Cruce v. Arkansas State Hospital

• Court: Arkansas Supreme Court
• Writing for the Court: HARRIS
• Citation: Cruce v. Arkansas State Hospital, 409 S.W.2d 342, 241 Ark. 680 (Ark. 1966)
• Decision Date: 19 December 1966
• Docket Number: No. 5--4068,5--4068
• Parties: Mrs. Eleanor CRUCE, Guardian, Appellant, v. ARKANSAS STATE HOSPITAL, Appellee.

Page 342

409 S.W.2d 342

241 Ark. 680

Mrs. Eleanor CRUCE, Guardian, Appellant, v. ARKANSAS STATE HOSPITAL, Appellee.

No. 5--4068.

Supreme Court of Arkansas.

Dec. 19, 1966.

James A. Ross and James A. Ross, Jr., Monticello, for appellant.

Clifton Bond, Monticello, and Pope, Pratt, Shamburger, Buffalo & Ryan, Little Rock, for appellee.

HARRIS, Chief Justice.

This appeal relates to the validity of claims filed by the Arkansas State Hospital against the estate of Mrs. Hattie Martin, incompetent. Corporal Alex Martin, a native of Drew County, Arkansas, was serving with the armed forces when the Japanese invasion of the Philippine Islands occurred. Martin was captured in the islands by the Japanese, and died in a prison camp on November 22, 1942. He was the son of D. G. Martin, who died about 1930, and Mrs. Hattie Martin, who is an incompetent ward at the Arkansas State Hospital, having been confined there since about 1933. Corporal Martin was unmarried, had no children, and was survived by the mother and one brother, Elgin, a resident of Drew County. Several persons have served as guardians for Mr. Martin, and the current guardian, Mrs. Eleanor Cruce, was appointed on June 16, 1958. In 1962, appellant's attorney, James Ross, undertook the recovery of monies believed to have been deposited by Alex Martin at the Albuquerque National Bank in Albuquerque, New Mexico. After correspondence and the filing of necessary papers, Mrs. Cruce, as guardian of Mrs. Martin, was forwarded a check in the sum of $1,450.00, representing the bank account of Alex Martin. In 1963, the guardian applied to the Veterans Administration for benefits that might be due by reason of Corporal Martin's military service, and awards were subsequently made as hereinafter set out.

In 1942, Public Law 667 of the 77th Congress, 56 Stat. 657 was passed, amending the National Service Life Insurance Act (NSLIA) as follows:

'(B) Any person in the active service who on or after December 7, 1941, and prior to April 20, 1942, has been or shall be captured, besieged, or otherwise isolated by the forces of an enemy of the United States for a period of at least thirty consecutive days and extending beyond April 19, 1942, and at the time of such capture, siege, or isolation by the enemy did not have in force insurance in the aggregate amount of at least $5,000 under the War Risk Insurance Act, as amended, the World War Veterans' Act, as amended, or this Act, shall be deemed to have applied for and to have been granted, effective as of the date of such capture, siege, or isolation, National Service Life Insurance in an amount which together with any such insurance then in force shall aggregate 5,000 of insurance, and such insurance shall remain in force and premiums on such insurance shall be waived during the period while such person remains so captured, besieged, or isolated, and for six months thereafter:'

Under the present provisions of the NSLIA ¹ Mrs. Cruce, as guardian of Mrs. Martin, received in August, 1964, the sum of $7,347.15 from the Veterans Administration. This lump sum payment was made to take care of all back payments due under Public Law 667, and represented the sum of $28.15 per month from the date of the death of Corporal Martin. ² An award was also made by the Veterans Administration to Mrs. Martin of $75.00 per month, because she was a dependent of the deceased veteran, and the monthly payments under this award commenced on March 1, 1964.

In the meantime, the Arkansas State Hospital had started, on September 25, 1955, filing claims with the guardian of the estate of Hattie Martin for maintenance. On this date claims were filed for maintenance at the rate of $50.00 per month from September 1, 1955, to March 1, 1958, for a total of $1,500.00, and at the rate of $90.00 per month from March 1, 1958, to September 1, 1958, for the sum of $540.00, or a total claim of $2,040.00. A second claim was filed against the estate at the rate of $90.00 per month from September 1, 1958, to January 1, 1963, for a sum of $4,590.00, and a third claim was filed covering the period from January 1, 1963, to January 1, 1965, in the amount of $2,160.00. The total bill claimed against the estate is $8,790.00. After several separate hearings, the court held that the estate was liable to the hospital for claims filed from March 1, 1958, and allowed amounts totaling $6,750.00. From the judgment so entered, appellant brings this appeal. Appellee cross-appeals from the court's failure to allow the full amount sought. Several points are urged by appellant for reversal, and we proceed to discuss these alleged errors, though not necessarily in the order listed.

It is asserted that the hospital claim is barred by the statute of limitations, but we have held to the contrary. See Alcorn v. Arkansas State Hospital, 236 Ark. 665, 367 S.W.2d 737. It is further contended that appellee did not comply with Ark.Stat.Ann. § 59--230 (1947). Pertinent portions of that section provide as follows:

'If any patient admitted to the State Hospital be found, upon examination, to possess an estate, over and above all indebtedness, more than sufficient for the support of his or her dependents, his or her natural or legally appointed guardian shall pay out of such estate into the office of the business manager of the State Hospital, in advance, an amount equal to one (1) month's maintenance, at a rate to be fixed by the Board of Control (State Hospital Board) from time to time on the basis of maintenance costs, and in addition, shall supply the patient with sufficient and suitable clothing, and shall remove said patient when so required and notified by the Superintendent. If the patient remains in the State Hospital more than one (1) month, such payments shall be made, monthly in advance, for the whole period during which the patient remains in the State Hospital. If the patient has no such estate of his own, then his obligation shall exist against any person who is legally bound to support such patient. * * *

'The business manager, following the admission of a patient into the State Hospital, shall make an investigation to determine the extent of the estate, if any, owned by the incompetent patient, and whether he has a duly appointed and acting guardian to protect his property and his property interest. The business manager shall also make an investigation to determine whether the patient has any relative or relatives legally responsible for the payment of maintenance, and shall ascertain the financial condition of such relative or relatives to determine whether in each case such relative or relatives are in fact financially able to pay such charges. All reports in connection with such investigations, together with the findings of the business manager, shall be kept in the Business Office and may be inspected by interested relatives, their agents, or representatives, at any time upon application.'

Appellant cites the case of Arkansas State Hospital for Nervous Diseases v. Kestle, 236 Ark. 5, 364 S.W.2d 804, in support of her argument that an investigation is required prior to any liability. That case, as well as Alcorn v. Arkansas State Hospital, supra, only dealt with procedure where a patient had no estate of his own, and recovery was sought against persons having the legal obligation of support. The section seems to primarily relate to the duty of the business manager of the hospital to make an investigation as a matter of determining if the patient is able to pay for his or her maintenance in advance. Of course, the requirement that reports in connection with investigations be filed in the business office for the inspection of interested relatives is for the benefit of a guardian or person responsible for the maintenance of the patient who might dispute that the estate (or relative) had sufficient monies to provide maintenance for the patient. The report would enable such a person to determine where the hospital received its information, and to point out any discrepancies or errors in the report. In the case before us, though filing claims, the State Hospital never made any effort to enforce payment against either the estate or relative, so no one has been prejudiced by the failure to file reports back in the 1950's. Undoubtedly, the business manager of the hospital did not push the matter of enforcement during that period, because he knew the estate did not possess the requisite amount of funds. For that matter, an investigation was conducted in 1958, for a letter appears in the record wherein the hospital inquired of the guardian of Mrs. Martin, as to the financial status of the estate. The statute referred to, of course, does not negate the liability of the estate. It might also be mentioned that, following our holding in Arkansas State Hospital for Nervous Diseases v. Kestle, supra, the General Assembly of the State of Arkansas enacted Act No. 266 of the Acts of 1963 (Ark.Stat.Ann. § 59--230.2 (Supp.1965)), which appears to have nullified at least a part of that opinion. We find no merit in this contention.

The main issue is whether the money received under the NSLIA is exempt from seizure under judicial process by reason of our own statute, Ark.Stat.Ann. § 30--208 (Repl.1962), the pertinent portions of which provide as follows:

'All moneys paid or payable to any resident of this state as the insured or beneficiary designated under any insurance policy or policies providing for the payment of life, sick, accident and/or disability benefits shall be exempt from liability or seizure under judicial process of any court, and shall not be subjected to the payment of any debt by contract or otherwise by any writ, order, judgment, or decree of any court * * *.'

Appellant asserts that the money obtained under the NSLIA is exempt from claim or debt, because it is derived from insurance, while appellee just as stoutly contends that the proceeds were not paid under an 'insurance...