Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Evan A. Evans, Judge.
Before ALSCHULER and SPARKS, Circuit Judges, and BARNES, District Judge.
An opinion was written by the court, in which the question of jurisdiction was very carefully considered, and we think it would serve no good purpose for us to restate the propositions there decided upon. We therefore incorporate that opinion as a part of our own:
"It is first necessary to determine a question upon which the jurisdiction of this court depends. In other words, it is necessary to determine whether there has been a 'disagreement as to claim under a contract of insurance between the bureau and any person or persons claiming thereunder' for it is well settled that a disagreement between the bureau and the claimant as to the validity of the claim is essential to the claimant's right to bring an action thereon. Griffin v. United States (C.C.A.) 60 F.2d 339; Kelley v. United States (D.C.) 59 F.2d 743; Taylor v. United States (D.C.) 57 F.2d 331; Mara v. United States (D.C.) 54 F.2d 397; Smith v. United States (D.C.) 56 F.2d 636.
"Section 445, 38 USCA, provides for the bringing of actions against the United States in the United States District Court in the district in which the claimant or any one of them resides. The first clause of the first sentence provides: 'In the event of disagreement as to claim under a contract of insurance between the bureau and any person claiming thereunder an action on the claim may be brought against the United States. * * *' This act was passed June 7, 1924, § 19, and was amended March 4, 1925, § 2, and has been recently amended on May 29, 1928, § 1, and July 3, 1930, § 4. For the last amendment see 38 USCA § 445.
"It is the last paragraph of the last amendment which defines the words 'claim' and 'disagreement.' The latter term, 'disagreement' means the 'denial of the claim by the director or some one acting in his name on an appeal to the director.' 'In the rather careful opinion in Andy Anderson v. United States, 5 F. Supp. 269, decided by the United States District Court for the Eastern District of Kentucky on December 17, 1932, it is held that there can not be a disagreement since this amendment was adopted until the claimant has exhausted his remedy by appeal. Prior to this time the Solicitor General and the courts had held that the claimant could bring his action in the District Court without taking an appeal.
"An examination of the dates in the instant case is interesting as showing that this appeal was taken before the amendment above alluded to was made. It appears that on June 13, 1929, a decision was rendered upon the claimant's claim. On June 17, 1929, an appeal was taken from that decision. On June 25, 1929, the department recognized the appeal and sent the papers to the appellant board. On June 28, 1929, the instant action was begun. The Andy Anderson Case, supra, in addition to holding that the claimant, after the amendment was enacted, was required to prosecute his appeal, held as follows:
"'The taking of the appeal from the denial annulled its operative effect as a basis for bringing the action, if it otherwise existed. This is evident from the fact that the limitation on the time in which suit might be brought after final denial, would begin to run not from the denial of July 3, 1929, communicated July 15, 1929, but from the denial on the appeal. There is nothing in the opinion of the Solicitor General, quoted above, justifying the position plaintiff could both appeal and sue. What he held was that the claimant need not appeal but might sue without further dealing with the Bureau.'
"Conceding for the purpose of the argument that since the amendment the claimant must exhaust his remedy by appeal, the question remains, what was the effect of an appeal by the claimant before the amendment. Undoubtedly it was recognized as the claimant's right to bring suit after his claim had been disallowed. He was not required to appeal. But having appealed, can he still maintain that there was a disagreement?
"It would seem to me that a fair construction of the word 'disagreement' contemplated final termination of the action by the claimant before the bureau. If a claimant has his claim denied by the bureau he may ask for the privilege of submitting evidence. If his request is granted, it can not be said that the proceedings have reached that stage where there is a disagreement. Likewise, if the claimant sees fit to appeal from the ruling of an inferior trier in the bureau to the head of the department, the stage in the proceedings has not been reached where it can be said that there is a disagreement.
"Moreover, it seems to me inconsistent with the grant of jurisdiction to the District Court to hear an action against the United States where there has been a disagreement in the matter of a claim, that such action might be co-pending with the appeal to an administrative officer. It seems fair to hold that the remedy by action in the District Court is to be pursued only after claimant has filed his claim with the bureau and has received an adverse ruling thereon. While appeal was not necessary under the act as it existed before the amendment, there must have been a termination of the attempted redress by the claimant in the bureau.
"It follows from what has been said, that upon the facts disclosed in this case, the court must hold that it is without jurisdiction and the plaintiff's case is dismissed."
It is further contended by appellant that the filing of the complaint in the District Court operated as an abandonment of his appeal to the Central Board of Appeals. With this contention we do not agree. If appellant had intended that to be the result of the filing of this complaint, he could easily have avoided any doubt with respect thereto by dismissing his appeal to the Central Board. This he did not choose to do, and ...