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MORTON v. UNITED STATES

July 16, 1953

MORTON
v.
UNITED STATES



The opinion of the court was delivered by: BYERS

This is a motion for summary judgment in an action in which recovery is sought of the amount of the special dividends declared upon the plaintiff's National Service Life Insurance Policies N-6 077 915 and N-5 931 465 amounting in all to $ 416.50 which have been paid to the Treasurer of the United States instead of the plaintiff, because of payments of premiums made by the United States to the New York Life Insurance Company on a policy issued on the plaintiff's life; this was done pursuant to provisions of the Soldiers & Sailors Relief Act, found in Tit. 50 U.S.C.A., War and National Defense Appendix, Secs. 540-548.

The question for decision is whether the plaintiff became so indebted to the Government by reason of those outlays that their total amount could be legally offset against the dividends earned on the plaintiff's National Service policies.

 The issue is the same, although somewhat differently presented, as that decided in United States v. Nichols, D.C., 105 F.Supp. 543; that opinion was written by Judge Graven, and contains so searching a study of the legislative history of the statute, and so careful a consideration of the arguments for and against the claim of the Government for reimbursement (to which it became entitled in terms by the 1942 amendment to the Act), that the present problem is concededly one of electing whether or not to follow that decision.

 This motion for judgment is mutually and separately presented, and to facilitate its disposition, the following stipulation of facts has been filed, and accepted as the basis of decision:

 'Stipulation

 '1. That the plaintiff, Edward T. Morton, is a citizen of the United States and was at the commencement of this action a resident of the Eastern District of New York.

 '2. That plaintiff was in the active military service of the United States from October 30, 1942, to December 17, 1945; that he was on active duty with the United States Air Force when this action was commenced; and that he is presently on active duty with the Air Force and is now stationed at Lages A.F.B., Azores, Portugal.

 '3. That on January 30, 1941, plaintiff executed an application on Veterans Administration Insurance Form 380 requesting protection for his $ 5,000 insurance policy No. 11 761 050 with the New York Life Insurance Company under Title IV of the Soldiers' and Sailors' Civil Relief Act of 1940 (54 Stat. 1178, October 17, 1940).

 '4. That said application was approved by the Veterans Administration on March 24, 1941, effective as of the premium payable on March 1, 1941.

 '5. That subsequent to plaintiff's discharge from the service on December 17, 1945, i.e., on June 1, 1946, the Veterans Administration wrote plaintiff a letter advising him that he might leave his policy under the protection of the Soldiers' and Sailors' Civil Relief Act for a maximum period of two years after the date of his discharge or he could drop that protection as indicated in that letter, * * * and, if the government should be required to pay the insurance company on its guaranty, plaintiff would then owe the government the sum expended.

 '6. That plaintiff did not pay the premium on policy No. 17 761 050 with the New York Life Insurance Company falling due March 1, 1941, nor any of those premiums falling due thereafter; and that his policy No. 17 761 050 with the New York Life Insurance Company was terminated by that company on December 17, 1947, two years following plaintiff's discharge from the service.

 '7. That following the termination of policy No. 17 761 050 with the New York Life Insurance Company, that company rendered its statement of account to the Veterans Administration showing that the unpaid premiums on that policy from March 1, 1941, until its termination amounted to $ 697.74 and that, after crediting plaintiff's premium account with the cash surrender value of the policy in the amount of $ 257.20, there remained a balance due the insurance company of $ 440.54.

 '8. That the defendant has paid the sum of $ 440.54 to the New York Life Insurance Company in full satisfaction of its obligation under the Soldiers' and Sailors' Civil Relief Act of 1940 for the guaranty of policy No. 17 761 050 with that company.

 '9. That plaintiff was duly advised by the Veterans Administration of the payment to the New York Life Insurance Company of the sum of $ 440.54 and written demand was made for reimbursement, but that plaintiff has refused to pay all or any part of said sum which defendant claims plaintiff owed to it on account of its guaranty of the premiums on plaintiff's policy with said company.

 '10. That plaintiff's National Service Life Insurance Policies N-6 077 915 and N-5 931 465 participated in the special dividend declared on said policies through the anniversary day of the latter policy in 1948, i.e., March 17, 1948, in the amount of $ 236.50.

 '11. That the special dividend in the amount of $ 236.50 was paid to the Treasurer of the United States as an offset against the sum of $ 440.54 which the defendant claimed was due it on account of its guaranty of the premiums on plaintiff's policy No. 17 761 050 with the New York ...


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