Carrier v. Bryant, 541

• Court: U.S. Supreme Court
• Writing for the Court: McREYNOLDS
• Citation: Carrier v. Bryant, 306 U.S. 545, 59 S.Ct. 707, 83 L.Ed. 976 (1939)
• Decision Date: 17 April 1939
• Docket Number: No. 541,541
• Parties: CARRIER et al. v. BRYANT

306 U.S. 545

59 S.Ct. 707

83 L.Ed. 976

CARRIER et al.

v BRYANT.

No. 541.

Argued March 27, 28, 1939.

Decided April 17, 1939.

Mr. John W. Wood, of Washington, D.C., for petitioners.

Mr. Frederick D. Hamrick, Jr., of Rutherfordton, N.C., for respondent.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

The Supreme Court, North Carolina, ruled that negotiable notes and United States bonds purchased, and held as investments, for an incompetent World War veteran by his guardian out of 'payments of benefits' authorized under laws relating to such veterans, were subject to execution upon a judgment against the incompetent. Petitioners challenge that view and claim immunity under section 3, Act August 12, 1935 (c. 510, 49 Stat. 607, 609, 38 U.S.C.A. § 454a):

'Sec. 3. Payments of benefits due or to become due shall not be assignable, and such payments made to, or on account of, a beneficiary under any of the laws relating to veterans shall be exempt from taxation, shall be exempt from the claims of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. Such provisions shall not attach to claims of the United States arising under such laws nor shall the exemption herein contained as to taxation extend to any property purchased in part or wholly out of such payments. Section 4747 of the Revised Statutes and section 22 of the World War Veterans' Act, 1924, are hereby repealed, and all other Acts inconsistent herewith are hereby modified accordingly. The provisions of this section shall not be construed to prohibit the assignment by any person, to whom converted insurance shall be payable under title III of the World War Veterans' Act, 1924, of his interest in such insurance to any other member of the permitted class of beneficiaries. * * *

'Sec. 5. That this Act shall take effect and be in force from and after its passage, but the provisions hereof shall apply to payments made heretofore under any of the Acts mentioned herein.'

The conclusion below is supported by McCurry v. Peek, 1936, 54 Ga.App. 341, 187 S.E. 854, the only other opinion squarely upon the point here involved which has been called to our attention.

The language of section three, although not entirely felicitous, conflicts with the petitioners' insistence.

The first sentence grants exemption from taxation, claims of creditors, attachment, levy or seizure under any legal process whatever. The things exempted are 'payments of benefits' due or to become due either before or after receipt by the beneficiary.

Investments purchased with money received in settlement of benefits are not such payments due or to become due. Accordingly, giving the words employed their ordinary meaning, the notes and bonds in question are not exempted by the first sentence in section three. It left them, like other property, subject to taxation, claims of creditors, and legal process.

The second sentence in the section clearly recognizes the distinction between benefit payments and property purchased with money therefrom. It declares the exemption provisions in the first sentence shall not attach to claims of the United States; also that exemption from taxation shall not extend to property purchased out of benefit payments. Nothing is said concerning claims of creditors. Nevertheless, petitioners seem to maintain, immunity from these must be inferred. But a mere declaration that investments always subject to taxation shall not enjoy exemption therefrom affords no basis for holding them free from claims of creditors. Although the first sentence extended no immunity to investments, apparently out of abundant caution, the second declared them subject to taxation.

We find nothing in the history or supposed purpose of the enactment adequate to support a construction not in accord with the ordinary import of the words employed.

Under Spicer v. Smith, 1933, 288 U.S. 430, 434, 53 S.Ct. 415, 416, 77 L.Ed. 875, 84 A.L.R. 1525, payment of benefits to the guardian vested title in the ward. The exemptions of the statute would not be different if the ward had personally received the payments.

Section 4747 Revised Statutes, Act March 3, 1873 (38 U.S.C.A. § 54) remained in force until repealed by Act August 12, 1935. It provided 'No sum of money due, or to become due, to any pensioner shall be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, whether the same remains with the Pension Office, or any officer or agent thereof, or is in course of transmission to the pensioner entitled thereto, but shall inure wholly to the benefit of such pensioner.'

This section was considered in McIntosh v. Aubrey, 1902, 185 U.S. 122, 124, 22 S.Ct. 561, 562, 46 L.Ed. 834, where it was...