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 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 $3220.00 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, 62 S.Ct. 365, 86 L.Ed. --.
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. They aggregated $3220.00. 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 $8234, 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.
Prior to 1924 the statutes of the United States directed that when the estate of an insured became eligible to proceeds under the contract, 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) * * *.'
The World War Veterans' Act of 1924 superseded the War Risk Insurance Act of 1917 and its amendments. It provided, in § 303: 'If no person within the permitted class of beneficiaries survive 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 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.