JUNE 10 (legislative day, JUNE 1), 1948.-Ordered to be printed Mr. WILEY, from the Committee on the Judiciary, submitted the following REPORT [To accompany H. R. 4566) The Committee on the Judiciary, to whom was referred the bill (H. R. 4566) for the relief of William Nally, having considered same, do now report the bill favorably to the Senate without amendment. and recommend that the bill do pass. PURPOSE OF THE BILL The purpose of the proposed legislation is to authorize the AdminIstrator of Veterans' Affairs to pay William Nally, of New York City, the proceeds of national service life insurance policy No. 10,171,649 issued to Ferdinand Ley, late private, Company A, Three Hundred and Nineteenth Medical Detachment, United States Army, who was killed in action in Luxemburg on February 21, 1945. STATEMENT Attached hereto and made a part of this report are extracts from the House report which set forth in detail the facts in this case. In 1929, the claimant William Nally was lessee and operator of a number of rooming houses on West Sixty-fourth and West Sixty-fifth Streets in New York City. He was a married man and had a family. His home was at No. 105 West Sixty-fourth Street, New York City, where he resided with his wife, now dead, and his three children. In September of that year, Mr. Nally advertised in a newspaper for a handyman. Among those who answered the advertisement was Ferdinand Ley, the serviceman herein. At the time young Ley called on Mr. Nally, he was poorly dressed, sickly, and emaciated. In broken English he told Mr. Nally that he had been but a short time in the United States, that he was 24 years old, that his mother had been dead for a number of years, that his father and his sister lived in Germany, but he had never known a real home with them and had lived alone most of his life. He said further that he had no relatives or friends in the United States, had no money, no home, and no place to sleep. He said he needed work but wanted most of all a home in a family. He had never worked as a handyman and asked to be given a chance. His plight and sincerity appealed to Mr. Nally. He discussed the matter with his wife. She and Mr. Nally were sympathetic and agreed to give the young man a home with them. Mr. Nally took young Ley into the Nally home at 105 West Sixty-fourth Street, New York City, gave him a room in the Nally home, which was always referred to thereafter as "Fred's room," and gave him a place and his meals at the Nally family table with himself, his wife, and children and also gave him a salary. Within a short time, with food, rest, and attention, the young man began to improve physically. Mr. Nally instructed him in the rudiments of a handyman's job. The Nally children taught him the rudiments of the English language. He and the Nally children became boon companions. He played with them, was taken to the theater and to parties with them. He attended them when they were ill. More and more he became part of the family circle. He was a home body, spending most of his time in the Nally home, wherein he had the run of the house with the family, which trusted him. He was steady and sober. At Christmas, Easter, and on birthday anniversaries he and the family exchanged gifts. At various times Mr. Nally gave him presents, including money, which was a part from his salary. He was treated like a son and he regarded the Nally family as his own. He took pleasure in telling the neighbors that his home was with the Nallys. He took a real interest in the Nally family life even more than the Nally children. He was older than they and many times he made suggestions that were helpful in the conduct of the Nally household affairs and in Mr. Nally's business matters. After the death of his father in Germany in 1934 or 1935, and his sister in India a year later, his only foster parents were the Nallys. When Mr. Nally became ill in 1933 or 1934, he attended him and when Mrs. Nally died, he occupied the same pew in the church with the Nally family. He remained part of the Nally household and never left it until he was inducted into the United States Army on December 9, 1943. Before joining the United States Army, he gave Mr. Nally all his belongings to keep in case he failed to return saying, "They are yours, because you have been When he was inducted into the Army, Mr. Nally gave him money to meet any emergencies. After joining the Army, the serviceman bought $225 worth of United States bonds, making them payable to Mr. Nally on death, and sent them to Mr. Nally. When he visited New York City on furloughs he lived at 105 West Sixty-fourth Street, and Mr. Nally gave him sums of money at various times. On April 1, 1943, at Camp Philips, Kans., he signed an application for $10,000 national service life insurance, in which he designated Mr. Nally as his sole beneficiary, describing him as his "loco parentis," having lived "9 years in his home" and set forth his address as "105 West Sixty-fourth Street, New York City." On May 1, 1943, at Camp Philips, he was made a citizen of the United States. His certificate of naturalization, No. 5644871, issued by the District Court of Salina County recites that the court found that the serviceman was "then residing at 105 West Sixty-fourth Street, New York, N. Y." He sent the certificate to Mr. Nally. On May 15, 1943, the Veterans' Administration notified Mr. Nally at his home, 105 West Sixty-fourth Street, that the serviceman had applied for $10,000 life insurance. On August 14, 1943, at Camp Philips, the serviceman executed a general power of attorney, appointing Mr. Nally to receive his service checks, etc., and handle all his matters. On July 2, 1944, the serviceman needed money to come home on furlough. Mr. Nally in response to his telegram wired him $50 on July 2, 1944. On July 6. 1944, he advised Mr. Nally by Government post card that his future address would be in care of Postmaster, New York. Mr. Nally received it on July 22, 1944. When he came to New York City on his final furlough, he came to Mr. Nally's home, 105 West Sixty-fourth Street, where he remained until leaving for overseas. The family bade him good-by. Mr. Nally accompanied him to the Pennsylvania Station, and was the last person to wish him good luck and see him off. On February 21, 1945, while crossing the German frontier, he was killed in action. His body lies buried in Luxemburg. Secretary of War Stimson wrote Mr. Nally: "Your son has been awarded the Purple Heart posthumously.' The captain of the Three Hundred and First Infantry and the Attorney General expressed their sympathy to Mr. Nally; the Government sent Mr. Nally the Serviceman's Good Conduct Medal and the Purple Heart; but Mr. Nally's request for the insurance was denied by the Veterans' Administration on the ground that since there was no association between the serviceman and Mr. Nally during the minority of the serviceman, the relationship of loco parentis could not be established before the Veterans' Administration in favor of Mr. Nally. Mr. Nally appealed to the Board of Veterans' Appeals. In connection with Mr. Nally's appeal to the Board of Veterans' Appeals, Hon. Edward E. Odum, Solicitor of the Veterans' Administration, under date of January 13, 1947. wrote Mr. Nally, stating, among other things: "2BS XC-3, 873,648 Ley, Ferdinand. "JANUARY 13, 1947. includes "The word 'parent' is defined in section 601 (f) of the act as follows: "The terms 'parent', 'father and mother' * * * persons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than 1 year * * etc. "It is not doubted that the insured desired the proceeds of the policy to be paid to you in the event of his death, nor that he regarded you as being in the relation of a father to him. "Moreover, the evidence is regarded as sufficient to show that the insured was an orphan, born in Germany, whom you befriended and took into your home when he was in need of friendship, of material assistance, and perhaps also of moral encouragement and guidance. "The evidence shows also, however, that the insured was born on June 11, 1905, and was 24 years of age when you first became acquainted with him in September 1929. "Thus the case presents the naked question as to whether, within the meaning of section 601 (f) of the act, supra, a loco parentis relationship may be established in respect to an adult who is not incapacitated. "The facts that you were designated by the soldier as being in loco parentis to him and are shown by the evidence to have befriended him and to have taken him into your home and, finally, that doubt exists as to whether the proceeds of the policy can be paid to anyone, unless payment is made to you, combine to present a very strong and appealing case in behalf of your claim." On November 13, 1947, Hon. R. L. Jarnagin, Chairman of the Board of Veterans' Appeals, wrote Mr. Nally, stating, among other things, the following: "It may be seen, however, that your appeal was not denied on the basis that you did not actually support or intend to support the veteran during his stay with you, but that since there was no association between the veteran and yourself during his minority, the relationship of loco parentis could not be established in your favor." From the foregoing it would appear that the objection to paying the insurance to Mr. Nally is based solely upon the ground that the loco parentis relationship began after the serviceman became 21 years of age, while under the act, section 601 (f), as construed by the Veterans' Administration, it should have begun before he reached 21 years of age. Under the circumstances herein, this construction results in a severe hardship to Mr. Nally and negatives the deceased serviceman's direction that in the event of his death the insurance should be paid to his loco parentis. Therefore, your committee feels that Mr. Nally is justly entitled to receive the insurance, which this soldier intended for him to receive in case of his death. Appended hereto is report from the Veterans' Administration together with other pertinent evidence. VETERANS' ADMINISTRATION, OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS, Hon. EARL C. MICHENER, Chairman, Committee on the Judiciary, House of Representatives, Washington 25, D. C. DEAR MR. MICHENER: Further reply is made to your letter of December 1, 1947, requesting a report on H. R. 4566, Eightieth Congress, a bill for the relief of William Nally, which provides as follows: "That the Administrator of Veterans' Affairs is authorized to pay to William Nally, New York City, the proceeds of National Service Life Insurance Policy Numbered 10,171,649 issued to Ferdinand Ley, late private, Company A, Three Hundred and Nineteenth Medical Detachment, United States Army, who was killed in action in Luxemburg, on February 21, 1945. Although the said William Nally was designated by the insured as beneficiary of such policy, his claim for payment thereunder was disallowed by the Veterans' Administration on the ground that he did not stand in loco parentis to the insured within the meaning of the National Service Life Insurance Act of 1940, as amended, because such reationship did not have its inception during the minority of the insured." According to a report from the War Department, Ferdinand Ley enlisted in the United States Army on December 9. 1942, and was killed in action on February 21, 1945. The serviceman applied for $10,000 national service life insurance on April 1, 1943, and such insurance was in force at the time of his death. In his application for insurance, Mr. Ley designated William Nally, as beneficiary of the insurance and described Mr. Nally as being in the relationship of "loco parentis." The evidence shows that the natural parents of the insured were dead when the insurance was granted; that he was born on June 11, 1905, and was 24 years of age when he first made the acquaintance of Mr. Nally. In an application filed May 14, 1945, Mr. Nally made claim for payment of the national service life insurance issued to the serviceman. After consideration of the evidence it was determined by the Veterans' Administration that the claimant did not stand in the relationship of foster parent to the insured and was not entitled to the insurance since it was shown that the insured was over 21 years of age when he came to live with the claimant. In a letter dated June 4, 1945, the Veterans' Administration advised Mr. Nally of this decision and of his right to appeal therefrom. Upon appeal from the decision of June 4, 1945, and after a hearing before the Board of Veterans' Appeals, held November 14, 1945, at which time the claimant made a personal appearance and introduced evidence in his own behalf, it was determined that Mr. Nally could not be recognized as having stood in loco parentis to the veteran within the meaning of the National Service Life Insurance Act of 1940, as amended. Section 602 (g) of the National Service Life Insurance Act of 1940, as amended, provides: "(g) The insurance shall be payable only to a widow, widower, child (including a stepchild or an illegitimate child if designated as beneficiary by the insured), parent, brother, or sister of the insured. The insured shall have the right to designate the beneficiary or beneficiaries of the insurance, but only within the classes herein provided, and shall, subject to regulations, at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries but only within the classes herein provided: Provided, That the provisions of this subsection as to the restricted permitted class of beneficiaries shall not apply to any national service life-insurance policy maturing on or after the date of enactment of the Insurance Act of 1946." Section 601 (f) of the National Service Life Insurance Act of 1940, as amended, provides: "(f) The terms 'parent', 'father', and 'mother' include a father, mother, father through adoption, mother through adoption, persons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than one year, and a stepparent, if designated as beneficiary by the insured." Under the precedents of the Veterans' Administration a person may not be recognized as standing in loco parentis to another where the relationship commenced after the insured attained the age of 21 years. There is enclosed for your use, a copy of Administrator's Decision No. 536 which discusses the basis of this rule; and a copy of Committee Print No. 173 of the Committee on Veterans' Affairs, House of Representatives, Eightieth Congress, which contains an unfavorable report of December 2, 1947, by the Veterans' Administration on H. R. 2073, Eightieth Congress, a bill which proposes to amend section 601 (f) of the National Service Life Insurance Act, as amended, supra, by adding at the end thereof the following new sentence: “A person shall be deemed to have stood in loco parentis to a member of the military or naval forces whether he acquired such status before or after such member attained the age of twenty-one years." H. R. 4566 would require recognition of Mr. Nally as standing in loco parentis to the serviceman when such relationship came into existence after the insured attained the age of 21 years. The enactment of this bill would result in discrimination in favor of this claimant and grant him special rights which have been, and would be, denied in cases of equal merit. Under the circumstances the Veterans' Administration is unable to recommend favorable consideration of H. R. 4566, Eightieth Congress, by your committee. Advice has been received from the Bureau of the Budget that there would be no objection to the submission of this report to your committee. Sincerely yours, CARL R. GRAY, Jr., Administrator. VETERANS' ADMINISTRATION, OFFICE OF SOLICITOR, Washington, D. C., January 13, 1947. In reply refer to: 2BS XC-3, 873, 648 Ley, Ferdinand. MR. WILLIAM NALLY, 105 West Sixty-fourth Street, New York 23, N. Y. DEAR MR. NALLY: The Chairman of the Board of Veterans' Appeals has asked me to review the file pertaining to your claim for insurance benefits and to respond further to your letter of November 27, 1946. The obstacle, if any, to the recognition of the validity of your claim is found in the provisions of section 602 (g) of the National Service Life Insurance Act, as amended, which reads: "The insurance shall be payable only to a widow, widower, child (including a stepchild or an illegitimate child if designated as beneficiary by the insured), parent, brother, or sister of the insured. The insured shall have the right to designate the beneficiary or beneficiaries of the insurance, but only within the classes herein provided, and shall, subject to regulations, at all times, have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries but only within the classes herein provided: Provided, That the provisions of this subsection as to the restricted permitted class of beneficiaries shall not apply to any national service life-insurance policy maturing on or after the date of enactment of the Insurance Act of 1946.' The word "parent" is defined in section 601 (f) of the act as follows: "The terms 'parent', 'father', and 'mother' includes a father, mother, father through adoption, mother through adoption, persons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than one year, and a stepparent, if designated as beneficiary by the insured." Ferdinand Ley was a private in the United States Army, who was killed in action on February 21, 1945. He had applied for $10,000 national service life insurance on April 1, 1943, and had paid the required premiums to the date of his death. You were the designated beneficiary of this insurance. The insured described you upon his application as being in the relationship to him of "loco parentis.' He wrote beneath your name the words "Lived 9 years in home." It is not doubted that the insured desired the proceeds of the policy to be paid to you in the event of his death nor that he regarded you as being in the relation of a father to him. Moreover, the evidence is regarded as sufficient to show that the insured was an orphan, born in Germany, whom you befriended and took into your home when he was in need of friendship, of material assistance, and perhaps also of moral encouragement and guidance. The evidence shows also, however, that the insured was born on June 11, 1905, and was 24 years of age when you first became acquainted with him in September |