Hines v. Lowrey

• Decision Date: 07 November 1938
• Docket Number: No. 24,24
• Citation: 305 U.S. 85,83 L.Ed. 56,59 S.Ct. 31
• Parties: HINES, Administrator of Veterans' Affairs, v. LOWREY
• Court: U.S. Supreme Court

305 U.S. 85

59 S.Ct. 31

83 L.Ed. 56

HINES, Administrator of Veterans' Affairs,

v LOWREY.

No. 24.

Argued Oct. 19, 1938.

Decided Nov. 7, 1938.

Messrs. Edward E. Odom and James T. Brady, both of Washington, D.C., for petitioner.

Messrs. Wm. Dike Reed and Louis J. Altkrug, both of New York City, for respondent.

Mr. Justice BLACK delivered the opinion of the Court.

Section 500 of the World War Veterans' Act¹ (as applicable here) prohibits the recognition of attorneys or claim agents in the presentation or adjudication of veterans' War Risk Insurance claims; limits to ten dollars the payment for assisting in the preparation and execution of an application to the Veterans' Bureau; permits a court—rendering a favorable judgment or decree on a veteran's claim—to allow the veteran's attorney a fee not to exceed ten per cent of the amount recovered; and makes soliciting or obtaining any fee greater than the statute provides a crime subject to a maximum punishment of a $500 fine and two years imprisonment.

A committee (guardian appointed by a New York state court) for an insane veteran retained an attorney to prosecute the rights of the incompetent on a War Risk Insurance contract. The New York court was petitioned for an attorney's fee of $3,000. Upon hearing, it appeared that the attorney had performed services of an investiga- tional and preparatory nature in the prosecution of the veteran's claim; that contrary to Section 500, he had been recognized by the Bureau and permitted to join with a representative of the Disabled War Veterans in presenting the claim to the Bureau; and that subsequently, but without litigation, judicial decree or judgment against the government, the government paid the guardian an amount in excess of $10,000 on the claim. The New York court allowed a fee of $1,500 for the attorney's services, over the objection of the Administrator of Veterans' Affairs who intervened and insisted that Section 500 prohibited any fee in excess of $10 in this case.² We can assume, in the consideration of questions here presented, that valuable services were rendered by the attorney.

Respondent seeks to sustain the $1,500 fee upon the theory that the general power of the New York court to fix fees for services rendered an incompetent under that court's jurisdiction is not subject to the limitation of $10 for fees as provided in Section 500. He urges that the present case is controlled by the decision in Hines v. Stein, 298 U.S. 94, 56 S.Ct. 699, 80 L.Ed. 1063. In that case the Court said (page 701), 'Nothing brought to our attention would justify the view that Congress intended to deprive state courts of their usual authority over fiduciaries, or to sanction the promulgation of rules to that end by executive offices or bureaus.' This language did not refer to Section 500, which we now consider, but was a construction and interpretation of rules promulgated by the Administrator of Veterans' Affairs under authority of §§ 4 and 7 of an Act of March 20, 1933, c. 3, 48 Stat. 9, which rules were traceable to §§ 111, 114 and 115, Title 38, U.S.C., 38 U.S.C.A. §§ 111, 114 and 115. These Code Sections are based upon an Act passed in 1884.

Obviously, the interpretation given rules promulgated in furtherance of a line of legislation dating from 1884 cannot be accepted as controlling in determining the intent and effect of a separate and distinct act (Section 500) differing in form, substance and historical background. The rules and statutes construed in Hines v. Stein, supra, have no bearing on this case, which must be determined by the application of Section 500.

Section 500 is one in a series of congressional efforts to limit fees of claim agents and attorneys in the prosecution of veterans' insurance and related claims. Shortly after the United States entered the World War, Congress provided a comprehensive statutory plan of War Risk Insurance for soldiers and sailors.³ Section 13 of that statute contained this provision: 'The director shall adopt reasonable and proper rules * * *, to regulate the matter of the compensation, if any, but in no case to exceed ten per centum, to be paid to claim agents and attorneys for services in connection with' collection of soldiers' and sailors' benefits.

May 20, 1918, Congress amended Section 13 of the 1917 Act.⁴ The House report shows that this amendment was strongly urged by the Secretary of the Treasury, then administering the World War Veterans' Act.⁵ The 1918 amendment is substantially the same as Section 500, and in a case involving the meaning of that amendment this Court said, 'Petitioner claims that the inhibition against receiving any sum greater than $3 ($10 under Section 500) relates solely to the clerical work of filling out the form or affidavit of claim and does not apply to useful investigation and preparatory work such as he did. * * *

'We find no reason which would justify disregard of the plain language of the section under consideration. It declares that any person who receives a fee or compensation in respect of a claim under the act except as therein provided, shall be deemed guilty of a misdemeanor. The only compensation which it permits a claim agent or attorney to receive where no legal proceeding has been commenced is $3 for assistance in preparation and execution of necessary papers; and the history of the enactment indicates plainly enough that Congress did not fail to choose apt language to express its purpose.'⁶ (Italics supplied.)

In 1926, Congress enacted additional legislation for the specific protection of incompetent veterans from illegal or excessive fees where guardians had been appointed by any court State or Federal.⁷ Congress declared that 'whenever it appears that any guardian, curator, conservator or other person, in the opinion of the Administrator, is not properly executing or has not properly executed the duties of his trust or has collected or paid, or is attempting to collect or pay, fees, commissions, or allowances that are inequitable or in excess of those allowed by law for the duties performed * * *, then and in that event the Administrator is empowered by his duly authorized attorney to appear in the court which has appointed such fiduciary, * * * and make proper presentation of such matters * * *.'⁸ (Italics supplied.)

The history of Section 500 manifests beyond doubt the clear establishment of a public policy against the payment of fees for prosecution of veterans' claims in excess of those fixed by statute. Collection of a greater fee than that fixed in the statute is made a crime, and this Court has sustained a conviction under the statute.⁹ Contracts for the collection of fees in excess of valid statutory limitations and for services validly prohibited by statute cannot stand, whether made with a competent veteran or the guardian of an incompetent veteran. Nor can any court having jurisdiction over an incompetent award a fee in violation of a valid statute. Congress clearly intended to protect all veterans, competent and incompetent, in all courts, State and Federal, against the imposition or payment of fees in excess of the amount fixed by statute. In furtherance of this policy the Administrator of Veterans' Affairs was charged with the express duty of appearing in all courts where it appears that 'any guardian * * * or other person * * * is attempting to collect fees * * * in excess of those allowed by law.' The progressive strengthening of this particular legislative policy precludes any probability that Congress intended to exempt mental incompetents from its protection, and Congress alone is vested with constitutional power to determine the wisdom of this policy.

Congre...