
    UNITED STATES v. BOLLMAN.
    No. 9940.
    Circuit Court of Appeals, Eighth Circuit.
    Sept. 25, 1934.
    Randolph C. Shaw, Sp. Asst, to Atty. Gei)- (Kobert W. Colflesh, U. S. Atty., of Des Moines, Iowa, Will G. Boardslee, Director, Bureau of War Risk Litigation, of Washing-f0Tb B. C., and Wilbur C. Pickett, Sp. Asst, to Atty- Ben., on the brief), for the United States.
    Howard L. Bump, of Des Moines, Iowa (Johnston & Shinn, of Knoxville, Iowa, on the brief), for appellee.
    BefoKi STONE, Circuit Judge, and JOYCE and BELL, District Judges.
   STONE, Circuit Judge.

This is an appeal by the United States from a judgment according payment of installments on a war risk insurance policy.

Appellee was beneficiary of a war risk insuranee policy upon the life of her husband, who was killed in action, in October, 1918. Monthly payments of $57.50 were made her under the policy, from January 1, 1919, to September 1, 1923. Upon the latter date the payments were suspended on the ground that appellee had forfeited all right thereto under section 22 of the Act of October 6,1917 (40 Stat. 401), which provides: “The open and notorious .illicit cohabitation of a widow who is a claimant shall operate to ter•minate her right to compensation or insurance from the commencement of such cohabitan

After this termination of payments, appellee submitted proof to the bureau which led to. the withdrawal of its order of suspension. She was then paid the back installments and the regular monthly installments until October, 1925, at which time there was a seeond suspension upon the same grounds, and since that time the payments have been made to the father and mother, as next benefieiaries of the deceased soldier.

This suit was filed by appellee, December 12, 1932. The parents of the soldier intervened in opposition to the petition. The government answered, setting up forfeiture on the above grounds, and also lack of jurisdiction based upon the pleading that the action was barred by the statute of limitations, Jury was waived, and the court made findings of fact and stated conclusions of law, aecording recovery of installments for six years prior to filing of this suit. The United States has appealed. Appellant presents here three matters which are that the evidence estabfished the grounds of forfeiture; that the applieable statute of limitations barred the suit; and that certain evidence was improp-. erly excluded.

_ „ . „ _ .. I. Sufficiency of Evidence.

While there was direct conflict in the evidenee as to any improper cohabitation, yet there was substantial evidence upon which the eourt found that “on occasions she has had illicit relations with men other than her liusband.” However, the court found further: “That any illicit relations that the plaintiff, Eva Baty Boliman, may have had were not open and notorious, and the Court therefore finds that at no time after the death of her husband while she was drawing compensation was she guilty of open and notorious illicit cohabitation.” Another finding of the court is that appellee “has established in this court by a fair preponderance of the evidenee that at no time prior to such diseontinuance or thereafter was she guilty of open and notorious illicit cohabitation.”

The evidence permitted to be introduced abundantly sustains the above findings of the eourt. There is evidence (denied by appellee) 0f two witnesses who testified they had had repeated illicit intercourse with appellee; but their testimony was as to happenings which were hidden and secret, and there is no testimony in the ease of “open and notorious” illicit cohabitation.

For its own reasons, Congress did not see fit to base forfeiture on the bare fact of illicit intercourse alone, but expressly required ¿^at intercourse be “open and notori0US-« This latter requirement is as much a necessary element of the forfeiture as the intereourse itself. Thus, under the statute, two things were required to be proven; one of these is the fact of illicit intercourse, the other is the fact that such intercourse was open an(j notorious. The government contends that these requirements may be met by proof of repeated or continuous acts of illicit intercourse. That does not meet the requirement of the statute. For this failure in necessary proof the amply supported findings of the trial eourt as to this matter should be sustained,

Appellant relies upon King v. United States, 17 F.(2d) 61 (C. C. A. 4), and Barksdale v. United States, 4 F.Supp. 207 (D. C. W. D. S. C.). In the Barksdale Case, the Distriet Court for the Western District of South Carolina somewhat reluctantly followed the King Case as being controlling authority in the Fourth Circuit: The King Case recognized that the illicit intercourse must be “open and notorious,” and that such “open and notorious” character must be evidenced other than by mere intercourse. The holding was simply that evidence of the birth of illegitimate children is evidence of such “open and notorious” intercourse within the statute.

„ T . ., IL Statute of Limitations,

The government insists that the portion of 38 USCA § 445, providing that “Ho suit on yearly renewable term insurance shall be allowed under this section unless the same shall have been brought within six years after the right accrued for which the claim is made or within one year after July 3, 1930, whichever is the later date,” is applicable to this ease. It would seem that this provision applies direetly and solely to “yearly renewable term insuranee,” and the evidence conclusively shows that this insurance had not been changed into renewable insurance. Therefore, it may be seriously- doubted 'whether the above-quoted provision is applicable. It may be that this insurance is governed by section 41, subd. 20, title 28 TJSGA, which is the general limitations statute as to claims against the United States. However, it is not material in tbe result of this case which of these statutes governs, as each provides that actions shall bo barred after six years from the time the right of action accrued. Therefore, the really substantial controversy here is concerning the time of accrual of this action. The appellant contends that the right of action aeerued when the bureau finally determined that it would not continue further payments upon this policy and thereby a “disagreement” was reached between the bureau and appellee, The court found that date to be March 1, 1926. Appellee contended and the court found that a cause of action accrued at the time each payment became due under the law and applying the six-year limitation permitted recovery only for the installments within six years of the time of bringing this suit. •

We think it unnecessary to determine the issue as to whether the bar of the statute aplilies to all future payments or arises with ^-^rols eaeh Paymonf as it becomes due. this is so because we think the trial court and appellant here are wrong as to the date when this rejection became final and that final rejeetion was less than six years before this action was filed. It is true that on March 4, 3926, the bureau informed appellee that it had been determined she had violated the above section 22, and that her payments would be stopped. However, the record shows further communications establishing that there wore continued negotiations between claimant and the government with a view to having this action set aside, and that such negotiations were permitted by the bureau and, in a sense, participated in by it. Those communications clearly show that this effort to reopen the matter was not finally closed by the bureau until December 1,1931. We hold that so long as this order was under serious discussion in the bureau find until it finally declined to reopen the matter the order should uot be deemed final for application of limitations against suit. Obviously, it is to the interest of all parties that suits of this character be avoided. While the claimant may treat the action of the government in its order of disagreement as final, yet it may continue to discuss and contest the matter before the bureau, So long as the bureau treats or acts in a manner which would lead the claimant reasonably to believe that it is holding- the matter open, we think it would be unjust to regard it as closed by the first order. The bureau can at any time definitely terminate such proceedings by stating that it declines to reopen and that its order is final. Here the correspondenee shows that on July 15, 1931 (within the 6-year period after the order of March 4, 1926, and less than two years before this aetion was filed), attorneys for appellee were advised: “Appropriate, action. is now being taken in this matter and you will be further advised as soon as new facts develop. All future communications relative to this case-should bear the veteran’s name and refer to the number XC-105,530.” On September 9, 1933, a further communication stated that a careful review had been made of the evidence in the case and the evidence had developed grounds for forfeiture, and “consequently the previous finding of this office must stand.” Thereafter, on October 12, 1931, there was a further communication (in reply to one by the attorneys for appellee, of September 11) which stated: “You are advised that the eviderice submitted with your present communica{jon is now receiving proper consideration aild y0U j,ft communicated with relative thereto in dlle course.” It was not until Decomber 1931, fu a communication direct to appeuee, that tile bureau definitely and finaliy adhered to its ruling. It was within little more than a year thereafter that this suit was tiled. In this situation, the statute is unavailtng, not only as to the unpaid installments al]owed by tto eourt bllt as to all id in„ gtallments

HI- Admission of Evidence,

The government offered to prove by Mrs. Pearl Anderson, that she was acquainted with the reputation of appellee. The question was, “Are you acquainted with the reputation 0f the plaintiff, Eva Baty Bollman, for morality during the period of 1920 to 1924? You may answer that ‘yes’ or ‘no.’ ” To this the witness answered, “Yes.” She was then ag^d, “Is it good or bad?” to which there Was an objection as being “incompetent, ir~ relevant and immaterial.” This objection was sustained and constitutes tbe ruling hero attacked. It seems to us the court erred in rejecting this testimony, and that such rejeelion was prejudicial. The issue here was the open and notorious illicit intercourse, The government had introduced testimony as to the fact of repeated illicit intercourse, and such was found by tbe eourt. Tbe govemment was seeking by this witness to establish the open and notorious character of this illicit intercourse. It seems to us that this can best be done and, except where the acts themselves are openly and notoriously indulged in or there are illegitimate children, possibly can only be done by proving a reputation of that ■i í rm. / -i ™ charaeter. That was precisely what the ex- , n - ■ i , j, , eluded question was intended to do. Appellee argues that the prior question was merely as to “morality” and that morality is a much broader term than illicit intercourse. While the objection in the general terms of “ineompetent, irrelevant and immaterial” is broad enough to eover the matter as suggested by appellee, yet this is a somewhat technical view whieh is hardly applicable to the cireumstanees of this ease. Here, there was no issue as to any phase of morality except illicit intercourse. The minds of the parties, of the court, of counsel, and of the witness were all aimed in that direction only. There is no indieation in the objection or in the ruling that the reason for sustaining the objection was that the qualifying question was too broad. In this situation, it seems improper to ex-elude this evidence, and that such exclusion . y . 1 was preju ici .

Conclusion.

The case should be and is reversed and remanded for a new trial because of the exelu- - „ sion of this evidence.  