Ervin v. Conn
| Decision Date | 06 June 1945 |
| Docket Number | 527,528. |
| Parties | ERVIN v. CONN. COMMERCIAL NAT. BANK OF CHARLOTTE v. FREDERICKSON. |
| Court | North Carolina Supreme Court |
These two cases come here upon appeals by the respective plaintiffs from judgments of the Superior Court in Mecklenburg County, rendered upon an agreed statement of facts submitted in a controversy without action under G S. § 1-250.
The cases are similar in their main features, although the stipulations somewhat vary. They were argued together here and will be considered together in the opinion.
In No. 527, the controversy is between the Administrator of the estate of Mrs. Leona S. Reid, deceased, and Mrs. Nannie S Conn, and involves the ownership of one U. S. Savings Bond, Series D, issued in April 1941, with maturity value of $1000, registered in the names and payable as follows:
'Mrs. Leona S. Reid, 809 South Tryon Street, Charlotte, N. C., payable on death to Mrs. Nannie S. Conn, R. F. D. #2, Adairville, Ky.'
The bond was found by the plaintiff administrator in a lock box of Mrs. Leona S. Reid in her bank in Charlotte, N. C., to which box she alone had access during her lifetime. The defendant is a surviving sister of Mrs. Reid. Mrs. Reid left surviving her, also, one son, J. Cheston Woodall, as her only heir and next of kin, who is not a party to this submission.
The bond contains on its face, and as part of it, the following provision:
'This is a U. S. Savings Bond of Series D, authorized by the Second Liberty Bond Act, approved September 24, 1917, as amended, and issued pursuant to Treasury Department Circular No. 596, dated December 15, 1938, to which reference is made for a statement of the rights of holders, as fully and with the same effect as though herein set forth.'
Circular No. 596, referred to, in its turn refers to Circular No. 530, Second Revision, dated December 15, 1938, containing the regulations issued by the Treasury Department, defining the rights of the parties. A pertinent part of those regulations is as follows:
After the date of the issue of this bond, the Treasury Regulations then in force provided that such bonds could be issued in the name of one person, payable on death to a single designated beneficiary in his own right.
In No. 528, the controversy is between the executor of the will of Charles H. Frederickson, deceased, as plaintiff, and Mrs. Carolyn G. Frederickson, his surviving wife, as defendant.
Immediately after its qualification as executor, the plaintiff found in an inner box or drawer in a safe located in the office or place of business of the testator, to which both testator and defendant had equal access prior to testator's death, and took into its possession, certain U. S. Savings Bonds of Series C; U. S. Savings Bonds of Series D; U. S. Defense Savings Bonds of Series E; and U. S. Savings Bonds of Defense Series F.
The several bonds of Series C, D, and F, and all but one of Series E, as described in the submission, were issued and registered in the following names and form: 'Charles H. Frederickson or Mrs. Carolyn G. Frederickson.' One Series E. Defense Savings Bond, dated January 1943, in the maturity amount of $500, was issued and registered as follows: 'Mrs. Carolyn G. Frederickson or Charles H. Frederickson.' All of the bonds described are issued in the names of co-owners, have upon the face of each proper references to the Circulars and Treasury Regulations under which they are issued, which regulations by reference are made a part of the bond. They all have substantially the following provisions, which are quoted from the regulations applicable to Series E, issued prior to January 1, 1943:
'(2) After the Death of One Co-owner.--If either co-owner dies without having presented and surrendered the bond for payment to a Federal Reserve Bank or the Treasury Department, the surviving co-owner will be recognized by the Treasury Department as the sole and absolute owner of the bond, and payment will be made only to him:'
There are minor differences in the regulations relating to the bonds purchased from time to time which are not controversial, and which do not affect the decision.
Upon the facts as stated, the plaintiff in each case, and the respective defendants, claimed the ownership of the bonds in controversy.
In No. 527, the judgment of the court was that 'defendant is the absolute owner of and entitled to the possession of the bond described in the submission and agreed facts and that the plaintiff shall surrender and deliver the aforesaid bond to the defendant.' From this judgment plaintiff appealed, assigning errors.
In No. 528, a similar judgment was entered, adjudging that 'the defendant is the sole and absolute owner of and entitled to the possession of each, every and all of the bonds mentioned and described in the submission, and that the plaintiff surrender and deliver all of the aforesaid bonds to defendant.' Plaintiff excepted and appealed, assigning errors.
Taliaferro & Clarkson, of Charlotte, for plaintiffs, appellants.
Jones & Smathers, of Charlotte, for defendants, appellees.
If nothing else appeared, the conception of the Federal Government as creating a species of property, intended to have a situs within the state, and investing it with qualities and incidents of succession at variance with the state laws of descent and distribution, would make a disturbing picture. It would, indeed, be cause for challenge if the Congress undertook to legislature on the subject by general regulation of property rights within the field of state control. But there is no such general invasion of state governmental power or function involved in the controversy submitted to the Court. We are dealing with a special situation--the authority of the Federal Government, under its constitutional grant of power to borrow money, to regulate and adjust its contracts within the compass of that power, so that property in them may be subject to succession by survivorship, according to the terms of the contract, irrespective of the succession laws of the state generally applicable to that subject. It is the contention of the appellee in each case that the authority to make a contract with that provision and with that result is within the reasonable and necessary exercise of the constitutional power to borrow money and pledge the faith and credit of the Government for its repayment, and within the scope of the Acts of Congress, implementing the constitutional provision.
Clause 2 of Sec. 8, Art. I, of the Federal Constitution, empowers Congress to borrow money on the credit of the United States; Clause 18 empowers Congress to make necessary laws for the execution of powers vested by the Constitution in the United States Government. Pursuant thereto the Congress enacted the Second Liberty Bond Act, Sec. 22 of which, as amended, reads as follows:
Act of Sept. 24, 1917, Ch. 56, Sec. 22, as added by Act of Feb. 4, 1935, Ch. 5, Sec. 6, 49 Stat. 21, 31 U.S.C.A. § 757c.
Looking at the Constitutional grant of power and the implementing Act alone, in their independent setting, it can hardly be denied that there is a clear and indisputable line of authority from the Constitution to Congress, and a delegable power in the Congress with respect to the Treasury Regulations involved, so long as they have a reasonable relation to the ends sought to be attained by the Constitution, and are fairly within the powers actually delegated to the Secretary of the Treasury. Assuming that the Regulations are of that character, conflict with State law is immaterial. But as one of the recurring conflicts of authority, real or assumed, in our dual form of government, the appellants raise the question whether the Congress, in the details of its attempted exercise of power, has not transgressed on the reserved powers of the State.
Primarily, the possibility of conflict with state law has nothing to do with the question whether the transactions under review (referring to the contested feature of survivorship) are within the proper exercise of the constitutional power, and necessary or expedient to its exercise. Independently considered, they seem to have that logical and reasonable relation to the constitutional grant of power and the ends sought to be reached that would make the transaction impeccable.
The borrowing of money by the Government on the scale it has been carried on and is yet to be done, reaching incomprehensible billions in figures, is not a simple matter of getting a loan here and there and issuing a note of hand as an obligation to repay it. Under the Constitution, the Government might...
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