the term of his enlistment and any period of his hospitalization due to such wounds or disability will be deducted from the required length of residence, without reference to the time of actual service (sec. 502). No patent will issue unless a settler has resided upon, improved, and cultivated his homestead for a period of at least 1 year (sec. 502), but the death of the entryman while in the service has the effect of entitling his widow if unmarried, or in case of her death or remarriage his minor children, to a patent (sec. 503 (1)). If a person in military service is honorably discharged and because of physical incapacity, due to such service, is unable to return to the land he may make final proof without further residence, improvement, or cultivation and receive a patent to the land entered (sec. 503 (2)). Any homestead entryman whose application was allowed or filed prior to October 17, 1940, is entitled to a leave of absence from his entry to perform farm labor during the pendency of any war in which the United States may be engaged and the time actually spent in farm labor shall be counted as constructive residence if within 15 days after leaving his entry to engage in such labor the entryman files a notice of absence with the proper district land office and on his return files another statement as to his work. The entryman must make the improvements and perform the cultivating required by law (sec. 510). (c) Desert land entry Desert entrymen in service are not required to expend money for improvements or to effect reclamation of the claim during the period of military service or 6 months thereafter or any period of hospitalization due to wounds or disability incurred in the line of duty. If the entryman or claimant is honorably discharged and because of physical incapacities due to such service is unable to accomplish reclamation of, and payment for, the land he may make proof without further reclamation or payments and receive patent for the land entered or claimed. The entryman or claimant must file a notice in the district land office that he has entered military service and that he desires to hold the desert claim under this act (sec. 504). (d) Mining claims The performance of labor or improvements on mining claims is waived where the person is in military service, provided that proper notice of entry into the service is filed before the close of the assessment year in the office where the location notice or certificate is recorded (sec. 505). (e) Mineral leases and permits A permittee or lessee under the Federal mineral leasing laws (oil, gas, coal, etc.) may elect to suspend operations under his permit or lease for the period of his military service and 6 months thereafter. The district land office must be notified of the person's entrance into military service and of his desire to avail himself of the benefits of the act. During the period of suspension the term of the lease or permit will not run and no rentals or royalties will be charged; but the act does not supersede the terms of a contract for the operation of a permit or lease (sec. 506). (f) Irrigation rights The Secretary of the Interior is authorized to suspend as to persons in military service during the period the act remains in force and 6 months thereafter, or during any period of hospitalization, the requirement of residence upon lands in private ownership or within the neighborhood for securing water for the irrigation of such lands. It is understood that requirement has been suspended to allow during the period prescribed in the act the making of water-right applications by persons in military service irrespective of their residence. An entry or water-right application which was made under the reclamation laws before the entryman or applicant entered military service is not cancellable for his failure to comply with the reclamation and cultivation requirements of section 8 of the act of August 14, 1914 (38 Stat. L. 688), or his failure to pay project charges, when such failures are due to military service (sec. 508). D. PERSONAL PROPERTY 1. Installment Contracts and Conditional Sales The provisions with regard to purchases on the installment plan and obligations secured by a mortgage, trust deed, or other security in the nature of a mortgage (see page 15 of this manual for a discussion of mortgages under sec. 302) apply with equal effect to both real and personal property. In order to be eligible, the obligation must be incurred prior to October 17, 1940, and a deposit or installment on the purchase price have been made previous to the entry into military service. If the person in military service defaults on a payment after entering military service and is unable to reach an agreement with his creditor," the creditor may not terminate or rescind the contract or repossess the property except by court action. In such case the court has wide discretionary powers to make such disposition as may be equitable to conserve the interest of both the purchaser and the seller. Congress has provided only for contracts in existence prior to October 17, 1940. Persons who may thereafter enter into installment arrangements will do so at their own risk. The protection of the act will not apply to them even if after the transaction they are inducted into some form of military service (sec. 301). The relief afforded the debtor is predicated upon a showing that his ability to meet his obligation is materially impaired by reason of his being in military service. With certain exceptions the court is authorized to postpone repossession or foreclosure until the return from military service. If the creditor is permitted to resume possession of the property, the court may order repayment of all or any part of the deposits or installments (sec. 301 (3); 302 (2, 3); 303). Any contract may be cancelled or property repossessed if the parties mutually agree in writing after the period of military service has commenced (sec. 301 (1)). An exception is made with regard to repossession of motor vehicles and tractors or their accessories. In these cases the court may not postpone repossession of the property unless the debtor has paid one-half or more of the purchase price (sec. 303). Any person who knowingly resumes possession of property, otherwise than as permitted, is guilty of a misdemeanor and subject to imprisonment not to exceed 1 year or fine not to exceed $1,000 or both (sec. 301 (2)). 2. Insurance 10 Under the provisions of article IV of the act (secs. 400-414) and regulations to be issued by the Veterans' Administration, persons in military service may protect their existing life insurance policies against lapse for nonpayment of premiums provided that proper application is made in accordance with the regulations. The term "policy" includes a contract of life insurance on the level premium or legal reserve plan or any benefit in the nature of life insurance arising out of membership in any fraternal or beneficial association (sec. 400). The term "premium" includes membership dues or assessments in any fraternal or beneficial association and the date of the issuance of the policy shall refer to the date of admittance into such association (sec. 400). The limitations of this proposal are as follows: (a) The policy must be issued and a premium paid before October 17, 1940, or not less than 30 days before entering the military service (sec. 402). (b) Policies on which the premiums have not been paid for more than 1 year at the time of application and policies on which there is an outstanding loan equal to or greater than 50 percent of the cash surrender value are not eligible (sec. 402). (c) The total amount of insurance on which protection is afforded is $5,000 to any one person in service. Where one or more applications are made in respect of insurance exceeding a total face value of $5,000 and the insured does not indicate an order of preference, the Veterans' Administration may reject the policies which have an inferior cash-surrender value so as to reduce the total benefits conferred within the face value of $5,000; where necessary, the Veterans' Administration may direct the insurer to divide any policy into two separate policies (sec. 404). (d) The policy must be issued by an insurance company or association which is required to maintain a reserve or which has made provision to collect a premium to cover the special war risk of policy holders in military service (sec. 414). (e) These provisions do not apply to any policy which is void or which may at the option of the insured 11 be voidable if the insured is in military service, either in this country or abroad, or to any policy which, as a result of the insured's being in military service either in this country or abroad, provides for the payment of any sum less than the face thereof or for the payment of any additional amount as premium (sec. 413). 10 None of the provisions referred to under this caption relate in any way to the National Service Life Insurance Act, as to which see part IV of this manual. See Regulations issued December 6, effective October 17, 1940, and any later ones. 11 N. B.-JR 305, passed by the Senate on November 25, will, if the House concurs, change this word to "insurer." (f) The protection is extended only to insurance on the lives of persons in service; it does not include dependents (sec. 401 (1)). The protection afforded consists of a guaranty of premium payments during the time of military service and 1 year thereafter, and thereby prevents a lapse or forfeiture for nonpayment. The act allows the insured 1 year after leaving active service to pay up the back premiums thus guaranteed and to resume normal premium payments (sec. 410). The guaranty is secured by the issuance to the insurer of United States interest-bearing certificates to secure the amount of outstand ing premiums under the covered policies (sec. 407). 3. Taxes The collection of income tax becoming payable during military service or prior thereto is deferred, if ability to pay the tax is materially impaired by reason of such service, for not more than the term of service and 6 months thereafter. No interest or penalty will accrue during the period of deferment. The running of any statute of limitations against the collection of the tax by distraint or otherwise, from any individual the collection of whose taxes is deferred, is suspended for the period of military service and an additional 9 months. These provisions do not apply to the "income tax" on employees (old-age security contributions) imposed by section 1400 of the Federal Insurance Contributions Act 12 (sec. 513). There is no exemption from the duty to file tax returns within the time prescribed by law. It is suggested that any claim for deferment of taxes might be made in the first instance by letter to the Collector of Internal Revenue for the district in which the claimant resides. The letter should show the year, the amount of the tax, the beginning and ending dates of military service, and facts relating to ability to pay the tax such as average monthly income before and after entering the military service with a current statement of assets and liabilities. The Collector may in his discretion require supplemental proof of ability to pay. As to any other than Federal income tax, inquiry should be made of the appropriate authority. 12 53 Stat. L. part I, secs. 1400-1431, approved February 10, 1939. PART II OTHER CIVIL RELATIONSHIPS AFFECTED BY MILITARY SERVICE A. ESTATES, WILLS, AND PROPERTY 1. In General Persons entering military service may require advice regarding the management of their property. Consideration should be given to the joint ownership of property, to general and special powers of attorney and to trusts; as well as to the fact that in some states there are laws still in effect from previous wars giving various benefits to those in military service. No attempt has been made to include references to such laws in this manual. 2. Wills and Intestacy In addition to the more familiar rules governing these subjects it may be desirable to give some attention to holographic and nuncupative wills. When valid at all, such wills usually permit the disposition of personal property only and a nuncupative will of a person in military service must ordinarily be made before the moment of death or disaster, in the presence of three witnesses who thereafter within a limited time reduce the will to writing and witness it. 3. Personal Effects of Persons Deceased in Military Service Disposition of the personal effects of those who die in military service is governed by various provisions of the Articles of War. The articles may be found in title 10, U. S. C. A. (Army), sec. 1471 et seq.; title 32, U. S. C. A. (National Guard); title 34, U. S. C. A. (Navy), sec. 1200 et seq., A Manual for Courts-Martial, U. S. Army (1928), Naval Courts and Boards (1937). 4. Inheritance Tax A 1917 amendment (40 Stat. L. 1097) of the Federal Inheritance Tax Laws provided, among other things, that no inheritance tax need be paid by estates of persons dying while in service or within 1 year after the termination of the war from injuries received or disease contracted while in such service. It would be wise to observe whether similar benefits are granted in the future by Congress or any State legislature. 5. Wages Due to Deceased If when a person in military service dies there is pay due him from the United States Government, a claim should be filed with the |