Todd's Estate, In re
| Decision Date | 28 July 1952 |
| Docket Number | No. 48078,48078 |
| Citation | 54 N.W.2d 521,243 Iowa 930 |
| Parties | In re TODD'S ESTATE. |
| Court | Iowa Supreme Court |
Clyde E. Herring, John E. Sarbaugh, of Des Moines, for appellant.
Henry T. McKnight, Des Moines, for appellee.
Lucy A. Todd, of Des Moines, Iowa, died at Charinda, Iowa, May 27, 1950. She was the widow of a Spanish American War veteran and as such drew a pension following his death. The pension was paid regularly thereafter. Some years before her death she became insane and was placed under guardianship and was taken to the State Hospital at Clarinda. Thereafter the expense of her care and keep were paid by Polk County, Iowa. After her death her estate was opened in Polk County and an administratrix appointed. At the time of the death of Mrs. Todd the guardian had on hand the sum of $1376.11, all proceeds of her pension. The guardianship was closed and this sum was turned over to the administratrix. Polk County made a claim against her estate for expenses paid for such care and keep. The administratrix resisted such claim on the ground that such sum having been received from her pension was exempt from the claims of creditors. She filed a final report showing payment of all claims except that of Polk County for the expense of decedent at said hospital. Polk County objected to said final report and asked that its claim be allowed. The trial court sustained such resistance holding the funds not liable for such claim. Polk County has appealed.
According to the records Lucy A. Todd, after being adjudicated an insane person was taken to the Clarinda State Hospital on March 28, 1947 and remained there until her death on May 27, 1950. During the period of her guardianship Polk County paid her expenses while so confined and on December 29, 1949, filed a claim in the guardianship for expenses already paid by said county and also for current future expenses. This claim was resisted by the Veteran's Administration on the grounds that the guardianship funds were exempt from creditor's claims on account of being derived from United States pension.
After hearing upon said claim the court ordered the guardian to pay to Polk County the current needs of the ward while in Clarinda, starting July 1, 1949, and thereafter whenever demand was made therefor by Polk County.
On June 21, 1951, the administratrix filed a final report in the estate which showed that all of the heirs of Lucy A. Todd were collateral. Said report failed to show that she had anyone dependent upon her. It further showed that there had been received from said guardian from the Veteran's Administration a sum total of $1376.11; that there had been paid out by the administratrix as estate expenses $505.08, leaving a balance on hand of $871.03. She asked that certain sums be allowed for attorney fees and costs of administration and that any balance remaining be distributed to the heirs at law of Lucy A. Todd, and that thereafter the administratrix be discharged and the estate closed. Polk County objected to the final report and again asked for allowance of its claim. Its denial is the basis of this appeal.
1. The question here involved is whether or not, under the Federal Statutes, the funds in the hands of the administratrix are exempt from the claims of the creditors of Lucy A. Todd, and particularly of Polk County, the claimant herein.
Both parties in brief and argument state that the only issue in the case is:
'Did Congress in enacting Section 454a, Chapter 10, Title 38, U.S.C.A., exempt the proceeds from a Federal Government pension paid to a widow of a Spanish American War Veteran, from the claims of her creditors after her death while the proceeds are in her estate?'
The applicable parts of 38 U.S.C.A. § 454a are as follows:
Prior to the enactment of Sec. 454a there was in the Statutes of the U. S. what was designated 'World War Veterans' Act, 1924' (Sec. 454) the applicable part being as follows:
'The provisions of this section shall not be construed to prohibit the assignment by any person to whom converted insurance shall be payable under Part III of this chapter of his interest in such insurance to any other member of the permitted class of beneficiaries.'
In providing for pensions for veterans of the Spanish American War Congress enacted 38 U.S.C.A. § 364a, to persons in order of precedence to the unmarried widow, and in some cases to the minor and disabled children, and the dependent parents of a deceased veteran regardless of the cause of the death of the veteran, but to no other persons. (Italics supplied).
When Sec. 454a above set forth was enacted there was in the statutes of the U. S (Revised Statutes) Sec. 4747, 38 U.S.C.A. § 54, which is as follows: 'No sum of money due, or to become due, * * * shall be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, whether the same remains with the Pension-Office, or any officer or agent thereof, or is in course of transmission to the pensioner entitled thereto, but shall inure wholly to the benefit of such pensioner.'
In the case of Appanoose County v. Carson, 210 Iowa 801, 229 N.W. 152, the court had before it the question of the exemption from seizure of the proceeds of pension money. After quoting the above statute, (Sec. 4747 Revised U.S. Statutes) the Iowa court in support of its holding that the pension was for the benefit of the veteran quoted from the case of McIntosh v. Aubrey, 185 U.S. 122, 22 S.Ct. 561, 563, 46 L.Ed. 834, wherein the U. S. Court, speaking of such section, held that pension funds in the hands of an administrator of the estate of such pensioner within the terms of the statute were not funds to 'become due' nor were they 'in the course of transmission'. That they were in the hands of the representative in the estate and were the proceeds of sums paid for the personal benefit of the pensioner. The Iowa opinion then said [210 Iowa 801, 229 N.W. 154]: 'It would be doing violence to the obvious language and plain meaning of the statute to hold that, after the decease of the pensioner and after the funds had been delivered to the administrator, they were then being held by the administrator 'in the course of transmission to the pensioner.''
The opinion in Appanoose County v. Carson, supra, proceeded to consider the act of March 2, 1895 (28 Statutes at Large 964) dealing with pensions accrued at the death of the pensioner holding such funds to be exempt from claims of creditors, etc., and should not be considered a part of the estate, nor be liable for his debts, but should inure for the benefit of the widow or children.
In the case of Tama County v. Kepler, 187 Iowa 34, 173 N.W. 912, said section was considered. It appeared that the pensioner had been adjudged insane, had been confined to a hospital and the county had expended money for his care and support. The pensioner died intestate leaving no spouse or direct heirs. There had been a guardian and at the death of the pensioner the guardian was appointed administrator. This court held that the funds on hand, being in the hands of the guardian were not part of the pensioner's estate.
In Appanoose County v. Carson, supra, the court reexamined the holding in Tama County v. Kepler, supra, and held that 'accrued funds' as the term was used in the statute meant funds in the hands of the guardian were not a part of the pensioner's estate and were not liable to creditors. In so doing the opinion in Appanoose County v. Carson stated: 'Notwithstanding the pronouncement in the Tama County Case, we are now of the opinion that the said statute has no application whatever to pension funds that have wholly accrued during the life of the pensioner and have been in fact paid into the hands of the guardian of said pensioner during the pensioner's lifetime, and have been allowed to accumulate in his hands and have subsequently been turned over to the administrator of the pensioner's estate. We think there is a clear distinction between 'accrued pensions' under said act of Congress, and accumulated or amassed pension funds which have been paid in full to the pensioner or his guardian and have been allowed to accumulate, collect, or amass in his hands, and have been turned over to the administrator of the pensioner's estate.'
Further the court said: 'We are constrained to hold that our conclusion in the Tama County Case, applying the rule with respect to the funds of a pensioner in the hands of a guardian to the funds of a deceased pensioner in the hands of his administrator, was erroneous, and it must be and is overruled.'
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