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1911. The appropriation for the salary for the current fiscal year is made in the act of June 30, 1922, 42 Stat., 716, under the subheading “Office of the Secretary of War,” the appropriation being “disbursing clerk, $2,750.” In the same act appropriation is made for deputy disbursing clerk, $2,000.”

There can be no doubt, therefore, that provision of law now exists for a disbursing clerk for the War Department whose duty it is to disburse funds appropriated for the maintenance of the War Department at Washington.

The provision in the act of June 4, 1920, referred to in your letter reads:

There is hereby created a Finance Department. The Finance Department shall consist of one Chief of Finance with the rank of brigadier general, one hundred and forty-one officers in grades from colonel to second lieutenant, inclusive, and nine hundred enlisted men.

The Chief of Finance, under the authority of the Secretary, shall be charged with the disbursement of all funds of the War Department, including the pay of the Army and the mileage for officers and the accounting therefor; and with such other fiscal and accounting duties as may be required by law, or assigned to him by the Secretary of War.

The title of the act in which the provisions just quoted are found is "An act to amend an act entitled 'An act for making further and more effectual provision for the national defense, and for other purposes,' approved June 3, 1916, and to establish military justice.” An examination of the various provisions of said act of June 4, 1920, and the act of June 3, 1916, discloses that in each of said acts the Congress was legislating with reference to the Military Establishment as distinguished from the civil establishment or executive department known as the War Department at Washington. Reading said provision in the light of the other provisions of the act and considering the general subject with reference to which the law was enacted, I am inclined to the view that“ all funds of the War Department” as here used was intended to embrace all funds provided for use by the War Department in its capacity as an organization for the national defense and that it was not intended to include the funds provided for the purely civil activities of the War Department in its capacity as one of the executive departments at Washington. It must be assumed in the absence of specific legislation bringing the civil branch of finance accounting under the military branch that the disbursements with which the Chief of Finance is charged under the law were such as were intended to be made by members of the personnel of the Finance Department as created by the act or by persons regularly detailed or attached to said department. As hereinbefore shown, specific provision of law has been made for a disbursing clerk in the office of the Secretary of War to disburse the funds now under consideration; and in the absence of specific legislation transferring said disbursing clerk from the office of the Secretary of War to the Finance Department I am constrained to hold that the Chief of Finance is not charged with the disbursement of funds appropriated for the maintenance of the civil establishment or executive department known as the War Department at Washington.

WAR RISK INSURANCE-TOTAL DISABILITY RATINGS.

The question whether and when the holder of a war risk insurance policy be

came permanently totally disabled is a matter for determination by the Director of the Veterans' Bureau, and if such a condition is determined to have existed prior to the date the policy would have otherwise lapsed for nonpayment of premiums the policy would be still in full force and effect and there would be due the beneficiaries the unpaid installments and any premiums collected after the effective date of permanent total disability rating. A retroactive finding of permanent total disability which was afterward set aside by the director is insufficient to support the insurance through the lapse period or to sustain payment of further installments

thereof. When a rating of permanent total disability was determined by the Director

of the Veterans’ Bureau to have been erroneous and changed to a temporary total disability, no prerriums on the policy having been paid since the rating of permanent total disability, upon the death of the insured there should be deducted from the face of the policy all erroneous payments made under the rating of total permanent disability and all premiums on the full amount of the policy with interest which would have been due from the

date of the total permanent disability rating to the date of his death. Comptroller General McCarl to the Director United States Veterans' Bureau, August 9, 1922:

I have your letter of June 22, 1922, requesting decision as to the authority of the Veterans' Bureau to make payments of insurance in certain cases where awards made under paragraph B IV (c) of Regulation No. 57, were terminated after decision of this office, July 25, 1921, 1 Comp. Gen. 31, was rendered, that a regulation was unauthorized which accepted as there being a condition of permanent total disability from lapse of time alone without regard to the actual fact.

You submit statements of facts in two cases, as follows: The first question presented arises in the case of a man granted $5,000 yearly renewable term insurance who was discharged from the military service July 2, 1919. Thereafter his premiums were regularly paid to and including the month of February, 1920, but the insurance lapsed for the nonpayment of the March, 1920, premium On July 10, 1921, while Regulation No. 57 was in effect the former service man was given a rating of permanent total disability, under paragraph B IV (c), effective from July 2, 1919, and twenty-six Installments accruing at the rate of $28.75 from July 2, 1919, were paid to him. After your decision rendered July 25, 1921, was received by this bureau the permanent total rating theretofore made under paragraph B IV (c) was terminated with the August installment of insurance and in accordance with the provisions of paragraph VIII of Regulation No. 57 the former soldier on September 1, 1921, paid the first premium on account of the remaining insurance to continue in force. Thereafter premiums on such remaining insurance were regularly paid by him to and including the month of March, 1922. The insured died March 17, 1922, and the question now arises as to whether or not this bureau is author ized to pay to the designated beneficiary the remaining 214 monthly installments of insurance at the rate of $28.75 per month. no premiums for the period be tween March 1, 1920, and September 1, 1921, having been paid by the insured and the premiums paid prior to March 1, 1920, having been returned to him on account of the permanent total rating made under paragraph B IV (c) of Regulation No. 57.

The second case typical of the problem presented is that of a man granted insurance in the sum of $10,000, who, while in the service. was hospitalized by the Army continuously from November 20, 1920. This man made claim to the Bureau of War Risk Insurance for insurance only and was given a rating of permanent total under paragraph B IV (c) on June 25, 1921, the rating effective from November 20, 1920, and installments of insurance accruing at the rate of $57.50 from November 20, 1920, were paid to him. This man was discharged from the service July 15, 1921, and after your decision dated July 25, 1921, was rendered, the permanent total rating was terminated effective September 1, 1921, a temporary total rating succeeding it. The premium due September 1, 1921, was not paid as provided by paragraph VIII of Regulation No. 57 and he made no application for waiver of premium under the provisions of the act approved August 9, 1921. The disabled man died October 5, 1921, from the disease of service origin for which hospital treatment had been afforded him since November 20, 1920, without having made claim for the compensation to which he would have been entitled under the war risk insurance act from the date of his discharge from the service.

The general purport of the decision of July 25, 1921, was that the existence of a condition of permanent total disability is a matter of fact to be determined by the director in individual cases upon competent medical opinion and advice. The decision itself did not require the termination of any award of insurance in force at the time it was rendered, nor did it relieve the director of the responsibility of determining in each individual case whether or not the condition of permanent total disability did in fact exist.

In the first case submitted if the director finds as a matter of fact that the insured became permanently totally disabled on July 2, 1919, or at any later date prior to March, 1920, such finding will be effective to mature the insurance as of the effective date of the finding so that there could be no lapse because of failure to pay premiums thereafter. Under such a finding there would be due on the insurance the unpaid 214 installments and a refund of premiums collected for the period from September, 1921, to March, 1922. See decision of June 27, 1922, to the Director of the Veterans' Bureau. If there is no finding by the director of permanent total disability other than the finding of July 10, 1921, that finding having been set aside by termination of the award is insufficient to sustain further payment of insurance or refund of premiums, nor would it be effective now to mature the insurance as of its effective date.

It is the duty of the director to determine whether or not this man did in fact become permanently totally disabled at any time prior to March, 1920. If he did so become disabled there was no lapse of insurance for failure to pay premiums falling due after that time, and insurance payments and refunds should be adjusted accordingly. If he did not in fact so become disabled the facts stated would indicate that the insurance lapsed in March, 1920, for failure to pay

premiums when due and was not thereafter in force, unless the action of the director in collecting premiums from September, 1921, may be taken as equivalent to reinstatement of the unpaid remainder of the insurance. Whether that action may be so taken is not a question of which decision has been specifically requested, and may depend upon matters of fact not disclosed by the submission. Responsibility for the determination in this case of the condition of permanent total disability and the date of its commencement is upon the Director of the Veterans' Bureau, not upon the Comptroller General.

In the second case as in the first it is for the director to determine whether the insured did in fact become permanently totally disabled and if so on what date the permanent total disability commenced. Much of what is said herein with reference to the first case applies equally to the second. The material points of difference between the two cases appear to be, first, that premiums due up to the date of the rating of permanent total disability on June 25, 1921, were regularly paid or deducted from the Army pay of the insured, so that there would be no lapse of insurance prior to said rating; second, that the insured did not resume payment of premiums after the termination of that rating or request waiver of premiums; and third, that he had compensation due and unpaid to him at the time of his death.

Section 408 of the war risk insurance act, as amended by section 27 of the act of August 9, 1921, 42 Stat., 156, provides:

Provided further, That where any soldier has heretofore allowed his insur. ance to lapse, while suffering from wounds or disease suffered or contracted in line of service, and was at the time he allowed his said policy to lapse entitled to compensation on account thereof in a sum equal to or in excess of the amount due from him in premiums on his said insurance, and has since died from said wounds or disease without collecting or making claim 'for said compensation, or being allowed to reinstate his said policy on account of his physical condition, then and in that event said policy shall not be considered as lapsed, and the Veterans' Bureau is hereby authorized and directed to pay to the beneficiaries of said soldier under said policy the amount of said insurance less the premiums and interest thereon at 5 per centum per annum compounded annually in installments as provided by law.

In this connection you submit the question whether in the second case presented the bureau shall deduct from the insurance payable the amount of the premiums on $10,000 accruing from the date of the last payment, while the disabled man was in the military service, or whether deduction shall be made only for premiums from September 1, 1921, on the remaining insurance.

While the former rating of permanent total disability made in this case, even if erroneous, would be sufficient authority for the insured to discontinue payment of premiums while it was in force without suffering a lapse of his insurance, the later correction of the rating carried with it the obligation of the insured to pay premiums for the intervening period if the insurance was to continue in force. Assuming the rating to have been erroneous, the insured has received insurance to which he was not entitled under the law, and as the Government is liable on the statutory contract of insurance for only the 240 installments provided by the contract the amount thus paid is a charge against the face of the insurance. If the rating had not been made premiums would have been charged on the full $10,000 of insurance. The insured having died without paying said premiums and with adequate war risk insurance compensation due him, the premiums on the full amount of the policy, with interest, would have been deducted from the insurance but for the assumed erroneous rating. The rating having been corrected the payments should be charged back to the insurance and deduction of premiums should be at the full rate for the face of the insurance, that rate of premium being essential to continuation of the insurance up to the time of insured's death, when it became subject to a charge of the former assumed erroneous payments and to deduction of premiums with interest.

I may repeat here that it is the duty of the Director of the Veterans' Bureau to determine as a matter of fact whether this insured had become permanently totally disabled prior to his death, and if so at what time that condition commenced. If the director finds that the condition in fact existed and that it commenced on a date prior to the time for which the last premium was paid, there was no lapse of the insurance and no erroneous payment, and further payments should be made accordingly.

WAR RISK INSURANCE BENEFICIARIES.

Where the beneficiaries designated by the holder of a war risk insurance

policy were not lawful beneficiaries under the original war-risk act but became such by virtue of the amendment of that act by section 4a of the act of December 24, 1919, 41 Stat., 371, their rights were validated as of the date originally designated, and render invalid any payments made to the next of kin; the first proviso to section 13 of the act of December 24, 1919, validating certain payments made up to and including the second calendar month after the passage of said act, being confined to payments to persons designated in that section (13) of the act, and the second pro viso in section 13, applicable to all awards of insurance, including those persons named in section 4a, merely fixing a date for revision, the pro

visions of section 4a being expressly effective as of October 6, 1917. When the Director of the Veterans' Bureau, through his own mistake of law

or of fact, has paid insurance to one clearly not entitled thereto, and it is equally clear that another claimant is entitled thereto, the director may and should make payment to the rightful claimant upon a proper claim

therefor, irrespective of recovery of the erroneous payment. Adverse rulings by the Director of the Veterans Bureau in the matter of

insurance awards are not subject to review by the General Accounting

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