Legal Document

334 U.S. 602 68 Supreme Court Reporter 1284 92 L.Ed. 1601 UNITED STATESv.ZAZOVE. Number 432. Argued April 19, 1948. Decided June 14, Rehearing Denied Oct. 11, See 69 12. [Syllabus from pages 602-604 intentionally omitted] Mr. Oscar or Haw. Hawai‘i Reports KFH45 A2 Davis, of Washington, D.C., for petitioner. Edward S. Martin, Chicago, Ill., respondent. Chief Justice VINSON delivered the opinion Court. 1 We are called upon in this case to determine whether Regulation 3450 Veterans' Administration1 is accord with a proper construction § 602(h)(2) National Service Life Insurance Act 1940.2 2 Respondent, Tillie Zazove, was designated beneficiary $5,000 contract Insurance. The insured died 1943, and named filed her claim insurance Administration. Upon denial claim, suit instituted District Northern Illinois.3 ruled, on its view facts, that Mrs. Zazove did not stand loco parentis soldier hence one persons who could be made as provided by statute.4 On appeal, Circuit Appeals Seventh ruled contrary remanded further proceedings. 156 Federal Reporter, 2nd Series 24. 3 issue remaining determination remand validity 3450. It sustained regulation properly issued pursuant Act. second Appeals, judge dissenting, reversed. 162 443. granted certiorari review important question statutory involved. 4 basic provision involved 602(h) 1940, which provides under 'shall payable following manner: 5 '(1) if whom payment first thirty years age at time maturity, two hundred forty equal monthly installments: * 6 '(2) If more installments twenty months certain, such payments continuing during lifetime beneficiary.' 7 Administrator, acting general rule-making power given him Act,5 promulgated (set forth margin)6 shortly after enactment statute, put into operation. provides, beneficiaries covered clause (1), 'payment shall 240 rate $5.51 each $1,000 insurance.' amount installment so calculated sum equals face value plus 3% intr est per annum. 8 (2) issue, since case, than old when policy matured. For beneficiaries, receive life 120 'amount determined last birthday death insured, accordance schedule based American Experience Table Mortality interest percentum *' Accordingly, size varies merely but also beneficiary, latter factor being used basis an actuarial computation whereby equalized over expectancy beneficiary. Under interpretation 602(h)(2), respondent, 54 entitled $29.50, $5.90 she had beneficial interest. These paid certain,7 continue lives beyond 10-year period. 9 In reversing Court, held method calculation e t inconsistent provisions 602(h)(2). construed provisions, respondent's contention, plainly requiring total period certain should insurance, construction, $48.08, instead installment, will (plus interest), $3,450 interest) Administration, due survives guaranteed same rate. Taking account Zazove's estimated Mortality, actual cash insured's would $8,145 regulation.8 10 arriving decision, majority reasoned terms clear unambiguous; nothing said statute about equalizing beneficiary; Congress unmistakably prescribed certain. major difficulty reasoning lies inadequate consideration it gives full extent effect, stopped short, reading subsection, end phrase 'in certain.' By stopping short phrase, court failed consider alternative possibility intended immediately 'with beneficiary,' provide additional equally essential component equivalent insurance. Assuming section fact what intended, only interpretative computed any manner made, giving weight beneficiary's policy, assumption. because regard payability installments, possibly constituting significant serviceman contracted, rather sheer gratuity conferred Congress, subsection without ambiguity 11 Moreover, very presence term 'certain' 'equal certain' suggests reached below. noted mind, clearly 602(h)(1), fixed number there no occasion use describing and, indeed, found 602(h)(1). While inclusion might conceivably mere superfluity, least far greater probability specialized, technical sense generally employed field—namely, indicate guaranty forthcoming, where option throughout payee, individual varying depending matures.9 12 Hence, our view, entirety suffices demonstrate language free preclude adopted Administration To extent, we believe error. But alone necessarily invalidate holding since, Government appears concede, unambiguously regulation. Indeed, inherent were ordinary commercial well substantial ground construing favor insured.10 13 There is, course, marked distinction between criteria judicial contract, act setting up system national servicemen administered governmental agency. ambiguous, liberally effectuate purposes mind. respect, may appear similar ambiguous insured. favorable rests theory 'The phraseology contracts chosen insurer form tendered prospective holder often training, rarely accepts lawyer his elbow. So reasonably open constructions, unless obvious words their connotation they meaning common speech imports. *'11 expression legislative intent embodiment agreement person. Only insurer, need ascertained fix terms; layman understanding does have relevance here has contract.12 14 other hand, think administrative purporting construe 1940 automatically deemed valid interdicted particular construed. Administrator's power, exercised issuing 3450, limited 'such rules regulations, chapter, necessary ap ropriate carry out *.'13 1946 amendment 608, designed eliminate finality decisions Administrator matters,14 amended sentence 608 add set italics: 15 'Except event 617 hereof, appropriate proceedings, all rendered Act, regulations thereto, final conclusive questions law fact, official United States, except judges States courts, jurisdiction decisions.' 16 extension procedures available secure review, interpolation word 'properly,' addition, presumably abundance caution, tautological 'except courts' indicative congressional concern subject casual scrutiny controverted statute. 17 must read context related sections indicia before can adequately 'not inconsistent' 'necessary purposes.' turn therefore narrow, semantic considerations broader readily comprehended. 18 becomes apparent respective assumptions consequences interpretations us tested against history viewed entirety. result conferring return group i.e., death, entitled. unquestioned group, original provisions,15 (i.e., 20-year period) aggregate interest, thereafter, payee survived But, ruling many most cases involving former exceed amount. 30-year ruling, almost half times amount,16 whereas 29-year 602(h)(1) (whose question), never amount, And high greatly policies statute.17 19 This sharp disparity different groups regulation, formula approximate policies, difference indicated table, margin,18 comparative present values taking shown Mortality. 20 thought probable originally higher benefit restricted 30 serviceman's include parents, middleaged, 'young widows small children whose ten needed time.'19 hardly serve explain, however, why discriminate similarly deserving slightly younger widow under-thirty category failing extend comparable benefits group. 21 contrasted those reflected correspondingly large increase, liability payments.20 enhanced met, theoretically, either ways: special appropriations, increased premium rates substantially above now assumption proper. 22 bear burden extraordinary liability. express specified costs system,21 excess mortality disability cost resulting extra hazards war,22 reimbursing reserve fund waiving recovery erroneously inequitable require repayment.23 obviously contemplated meet liabilities self-supporting, premiums yield invested, respects aside exceptional situations specifically financial burden. Yet nowhere huge anticipated impressed respondent finds there; striking omission persuasive, absence cogent contrary, generosity magnitude contemplated.24 23 Nor assumed envisaged enough added proportions. Senator Harrison, charge bill, informed Senate 'Premium average age—25 years—will 67 cents thousand month.'25 Such rate, though adequate cover completely construction. 24 whatever exists dispelled practice effect Insurance, established World War & N Dec. Immigration Nationality Decisions veterans, long-established prat ice companies, part background experience draftsmen 25 Veterans 1924,26 authorized (formerly Bureau) 'for optional settlements, selected thirty-six more. One options 3068 authorization, amounts appended table—the graduated, just 'age insured'—'will dies been paid, unpaid policy.'27 26 seems draftsmen, framing (2), undoubtedly striving incorporate modeled life-annuity-with-240-payments-certain 1924, deviating materially guaranteed. True, itself define expressly determining case. factors previously considering them 1924 reasonable conclusion acturial one, subscribe opposite conclusion, wording bestow II disproportionate servicemen. somewhat provision, along disparities required puts too great strain imagination. 27 example standard considered even more, implied follow existing calculating installments. As noted, appearing connotes, commonly payable. 28 example, income 'Made annual, semi-annual, quarterly instalments person depends. instalment date operative. table page, annum, sex nearest instalment, deped s. *'28 Another closer concise using 'fixed' 'certain,' 'the below (a graduated respect 'Age Payee Nearest Birthday Date First Instalment'), be, long thereafter survive, immediately.'29 29 manifest juxtaposition having connotations. Section 605(b), authorizes 'to (the Fund) accepted principles, *.' (Italics added.) 602(e) rates, 'cash, loan, up, extended values, calculations connection centum event, subsequent indicates approval A proposed bill suggested letter written June, 1944, amend §§ authorizing election refund lieu mode provided.'30 explaining necessity amendment, pointed 'a minor child, received cease completed less child young capable self-support expire. amendments authorize every instance insure policy.'31 31 words, partly theretofore eligible 240-payment plan, solution situation presented amounted beneficiaryd ied value. thus sought ameliorated existed, correct 32 Committee Finance, recommending passage explanatory various bill32 thereby embodied otherwise purpose claimed effected illusory. included letter, comparing imstallment new plan apprised enacting amendment33 based.34 33 Similar recognition instances actually payable' settlement 'amounted much policy' House Legislation, permit prior 1944 elect plan.35 modes maturing August 1, 1946, third couched identical 602(h)(2).36 enacted incorporated brought attention occasions. 34 Further evidence, needed, own supplied maintained reenactment light Report bill. conceivable conceivable, explicable—that meant thing measure another, quite thing, reenacted 1946. 35 foregoing decision 36 Reversed. Fed.Reg. 1162, 1166, 38 Code Regulations 1941 Supp. 10.3450. Part I, Title VI Second Revenue 8, chapter 757, Statutes-at-Large 974, 1008, KF62 801, 802(h)(2), Annotated KF65 U5 802(h)(2). Pursuant 817, 817. 602(g), 802(g), 802(g). Sec. 808, 808: direction President, administer, execute, enforce make purposes, decide arising hereunder. 'Payment beneficiary.—Upon proof while force, accrued insured) become '(a) '(b) life-time annum: "Age Amount 30...................... $3.97 . 40....................... 4.50 50....................... 5.39 54....................... 5.90 60....................... 6.81 68....................... 8.19 70....................... 8.51 80....................... 9.55 fails survive period, 'thereafter until paid.' 3451, C.F.R.Cum.Supp. 10.3451. infra note 18. examples, text infra, usage policies. Aschenbrenner versus Fidelity Guaranty Co., 1934, 292 80, 84 et seq., 590, 592, 78 1137; Manufacturers' Accident Indemnity company Dorgan, Cir., 58 KF105 F3 945, 956, L.R.A. 620. supra 10, 84, 85, U.S., page 590 not, deny give rise obligation force binding Lynch 571, 579, 840, 843, 1434. quoted supra, 6. S.Rep.No.1705, 79th Cong., 2d Sess. 9; H.R.Rep.No.2002, 10; 60 781, 788, amending 608. future regardless age, annuity thirty. 785, adding (t)(3) Ibid. mentioned pam ents age. Acceptance offered, four settlements (see infra), three maturity fourth offer death. Table, years. dies, computed, estimates that, approximately 2.1 billion dollars claims already incurred settled months, Court's 1.8 dollars. Government's brief, Page 67. Potential billions yet mature vastly view. precise course problematical. Solicitor General, dated October 24, 1947, matured typical woman aged husband, potential 97 dollars, 3450)—an 62 10% lapsed reinstated, (on assumptions) 19.7 these overly contentions fully borne events, obvious—even allowing wide margin error—that Present Beneficiary's C. Atlantic 10............... $1,000. $2,786 20............... 1,000. 2,633 30............... 2,421 40............... 2,136 50............... 1,783 54............... 1,629 60............... 1,411 70............... 1,129 Appendix Defendant brief mathematical formulae constructing table. Transcript Record, 10. putative tremendously removed limiting factor. supra. 606, 806, 806. 607(a), 807(a), 807(a). 609, 809, 809. Subsequent States. See, e.g., U.S.C.Supp. V, 802 seq. Cf. speaking through Holmes, Pine Hill Coal 1922, 259 191, 196, 42 482, 483, 66 894: 'A imposed where, here, mount sums, plainest warrant imposed. 86 Cong.Rec. 12920 (1940). III, 43 607, 624, amended, 512, 512. 10.3068. Handy Guide Standard Special Contracts (1940) 294. 613. illustration infra): pay payee's life, proceeds refunded, option, 'Option 4—Life Income With Instalments Certain' payable, immediately. Guide, 28, 983. id. 1284-85. S.Rep. 1105, 78th 2, quoting letter. 1. 762, 763, providing 'may elect, payment, order including reduced necessary, indebtedness beneficiary: Provided further, That shorter nor commenced amendatory Act.' Alexander Mayor, &c., 1809, Cranch 7, 19. H.R.Rep. 2002, 5. approved 5(a) amends indicated. 782, 783. (t). follows: 'Insurance settlement: sum. number, multiples twelve. '(3) '(4) pr iod indebtedness, Provided, months.

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