1. Under § 303 of the World War Veterans Act of 1924, as amended
by Act of 1925, where the beneficiary of a yearly renewable term
insurance policy dies, after having received part of the 240
monthly installments provided for in the contract, and the estate
of the insured becomes entitled, the amount payable to the estate
is the present value of remaining unpaid installments, computed as
of the date of the beneficiary's death, excluding interest. P.
316 U. S.
214.
Page 316 U. S. 210
2. The fact that, because of the refusal of the Government to
recognize the claim, its payment was delayed until after the period
for monthly payments provided in the policy had expired did not
entitle the estate in this case to have the interest included in
computing the present value of such installments. P.
316 U. S.
214.
3. The provision of the amendatory Act of 1925 that present
value shall be computed "as of the date of the last payment made
under any existing award" is confined to cases where, prior to
1924, part payment to such estates had been made in monthly
installments, including interest, and the purpose of the amendment
was to avoid the retraction of interest already so paid which would
otherwise result from the retroactive lump sum provision of the
1924 Act. P.
316 U. S.
213.
74 App.D.C. 244, 122 F.2d 638, reversed.
Certiorari, 314 U.S. 605, to review a judgment recovered in a
suit on a veteran's insurance policy in the District Court for the
District of Columbia. The court below, on the plaintiff's appeal,
directed that the recovery be increased.
MR. JUSTICE BYRNES delivered the opinion of the Court.
Joseph Kelly Kerr, while in the United States Army during the
last war, took out a yearly renewable term insurance policy in the
amount of $10,000, naming as beneficiary his father, Eugene Kerr.
The insured died November 8, 1919. On March 6, 1920, the War Risk
Bureau denied any liability under the contract. Eugene Kerr, the
designated beneficiary, died June 24, 1924. This suit was filed
November 6, 1925.
In the District Court, judgment was rendered denying any
recovery on the policy. The Court of Appeals for
Page 316 U. S. 211
the District of Columbia, on December 4, 1939, reversed the
judgment of the District Court. 71 App.D.C. 222, 108 F.2d 585. The
District Court, on April 5, 1940, entered judgment for $3,220.00 in
favor of the estate of Eugene Kerr, the beneficiary under the
policy, and a judgment for $10,580.00 in favor of the estate of the
insured, Joseph Kelly Kerr. Upon rehearing, the District Court, by
its order of January 9, 1941, reduced the latter judgment to
$8,227.50. On appeal, the Court of Appeals again reversed the
District Court, and ordered the payment of $10,580.00. 74 App.D.C.
244, 122 F.2d 638. We granted certiorari. 314 U.S. 605.
The insurance contract provided for the payment of 240 monthly
installments of $57.50 each. It is not disputed that Eugene Kerr,
as beneficiary, was entitled to receive the 56 monthly installments
that accrued during his lifetime. [
Footnote 1] They aggregated $3,220.00. The portion of the
District Court's judgment which awarded that sum to Eugene Kerr's
estate is not in controversy.
The issue here involves only the amount due the estate of Joseph
Kelly Kerr, the insured, on the 184 installments remaining after
the death of the beneficiary. The government contends that the
amount due the estate is $8,234, which represents the present value
of the 184 installments computed as of the death of the beneficiary
on June 24, 1924. Respondent argues that the amount due is $10,580,
which is the aggregate of 184 installments of $57.50 each.
[
Footnote 2]
Prior to 1924, the statutes of the United States directed that,
when the estate of an insured became eligible to proceeds
Page 316 U. S. 212
under the contract, [
Footnote
3] they should be paid in regular monthly installments. The
most recent enactment prior to that year was the Act of August 9,
1921, which provided:
"If no person within the permitted class of beneficiaries
survive the insured, then there shall be paid to the estate of the
insured the monthly installments payable and applicable under the
provisions of Article IV of the War Risk Insurance Act [Act of
October 6, 1917, c. 105, 40 Stat. 398, 409]. . . . [
Footnote 4]"
The World War Veterans' Act of 1924 [
Footnote 5] superseded the War Risk Insurance Act of 1917
and its amendments. It provided, in § 303:
"If no person within the permitted class of beneficiaries
survives the insured, or if, before the completion of payments, the
beneficiary or beneficiaries shall die and there be no surviving
person within said permitted class, then there shall be paid to the
estate of the insured the present value of the monthly installments
thereafter payable under the provisions of this title. . . ."
This section altered the method of payment only with respect to
benefits payable to the estates of insured. It did not change the
method of payment to beneficiaries. Its obvious purpose was to have
the obligation to the estate paid in one lump sum, rather than in
monthly installments. Since these installments included interest,
as well as principal, Congress desired to eliminate the interest
when it provided for the lump sum payment. Accordingly, it declared
that the lump sum should be equal to "the present
Page 316 U. S. 213
value of the monthly installments thereafter payable." The word
"thereafter" plainly relates to the death of the beneficiary in a
case like the one before us. And this has been the interpretation
placed upon the section by the Veterans Administration ever since,
the requirement being that the present value is to be computed as
of the date of the death of the beneficiary.
In 1925, § 303 was amended in several respects. [
Footnote 6] The only one of these which is
important here is the addition of the following words: "said value
to be computed as of the date of last payment made under any
existing award." And this is important only because of the
confusion which it has generated in the disposition of this case.
According to a letter addressed to the Solicitor General by the
Administrator of the Veterans Administration on July 14, 1941 (R.
41), the language quoted was added to § 303 to correct a specific
inequity which had arisen in a number of cases following the 1924
Act, but which is not encountered here. That inequity arose in this
way: in several cases, the estate of the insured had become
entitled to the proceeds of the policy prior to 1924, and a number
of the $57.50 monthly installments had already been paid to the
estate of the insured at the time Congress enacted § 303, with its
provision for a lump sum payment to the estate. Since § 303 was
made retroactive to October 6, 1917, the amount due the estate in
these cases, as in the others, was held to be the present value of
the installments remaining due after the death of the beneficiary,
computed as of the date of death of the beneficiary. But, in these
cases, unlike the others, that portion of the installments already
paid to the estate which represented interest had to be deducted
from the lump sum award. To avoid this partial withdrawal of funds
which had actually been released in these particular cases,
Congress provided in the 1925 amendment that the "present value
Page 316 U. S. 214
of the monthly installments thereafter payable" should be
computed "as of date of last payment made under any existing
award." Under this formula, the installments which had been paid to
the estate of an insured prior to 1924 were not disturbed. The
Veterans Administration has consistently treated the 1925 amendment
as applicable only to this limited number of cases. In the others,
it has invariably computed the "present value" as of the date of
death of the beneficiary. This administrative interpretation over a
period of 17 years controlling the settlement of thousands of cases
is entitled to great weight, "and such construction is not to be
overturned unless clearly wrong or unless a different construction
is plainly required."
United States v. Jackson,
280 U. S. 183,
280 U. S.
193.
In this case, no award had been made prior to 1924, and hence
the amount due to the insured's estate could not be computed "as of
date of last payment made under any existing award." This language
of the 1925 amendment therefore cannot be applied to the facts
here. But it does not follow that the balance of § 303 does not
apply. Indeed, § 303 is the only present authority for the making
of any payments to the estate of the insured. [
Footnote 7] Disregarding the words added by the
1925 amendment, the section simply requires the payment to the
estate of a lump sum equal to "the present value of the monthly
installments thereafter payable." And the latter language, as we
have said, has been consistently interpreted to mean "present
value" as of the date of death of the beneficiary.
The Court of Appeals was of the opinion that, because
recognition of the claim had been delayed until after the passage
of the 240 months, the principles of computation
Page 316 U. S. 215
embodied in the 1924 Act and the 1925 amendment required a
settlement as if there had been an award of monthly installments.
That is, it took the view that the 184 monthly installments
concededly due to the estate should be multiplied by $57.50, which
represents a payment of interest as well as principal, and the
resulting total of $10,580 awarded to respondent. But one of the
purposes of the 1924 and 1925 enactments was to abolish the monthly
installment method of settling the claims of veterans' estates.
Congress could not have made clearer its intention that the value
of the remaining installments, purged of interest, should be paid
in a lump sum to the estate. Both the Veterans Administration and
this Court have recognized a legislative policy against the
allowance of interest on past due payments on these policies.
United States v. Worley, 281 U. S. 339. The
error which undermines respondent's contention and the decision of
the Court of Appeals is the failure to give full effect to this
Congressional purpose to eliminate interest from the lump sum
settlement.
The Court of Appeals was evidently impressed by the delay in the
settlement of respondent's claim. We share that concern. The
insured died almost 23 years ago, and final disposition of the case
is only now in view. But responsibility for the delay is not easily
apportioned. [
Footnote 8] And,
in any event, it could not influence our construction of the
language of the statute. Congress has authorized neither the
payment of damages for the delay nor an award of interest on past
due obligations incurred under these insurance certificates, and it
is not within our power to do so.
The case is remanded for reinstatement of the judgment of the
District Court.
Reversed.
[
Footnote 1]
I.e., from Nov. 8, 1919, the date of the death of the
insured, through June 8, 1924, the last due date for a monthly
installment prior to the beneficiary's death.
[
Footnote 2]
It is agreed that, however this issue is resolved, respondent's
recovery is subject to a deduction of $6.50, the amount of a
premium due on the policy for November, 1919, the month during
which the insured died.
[
Footnote 3]
The claim to the proceeds might fall to the estate in several
ways, such as by the death of the named beneficiary or by the death
of an insured who has designated no beneficiary. Since the
respondent in this case became entitled as of the death of Eugene
Kerr, the beneficiary, the latter will be spoken of as the critical
event in our discussion.
[
Footnote 4]
§ 407, 42 Stat. 148.
[
Footnote 5]
C. 320, 43 Stat. 607.
[
Footnote 6]
43 Stat. 1310.
[
Footnote 7]
The insurance contract is expressly made subject to the War Risk
Insurance Act of 1917, and all amendments thereto.
See White v.
United States, 270 U. S. 175,
270 U. S.
180.
[
Footnote 8]
Although the Veterans Bureau denied recovery on the policy in
1920, it was not until 1925 that this suit was instituted.