State ex rel. Nielson v. Lindstrom

• Decision Date: 01 April 1948
• Docket Number: 7403
• Citation: 191 P.2d 1009,68 Idaho 226
• Parties: STATE ex rel. NIELSON et al. v. LINDSTROM
• Court: Idaho Supreme Court

191 P.2d 1009

68 Idaho 226

STATE ex rel. NIELSON et al. v. LINDSTROM

No. 7403

Supreme Court of Idaho

April 1, 1948

Appeal from District Court, Second Judicial District; Clearwater County; A. L. Morgan, Judge.

Reversed with direction.

Robert E. Smylie, Atty. Gen., and John A. Carver, Jr., J. R. Smead and Robert B. Holden, Asst. Attys. Gen., for appellants.

State laws providing for such recoveries appear to be contemplated by the federal statute. 42 U.S.C.A. § 303(b) (2) (B), 53 Stat. 1361, (1939).

The power of state legislatures is plenary in the matter of succession to property by will or inheritance. The right is created by the Legislature, which may at any time abolish it. Bankers Trust Company v. Blodgett, 1922, 260 U.S 647, 43 S.Ct. 233, 67 L.Ed. 439; State v. Mollier, 1915, 96 Kan. 514, 152 P. 771, 773, L.R.A.1916C, 551; In re Bevilacqua's Estate, 1945, Cal.App., 161 P.2d 589.

Recovery provisions are creatures of statute. As such, they have been generally upheld. State v. Whitver, 1942, 71 N.D 664, 3 N.W.2d 457; Hawkins v. Kansas Social Welfare Board, 1938, 148 Kan. 760, 84 P.2d 930; Department of Social Welfare v. Wingo, 1946, 77 Cal.App.2d 316, 175 P.2d 262.

The Constitution of the State of Idaho prohibits the loan of the credit of the state to private individuals or corporations. Const., Art. VIII, sec. 2; Const., Art. VIII, sec. 4; Const., Art. XII, sec. 4.

The prohibition of these constitutional provisions is primarily directed against the combination of public funds or credit with the capital of private persons, corporate or natural. The activities held prohibited have generally involved the element of enterprise, or profit-making private schemes. Atkinson v. Board of Commissioners of Ada County, 1910, 18 Idaho 282, 108 P. 1046, 28 L.R.A.,N.S., 412; School District No. 8 v. Twin Falls County Mutual Fire Insurance Company, 1917, 30 Idaho 400, 164 P. 1174.

The term "loan" in the cited constitutional provisions has been construed to mean a transaction which creates the customary relation of lender and borrower. Bannock County v. Citizen's Bank and Trust Company, 1933, 53 Idaho 159, 22 P.2d 674.

The above cited constitutional provisions have been held to be a bar to actions of the State and other political subdivisions only when faith or credit is pledged. Independent School District No. 6 v. Common School District No. 38, 1942, 64 Idaho 303, 131 P.2d 786; Hansen v. Independent School District No. 1, 1939, 61 Idaho 109, 98 P.2d 959; School District No. 8 v. Twin Falls County Mutual Fire Insurance Company, supra.

Samuel F. Swayne, of Orofino, for respondent.

There can be no recovery of money paid for old age assistance under the common law. City of Worcester v. Quinn, 304 Mass. 276, 23 N.E.2d 463, 125 A.L.R. 707.

Without statutory authority there can be no recovery of money paid for old age assistance or relief. In re Humphries' Will, 125 Misc. 62, 210 N.Y.S. 253.

The loan of the State's credit is prohibited to or in aid of any individual. Atkinson v. Board of County Commissioners, 18 Idaho 282, 108 P. 1046, 28 L.R.A.,N.S., 412; McDonald v. Doust, 11 Idaho 14, 81 P. 60, 69 L.R.A. 220; White v. Pioneer Bank & T. Co., 50 Idaho 589, 298 P. 933.

The making of payments upon application for old age assistance under the statutes, coupled with the provisions for repayment and restrictions as to transfer of property, is contractual relationship. Const. Art. VIII, Sec. 2; Hawkins v. State of Kansas, Social Welfare Board, 148 Kan. 760, 84 P.2d 930; In re Beningaso's Estate, 165 Misc. 459, 300 N.Y.S. 951; In re Black's Estate, 150 Misc. 433, 269 N.Y.S. 511; In the Matter of Katie Long, 242 A.D. 781, 274 N.Y.S. 427.

The mere acceptance of old age assistance does not give the State the right to recover the payments. In re Humphries' Will, 125 Misc. 62, 210 N.Y.S. 253.

Sutphen, District Judge. Givens, C. J., Holden, J., and McDougall, D. J., concur. Miller, Justice, dissenting.

OPINION

Sutphen, District Judge.

The State of Idaho, on relation of its State Auditor and Commissioner of the Department of Public Assistance, brought this action against the executor of the estate of Frans G. Magnus, deceased, to recover amounts paid in old-age assistance to decedent during his lifetime and does not involve in the slightest what should be taken into consideration in the initial award of old-age assistance; therefore, authorities involving such questions are not in point herein.

The complaint, in brief, sets forth: that Frans G. Magnus during his lifetime made application for and was granted old-age assistance; that commencing in March 1943 the Department of Public Assistance paid him, in monthly installments each month to and including july 1946, the sum total of $ 1,651; that Frans G. Magnus died testate August 1, 1946, leaving an estate; that respondent was duly appointed and qualified as executor of the estate; that appellant duly filed claim with the executor for the amount of assistance paid; that the executor rejected the claim, and this suit properly ensued as provided by section 15-609, I. C. A. Idaho Trust Co. v. Miller, 16 Idaho 308, 102 P. 360.

The trial court sustained respondent's demurrer to the complaint and dismissed the action apparently accepting respondent's contention that the alleged transactions between the State and deceased amounted to a loan and that such a loan is unenforceable because repugnant to the inhibition contained in Section 2 of Article 8 of the Constitution of this State that: "* * * the credit of the state shall not, in any manner, be given, or loaned to, or in aid of any individual, asociation, municipality or corporation."

Under the common law no recovery of money paid by the State for old-age assistance was allowable where payment was not made by accident, fraud or mistake. City of Worcester v. Quinn, 304 Mass. 276, 23 N.E.2d 463, 125 A.L.R. 707. Thus, any right the appellant may have to recover in this action must be based upon our statutes.

Provision, however, for recovery against the estates of recipients has been part of the law of this State continuously since March 2, 1943, when Chapter 119 of the Laws of 1943 became effective. Section 2 of such Act added Section 24-a to the Public Assistance Law of the State and read as follows: "Section 24-a. Recovery from recipients. On the death of any recipient, the total amount of assistance paid or relief granted under this Act shall be allowed as a preferred claim against the estate of such person and shall be subject only to the expense of the last illness, funeral expenses not to exceed $ 100.00, and expenses of administration of said estate. No claim shall be enforced against any real estate or personal property of a recipient while such real estate is occupied by the recipient, a surviving spouse, or a dependent, but the Statute of Limitations shall not begin to run against such claim so long as the collection thereof is prohibited, as hereinabove provided. "Such claim shall be made by the county or, in cases of cooperative assitance, by the State on behalf of all participants contributing to such assistance." Chapter 119, 1943 S.L.

By an Act (Chapter 237, S.L.1947) the 1947 legislature repealed the above quoted section and in lieu thereof enacted the following provision for recovery from estates of recipients: "Section 24-a. Recovery From Estates. On the death of any recipient of old-age assistance, the total amount of assistance paid such recipeint under this act may, in the discretion of the State Department, be allowed as a claim against the estate of such person after reasonable funeral expenses, the expenses of the last illness, and the expenses of administering the estate have been paid. No claim shall be imposed against any real estate of the recipient while it is occupied as a home by a surviving spouse, or against any personal property of less that $ 100.00 in value. The State Department shall certify to the State Auditor the amount recovered from each estate as above provided, and a proper distribution thereof shall be made by the State Auditor in proportion to the amount of assistance contributed by the state and the federal government for such assistance." Chapter 237, 1947 Session Laws.

Thus, in view of the statute, the question before us is whether the granting of old-age assistance under the terms and conditions of our Public Assistance Law (S.L. 1941, Chap. 181; S.L.1943, Chap 119; S.L. 1945, Chap. 109; S.L.1947, Chap. 237) falls within the inhibitions of Section 2 of Article 8 of the Constitution of the State of Idaho.

It is insisted an action cannot be maintained against the estate of a deceased recipient for the recovery of the amount of assistance granted such recipient during his lifetime. Old-age assistance began in August, 1935, by the enactment by Congress of the Social Security Act, Title I, Chap. 531, Act of August 14, 1935, 49 U.S.Stat. at Large, p. 620, 42 U.S.C.A. § 301 et seq. Section 2 provided for old-age assistance. Paragraph (7) of Subdivision (a) -- a part of Section 2 of the Social Security Act -- read: "(7) Provide that, if the State or any of its political subdivisions collects from the estate of any recipient of old-age assistance any amount with respect to old-age assistance furnished him under the plan, one-half of the net amount so collected shall be promptly paid to the United States."

It will be noted paragraph (7) did not make it mandatory upon a state or any political subdivision of a state to collect anything whatsoever from the estate of any recipient of old-age assistance. That paragraph simply provided that if a state did collect from the estate of a recipient of old-age assistance, then and in such case, one-half of the net amount collected should...