Wilson v. Gardner's Estate (In re Gardner)

• Decision Date: 07 January 1936
• Citation: 264 N.W. 643,220 Wis. 493
• Parties: IN RE GARDNER. WILSON v. GARDNER'S ESTATE.
• Court: Wisconsin Supreme Court

220 Wis. 493

264 N.W. 643

IN RE GARDNER.WILSON

v.GARDNER'S ESTATE.

Supreme Court of Wisconsin.

Jan. 7, 1936.

Appeal from a judgment of the County Court of Eau Claire County; George L. Blum, Judge.

Affirmed.

Clara Gardner Wilson filed a claim against the estate of Sylvester M. Gardner, who was under guardianship as an insane person. From an allowance of the claim, the guardian appeals. The facts are stated in the opinion.Ramsdell, King & Linderman, of Eau Claire, for appellant.

Arthur Goldblatt, of Chicago, Ill., for respondent.

FOWLER, Justice.

The claim involved is by the divorced wife of a mentally incompetent World War veteran against his estate in the hands of his guardian. The claim is based upon a judgment of divorce which awarded the claimant the custody of a child of the parties and ordered the veteran to pay $8 a week to her for the child's support. The amount unpaid on this award was fixed by the court at $2,451.24, and the claim was allowed at that amount. The mother has received from the Veterans' Administration for support of the child the amount of $1,722.76, which was applied by the court as payment on the accumulations of the installments of the judgment of the court in the divorce action, together with such other sums as had been received by the claimant pursuant to said judgment, and the allowance was for the difference between the amount of all such payments and the aggregate of the amount due upon the judgment.

The payments by the Veterans' Administration to the claimant were made to her as guardian of the child upon an allotment of the veteran's monthly compensation between the veteran and the child.

The guardian of the veteran has in his hands belonging to his ward funds properly invested aggregating, with a small sum in the bank not invested, $3,080.06, all received from the Veterans' Administration as due the incompetent as a disabled World War veteran under an act of Congress. There is also a lost veterans' adjusted compensation certificate calling for payment to the veteran at a future date of $1,577.

The statutes involved hereinafter referred to are cited by section number only, and refer to sections of title 38, U. S. Code, 1934 edition (38 U.S.C.A.). The appellant claims that the judgment allowing the claim is erroneous under provisions of section 454 that amounts payable under the act providing for compensation to disabled World War veterans shall not be assignable, shall be exempt from the claims of creditors of any person to whom an award is made, and shall be exempt from taxation. The appellant also relies on section 618 in support of this contention. This section refers to adjusted compensation for service while enlisted during the World War and provides that no such compensation payable to World War veterans under the Adjusted Compensation Act to a veteran or his dependents or to his estate “shall be subject to attachment, levy, or seizure under any legal or equitable process.” As the fund involved was not received by the veteran as adjusted compensation, we do not perceive that this section applies to the funds in the hands of the veteran's guardian, although it does cover the unpaid adjusted compensation certificate.

A statute more in point, because of its interpretation by the Supreme Court of the United States, is section 54, which provides that “no sum of money due, or to become due, to any pensioner 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.”

The United States Supreme Court held in McIntosh v. Aubrey, 185 U.S. 122, 22 S.Ct. 561, 563, 46 L.Ed. 834, that: “The exemption provided by the act [[[§ 54] protects the fund only while in the course of transmission to the pensioner. When the money has been paid to him it has ‘inured wholly to his benefit,’ and is liable to seiz ure as opportunity presents itself. The pensioner, however, may use the money in any manner, for his own benefit and to secure the comfort of his family, free from the attacks of creditors; and his action in so doing will not be a fraud upon them.”

The statute when so construed was the same as above quoted, except that the words “Pension Office” stood in place of “Veterans' Administration.” The case from which the statement above quoted was made involved a levy upon execution upon land purchased with pension money. The case is followed in Trotter v. Tennessee, 290 U.S. 354, 54 S.Ct. 138, 139, 78 L.Ed. 358, which involved taxation of land purchased by a guardian of a veteran with moneys received from the United States for use of the disabled ward. Claim of exemption from taxation was based upon section 454, which, as above stated, covers assignment, exemption from subjection to claims of creditors and exemption from taxation. The lands so purchased were held not exempt. The opinion by Mr. Justice Cardozo states: “The moneys payable to this soldier were unquestionably exempt till they came into his hands or the hands of his guardian. McIntosh v. Aubrey, 185 U.S. 122, 22 S.Ct. 561, 46 L.Ed. 834. We leave the question open whether the exemption remained in force while they continued in those hands or on deposit in a bank. Citing McIntosh v. Aubrey, supra; State v. Shawnee County Com'rs, 132 Kan. 233, 294 P. 915;Wilson v. Sawyer, 177 Ark. 492, 6 S.W.(2d) 825;Surace v. Danna, 248 N.Y. 18, 24, 25, 161 N.E. 315. Be that as it may, we think it very clear that there was an end to the exemption when they lost the quality of moneys and were converted into land and buildings. The statute speaks of ‘compensation, insurance and maintenance and support and allowance payable’ to the veteran, and declares that these shall be exempt. We see no token of a purpose to extend a like immunity to permanent investments or the fruits of business enterprises. Veterans who choose to trade in land or in merchandise, in bonds or in shares of stock, must pay their tribute to the state. If immunity is to be theirs, the statute conceding it must speak in clearer terms than the one before us here.”

The opinion then cites the following decisions disallowing the exemption: State v. Wright, 224 Ala. 357, 140 So. 584;Martin v. Guilford County, 201 N.C. 63, 158 S.E. 847, 76 A.L.R. 978, and the following to the contrary which it expressly disapproves: Rucker v. Merck, 172 Ga. 793, 159 S.E. 501,Atlanta v. Stokes, 175 Ga. 201, 165 S.E. 270, and Payne v. Jordan, 36 Ga. App. 787, 138 S.E. 262. It then states that the exemption is not enlarged by reason of payment to the guardian instead of to the ward, following Spicer v. Smith, 288 U.S. 430, 53 S.Ct. 415, 77 L.Ed. 875, 84 A.L.R. 1525. Two of the disapproved Georgia cases next above cited upholding the exemption involved taxation of lands purchased with funds paid by the government to veterans or their beneficiaries. The other related to seizure on execution of land so purchased. The two cited with favor held land so purchased subject to taxation.

[1] While the cases above cited holding that the statute did not operate to exempt after the funds received were converted into land or other property involved taxation, the reason for the rule of the cases extends to the other two exemptions included in the statute. Unquestionably they would compel holding lands paid for by money received from the government as veterans' compensation subject to execution. In the instant case, had land been purchased by the guardian with the funds involved, there would be no doubt that the county court might devote it towards payment of the claim here involved. This conclusion is supported by the decision in Joyce v. Russell, 140 Wis. 583, 123 N.W. 123, which held that land purchased with pension money from the United States government was subject to the claims of creditors of the recipient upon her death under the provision of the...