State v. Blair

• Court: Tennessee Supreme Court
• Writing for the Court: Swiggart
• Citation: State v. Blair, 57 S.W.2d 455, 165 Tenn. 519 (Tenn. 1933)
• Decision Date: 14 February 1933
• Parties: STATE v. BLAIR et al.

57 S.W.2d 455

STATE v. BLAIR et al.

Supreme Court of Tennessee.

February 14, 1933.

Appeal from Chancery Court, Blount County; Ben Robertson, Chancellor.

Action by the State against Arthur Blair and others, in which J. T. Trotter, duly appointed and qualified guardian of Joseph A. Leake, deceased, intervened. From the decree, the State appeals.

Reversed and remanded.

Brown & Johnson, of Maryville, for the State.

Kramer & Kramer, of Maryville, for defendants.

SWIGGART, Justice.

This suit was instituted by the state to collect a property tax assessed and levied upon a tract of land for the year 1929. During that year title to the land was held by Joseph A. Leake, non compos mentis, either in his own name or in the name of his guardian for him.

By intervening petition, J. T. Trotter, duly appointed and qualified guardian of the said Joseph A. Leake, claimed an exemption of said land from taxation, on the ground that it was purchased, under an order of the chancery court of Blount county, for the said ward, with money paid to the guardian by the United States under the World War Veterans' Act of Congress (38 USCA § 421 et seq.).

The material facts bearing upon this claim of exemption were stipulated by counsel. The stipulation recites that Joseph A. Leake was rendered mentally incompetent as a result of his service in the World War, and has had a guardian from May, 1922, to the present time. Since May, 1922, the guardian has received from the Veterans' Bureau of the United States government for his ward the sum of $100 per month as compensation, and an additional sum of $57.50 per month as disability benefits under a policy of war risk insurance. The ward has no other property than the proceeds of these payments and the land in question. All of the purchase price of the land was paid with money received as above set out, except $1,500, the proceeds of fire insurance on a building located on the property, premiums for which insurance were paid by the guardian with money received from the United States. The record does not recite whether the title to the land was taken in the name of Trotter, as guardian, or directly in the name of the ward, but it is conceded that the ward is alone interested beneficially in the land.

The chancellor decreed that the land was not subject to the property tax levied by the state and county, and the state has appealed.

The exemption is claimed by the guardian for his ward under the provisions of the United States Code, title 38, § 454 (38 USCA § 454), which provides:

"The compensation, insurance, and maintenance and support allowance payable under parts II, III, and IV, respectively, shall not be assignable; shall not be subject to the claims of creditors of any person to whom an award is made under parts II, III, or IV; and shall be exempt from all taxation."

It is contended that the intervention of the guardianship has had the result that the payments of compensation and insurance by the United States have not yet reached the ward, but are still in the hands of the guardian as an agency of the United States government.

This question has received consideration by this court, and was determined adversely to the contentions of the guardian in the case of State v. Bank of Bristol, opinion filed on January 7, 1933, 165 Tenn. ___, 55 S.W.(2d) 771, 773. In that case Chief Justice Green, for the court, said:

"Conceding that the guardian is in a sense a government agent, he is also the agent of the beneficiary of the fund. His duties to the government consist in applying the fund for the benefit of the minor and in reporting to the government from time to time as to such application. The government does not undertake to regulate the manner of the application of such fund to the beneficiary's use. So far as the federal statutes are concerned, the guardian may spend the money directly for the beneficiary's comfort, invest the...