Warpouske's Estate, In re

• Decision Date: 18 May 1960
• Parties: Matter of the ESTATE of Adam B. WARPOUSKE, Deceased. PORTLAND TRUST AND SAVINGS BANK, Administrator of the Estate of Adam B. Warpouske, deceased, Respondent, State of Oregon, acting by and through the State Land Board, Respondent, v. UNITED STATES of America, as Trustee for the sole Use and Benefit of the GENERAL POST FUND, Appellant.
• Court: Oregon Supreme Court

Page 539

352 P.2d 539

222 Or. 40

Matter of the ESTATE of Adam B. WARPOUSKE, Deceased.

PORTLAND TRUST AND SAVINGS BANK, Administrator of the Estate

of Adam B. Warpouske, deceased, Respondent, State of Oregon, acting by and through the State Land Board, Respondent, v. UNITED STATES of America, as Trustee for the sole Use and Benefit of the GENERAL POST FUND, Appellant.

Supreme Court of Oregon, Department 2.

Argued and Submitted April 13, 1960.

Decided May 18, 1960.

Alan S. Rosenthal, Washington, D. C., argued the cause for appellant. With him on the brief were George Cochran Doub, Asst. Atty. Gen., C. E. Luckey, U. S. Atty., Portland, and Robert Wang, Washington, D. C.

Catherine Zorn, Asst. Atty. Gen., argued the cause for respondent. With her on the brief was Robert Y. Thornton, Atty. Gen.

Before McALLISTER, C. J., and WARNER, O'CONNELL and DUNCAN, JJ.

WARNER, Justice.

This is an appeal by the United States from a decree of the circuit court for Multnomah county, department of probate, escheating to the state of Oregon for the benefit of the common school fund that portion of the estate of Adam B. Warpouske received by him from the estate of his deceased brother. The United States claims said fund pursuant to a federal act hereinafter referred to, in its capacity as trustee, for the sole use and benefit of the General Post Fund, a trust created by that act.

The federal government's position here is predicated solely upon the provisions of 38 U.S.C.A. §§ 17-17j, ¹ hereinafter referred to as the 'Act of 1941.' The pertinent sections read:

' § 17. Vesting of undisposed personalty in United States as trustee for General Post Fund

'Effective ninety days after December 26, 1941, whenever any veteran (admitted as a veteran) shall die while a member or patient in any facility, or any hospital while being furnished care or treatment therein by the Veterans' Administration, and shall not leave surviving him any spouse, next of kin, or heirs entitled, under the laws of his domicile, to his personal property as to which he dies intestate, all such property, including money and choses in action, owned by said decedent at the time of death and not disposed of by will or otherwise, shall immediately vest in and become the property of the United States as trustee for the sole use and benefit of the General Post Fund, a trust fund prescribed by section 725s(b)(45) of Title 31.

'The foregoing provisions are conditions precedent to the initial, and also to the further furnishing of care or treatment by the Veterans' Administration in a facility or hospital. The acceptance of care or treatment by any veteran admitted as such to any Veterans' Administration facility or hospital after ninety days from December 26, 1941, and as well the continued acceptance of care or treatment furnished by the Veterans' Administration after said ninety days by any veteran who is then receiving the same shall constitute an acceptance of the provisions and conditions of this subchapter and have the effect of an assignment, effective at his death, of such assets in accordance with and subject to the terms and provisions of this subchapter and the regulations issued in accordance with and pursuant thereto. * * *

' § 17a. Presumption from death in facility of contract for disposition of property

'The fact of death of the veteran (admitted as such) in a facility or hospital, while being furnished care or treatment therein by the Veterans' Administration, leaving no spouse, next of kin, or heirs, shall give rise to a conclusive presumption of a valid contract for the disposition in accordance with this subchapter, but subject to its conditions, of all property described in section 17 of this title owned by said decedent at death and as to which he dies intestate. * * *

* * *

* * *

' § 17g. Notice to veterans of law

'The Administrator of Veterans' Affairs shall prescribe a form of application for hospital treatment and domiciliary care which shall include notice of the provisions of this subchapter. Within ninety days after approval hereof similar notice shall be given to each veteran then receiving care in any facility or hospital as described in this subchapter: Provided, however, That this requirement shall be met by posting of said notice with a copy of the prescribed form in a prominent place in each building wherein patients or members are housed. * * *'

The foregoing act was preceded by the Act of June 25, 1910, c. 384, which was amended by Act of December 26, 1941, c. 634, thus giving it its present form. In discussing certain decisions which follow, we will refer to the earlier version as the Act of 1910.

The facts are not in dispute. On December 31, 1955, Warpouske, a veteran of World War I, was admitted to Good Samaritan Hospital, in Portland, Oregon, for treatment of a hip fracture and cerebral hemorrhage. Five days later, he was moved to the Multnomah County Hospital for treatment at the expense of the county. There he remained until March 1, 1956, when he was transferred to the U. S. Veterans Hospital, Marquam Hill, Portland, Oregon.

While in the county hospital, his mental condition varied from comatose to semicomatose and he was at all times lethargic and mentally confused. The testimony of one of the doctors of the county hospital was to the effect that Warpouske probably did not know where he was and in all probability did not even know he had been transferred. Indeed, the United States concedes that on March 1, 1956, by reason of his serious mental condition, he could not handle his own affairs. It also produced records of the Veterans Administration showing, as early as 1924, a long history of mental deficiency predating his last illness beginning in December, 1955. A diagnosis made by that facility in 1933 revealed a condition of dementia praecox as early as 1924, and concluded he was insane as of that date and probably before.

His treatment at the Veterans Hospital from the date of his entry, March 1, 1956, to the date of his death, March 19, 1956, reflects no change in his physical or mental condition. There is no evidence of or suggestion by the United States that the decedent during that period was even momentarily mentally competent to negotiate a contract or make a testamentary disposition of his property.

Dying as he did intestate and without known heirs, his estate will escheat to the state of Oregon unless it appears that the federal government has a superior right thereto under the sections of the Congressional Act of 1941, supra.

There is no record indicating who made the decision for the transfer. Certainly, the veteran had no capacity to do so nor did he then have a guardian or relatives to act in his behalf. His presence in the Veterans Hospital can only be said to have been an involuntary admission, even though there was no question as to his right to be there by reason of his disabilities and war service status.

On March 9, 1956, the Portland Trust Bank was appointed guardian of Warpouske's estate for the purpose of receiving an inheritance from the estate of a brother who predeceased him in Wisconsin. This was in the net amount of $12,727.67. In addition thereto, he had when he died an item of personal property of the value of $28 and unexpended veterans pension benefits in the amount of $1,134.25. No contest exists between the parties as to the government's right to receive the last amount as rightly accruing to it under 38 U.S.C.A. § 450(3) of the Act of 1930. ²

Out of the foregoing statement we cull these significant admitted facts which bear heavily in the formulation of our final judgment: Warpouske, long before determined insane, was totally mentally incompetent when he was involuntarily delivered to the Veterans Hospital on March 1, 1956; and that then and thereafter until the date of his death he was incompetent to contract or to make a will, and neither knew where he was or that he had been the recipient of a substantial inheritance.

Contrary to the argument advanced by the government, we are of the opinion that when we take the Act of 1941 by its four corners it sounds in contract. It is designed to effect a contractual relationship between the veteran patient and the United States. This is emphasized by words and phrases appearing in its several sections. Thus, we find 'The acceptance of care or treatment * * * shall constitute an acceptance of the provisions and conditions of this subchapter and have the effect of an assignment' (Sec. 17 of Act); 'The fact of death * * * shall give rise to a conclusive presumption of a valid contract.' (Sec. 17a of Act) We note, too, that Sec. 17g directs 'a form of application for hospital treatment and domiciliary care which shall include notice of the provisions of this subchapter.' (Emphasis supplied.)

Appellant's principal assertion of error is: that the court erred 'because [it held that] he [the decedent] had not entered into a valid contract with the United States providing for such disposition [of his estate] upon his death.' (Emphasis supplied.)

The contractual character of the Act of 1941 has been consistently recognized and applied by the federal courts, and domonstrated by the following cases: United States v. Gallagher, D.C.S.D.Cal.1951, 97 F.Supp. 1014, 1015; United States v. Brown, D.C.S.D.Cal.1952, 110 F.Supp. 370, 372; United States v. Peoples Nat. Bank of Chicago, D.C.N.D.Ill.1953, 121 F.Supp. 331, 332; United States v. Mid City Nat. Bank of Chicago, D.C.N.D.Ill.1953, 121 F.Supp. 402, 403; United States v. Security-First Nat. Bank of Los Angeles, D.C.S.D.Cal.1955, 130 F.Supp. 521, 522; United States v. Stevens, 1938, 302 U.S. 623, 58 S.Ct. 388, 82 L.Ed. 484. It was also so construed in the following state cases: In re Witte's Estate, 1953, 174 Kan. 360, 255 P.2d 1039, 1042, 36 A.L.R.2d 717; In re Turner's Estate, 1959, 171 Cal.App.2d 591, 341 P.2d 376, 379. All of the cases cited in this paragraph, except United States v....