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LYNCH V. UNITED STATES, 292 U. S. 571 (1934)

U.S. Supreme Court

Lynch v. United States, 292 U.S. 571 (1934)

Lynch v. United States

No. 855

Argued May 7, 1934

Decided June 4, 1934*

292 U.S. 571


1. Policies of yearly renewable term insurance issued under the War Risk Insurance Act are not gratuities, but are contracts of the United States. P. 292 U. S. 576.

2. Such valid contracts of the United States are property, and the rights of private individuals arising out of them are protected by the Fifth Amendment. P. 292 U. S. 579.

3. Congress is without power to reduce expenditures by repudiating and abrogating the contractual obligations of the United States. P. 292 U. S. 580.

4. Consent to sue the United States on a contract is not a part of the obligation of the contract which may not be impaired; it is a privilege accorded, not the grant of a property right protected by the Fifth Amendment, and may be withdrawn at any time. P. 292 U. S. 580.

Page 292 U. S. 572

5. Withdrawal of all remedy, administrative as well as judicial, for enforcement of a contract against the United States would not imply a repudiation of the contract. P. 292 U. S. 582.

6. By the provision of § 17 of the Economy Act of March 20, 1933, purporting to repeal "all laws granting or pertaining to yearly renewable term insurance," Congress intended to take away the rights of beneficiaries under outstanding yearly renewable term policies, and not merely to withdraw their privilege to sue the United States in respect of such policies. P. 292 U. S. 583.

7. This statutory provision, being void insofar as it purports to take away the contractual right, cannot, by the rules of construction, be given effect as a withdrawal of consent to suit, non constat that Congress would have wished to deny the remedy if it had realized that the contractual right remained valid. P. 292 U. S. 586.

8. Section 5 of the Economy Act, providing:

"All decisions rendered by the Administrator of Veterans' Affairs under the provisions of this title or the regulations issued pursuant thereto, shall be final and conclusive on all questions of law and fact, and no other official or court of the United States shall have jurisdiction to review by mandamus or otherwise any such decision,"

does not relate to war risk insurance, but concerns only pensions, compensation allowances and special privileges, all of which are gratuities. P. 292 U. S. 587.

67 F.2d 490; 68 id. 442, reversed.

Certiorari to review two judgments, in different circuits, which sustained the dismissal by District Courts of actions to recover amounts alleged to be due the beneficiaries of war risk term insurance policies.

Page 292 U. S. 574

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