June 18, 1919; that he died April 22, 1927; that, on May 2, 1927, respondent was appointed administrator; that on February 11, 1932, respondent made claim for disability and death benefits under the policies; that the claim was denied by the Veterans Administration August 8, 1935. Suit was instituted June 29, 1936. The government moved to dismiss on the ground that the action was barred by limitation. The District Court granted the motion and gave judgment for the government. On appeal the Circuit Court of Appeals reversed.² We granted certiorari, 305 U.S. 588, 59 S.Ct. 106, 83 L.Ed. —-, because of alleged conflict of decision.³

Section 19 provides that, in the event of a disagreement between the veteran and the Bureau as to a claim under a policy, the claimant may bring an action in the District Court to obtain a decision of the controversy. The statute then proceeds:

'No suit on yearly renewable term insurance shall be allowed under this section unless the same shall have been brought within six years after the right accrued for which the claim is made or within one year after the date of approval of this amendatory Act (July 3, 1930), whichever is the later date, * * * Provided, That for the purposes of this section it shall be deemed that the right accrued on the happening of the contingency on which the claim is founded: Provided further, That this limitation is suspended for the period elapsing between the filing in the bureau of the claim sued upon and the denial of said claim by the director.'

The Circuit Court of Appeals held that the 'contingency', on the happening of which 'the right accrued for which the claim is made', is not defined by the statute and must be ascertained from the policy provisions. In the light of these provisions the court held that, in the case of a claim for benefits payable to the insured, the contingency is the accrual of an installment and, in the case of a claim by a beneficiary, the contingency is the death of the insured.

The policy, while for a stated amount, calls for payment in monthly installments, two hundred and forty of which (interest being calculated at three and one-half per cent.) would equal the principal sum. Contrary to the view of the court below, disability benefits to the insured do not cease at the expiration of two hundred and forty months but are continued for life if the disability so long lasts.⁴ Should the insured die, however, prior to the payment of two hundred and forty installments, further installments up to the limit of two hundred and forty are payable to his beneficiary. Should the beneficiary die before the receipt of all the remaining installments up to two hundred and forty, the commuted value of the unpaid installments is payable to the estate of the insured in one sum.⁵ The court below reached its conclusion as to the meaning of the Act, first, by examination of the phrase 'within six years after the right accrued for which the claim is made.' In the view that, in case of the death of the insured, the beneficiary has a 'right' for which a claim may be made and that, prior to the death of the insured, the latter also has a 'right', namely, to receive each monthly benefit installment, the court concluded that there were two rights. If this be the correct view there is still a third 'right',—that of the administrator of the insured to claim a lump sum commuted value for installments unpaid to the beneficiary at the date of the latter's death. The court then addressed itself to the meaning of the word 'contingency' in the first proviso of the section: 'it shall be deemed that the right accrued on the happening of the contingency on which the claim is founded.' The court held that, in the case of a disabled veteran, at least two contingencies must occur before the right to any monthly benefit accrued,—namely, the occurrence of permanent disability while the policy was in force and the existence of the disability at the date for which a particular monthly payment is claimed. In the case of a beneficiary, the court was of opinion that another contingency must be added, namely, the death of the insured. It made the choice from these possible alternatives by holding that the right accrued in the case of a living insured on the date when each monthly benefit payment became due and, in the case of a beneficiary, when the insured died. This construction is said to comport with the liberal policy of Congress towards veterans and to be supported by the fact that an alternative period of one year from the date of the passage of the statute was accorded by Congress. The court viewed the six year period as a liberalizing alternative to the one year period, and, therefore, held the claim of the respondent, as beneficiary, was timely because suit had been instituted within the six year period as enlarged by the duration of the Veterans Administration's consideration. The claim, as administrator, for installments accruing in the life of the insured, was held maintainable for such installments as accrued due within six years (plus the additional time allowed for administrative consideration) prior to the institution of suit. We are unable to adopt this construction of the statute.

Section 19 plainly intends to put a time limitation upon the institution of suit, whereas, the decision of the court below would provide no such limitation upon suits by veterans for total permanent disability benefits, but simply a limitation on the number of installments recoverable; and, in application to disability cases, would preclude only a recovery of certain installments whereas new suits...