A-16339, OCTOBER 26, 1927, 7 COMP. GEN. 291

A-16339: Oct 26, 1927

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ARE AVAILABLE. 1927: REFERENCE IS MADE TO YOUR LETTER OF JULY 30. THE SUIT PROSECUTED TO THIS JUDGMENT WAS INSTITUTED BY THE SAID MOLLIE S. THERE WAS A FORMER SUIT FOR JUDGMENT. THE GARNISHMENT WAS QUASHED AND THE JUDGMENT VACATED. A GUARDIAN AD LITEM WAS APPOINTED TO REPRESENT THE DEFENDANT AND JUDGMENT AGAIN ENTERED FOR PLAINTIFF. IT IS THIS JUDGMENT ON WHICH THE PRESENT CLAIM IS BASED. THE JUDGMENT APPEARS REGULAR (SEE 32 CORPUS JURIS 788) AND THE ONLY LEGAL QUESTION BEFORE THIS OFFICE FOR CONSIDERATION IS WHETHER THE FUNDS DEPOSITED IN THE UNITED STATES TREASURY TO THE CREDIT OF AN INMATE OF ST. ELIZABETHS HOSPITAL ARE AVAILABLE FOR PAYMENT OF COURT JUDGMENTS AGAINST THE INMATE. MADDOX: TAKEN FROM PATIENT WHEN HE WAS ADMITTED HERE .

A-16339, OCTOBER 26, 1927, 7 COMP. GEN. 291

ST. ELIZABETHS HOSPITAL INMATES - JUDGMENTS AGAINST - PAYMENT FUNDS DEPOSITED IN THE TREASURY OF THE UNITED STATES TO THE PERSONAL CREDIT OF AN INMATE OF ST. ELIZABETHS HOSPITAL, INCLUDING WAR-RISK DISABILITY COMPENSATION PAYMENTS MADE TO AND RECEIVED BY THE INMATE, AS DISTINGUISHED FROM PAYMENTS MADE TO AND RECEIVED BY THE HEAD OF THE INSTITUTION, ARE AVAILABLE, UNDER THE PROVISIONS OF THE ACT OF FEBRUARY 2, 1909, 35 STAT. 592, FOR PAYMENT BY THE DISBURSING OFFICER OF THE INSTITUTION OF A COURT JUDGMENT RENDERED AGAINST THE INMATE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, OCTOBER 26, 1927:

REFERENCE IS MADE TO YOUR LETTER OF JULY 30, 1927, FORWARDING FOR CONSIDERATION THE CLAIM OF MOLLIE S. JACOBS FOR $413.50 OF THE PERSONAL FUNDS IN THE UNITED STATES TREASURY TO THE CREDIT OF ARTHUR L. MADDOX, AN INMATE OF ST. ELIZABETHS HOSPITAL, THE SAME TO APPLY ON JUDGMENT OF THE MUNICIPAL COURT OF THE DISTRICT OF COLUMBIA, DATED JUNE 23, 1927, NO. 138922.

THE SUIT PROSECUTED TO THIS JUDGMENT WAS INSTITUTED BY THE SAID MOLLIE S. JACOBS, MOTHER OF ARTHUR L. MADDOX, FOR MONEY CLAIMED AS DUE FROM HER SON ON NOTES HELD BY HER. THERE WAS A FORMER SUIT FOR JUDGMENT, AND WRIT OF ATTACHMENT BASED THEREON SERVED ON THE SUPERINTENDENT OF ST. ELIZABETHS HOSPITAL TO GARNISH FUNDS IN HIS HANDS ALLEGED TO BE THE DEFENDANT-S, BUT UPON THE DEFENDANT'S STATE BEING BROUGHT TO THE ATTENTION OF THE COURT, THE GARNISHMENT WAS QUASHED AND THE JUDGMENT VACATED. TO ANSWER THE SECOND SUIT, A GUARDIAN AD LITEM WAS APPOINTED TO REPRESENT THE DEFENDANT AND JUDGMENT AGAIN ENTERED FOR PLAINTIFF, AND IT IS THIS JUDGMENT ON WHICH THE PRESENT CLAIM IS BASED.

THE JUDGMENT APPEARS REGULAR (SEE 32 CORPUS JURIS 788) AND THE ONLY LEGAL QUESTION BEFORE THIS OFFICE FOR CONSIDERATION IS WHETHER THE FUNDS DEPOSITED IN THE UNITED STATES TREASURY TO THE CREDIT OF AN INMATE OF ST. ELIZABETHS HOSPITAL ARE AVAILABLE FOR PAYMENT OF COURT JUDGMENTS AGAINST THE INMATE.

UNDER DATE OF SEPTEMBER 22, 1927, ST. ELIZABETHS HOSPITAL HAS MADE THE FOLLOWING REPORT AS TO THE STATUS OF THE FUNDS TO THE CREDIT OF ARTHUR L. MADDOX: TAKEN FROM PATIENT WHEN HE WAS ADMITTED HERE ------- ------------- $11.00 SALARY AS GOVERNMENT EMPLOYEE SENT HIM ---------- ---------------- 87.50 COMPENSATION RECEIVED FROM VETERANS' BUREAU -- ------------------- 224.00 COMPENSATION RECEIVED FROM VETERANS' BUREAU ---------------------- 80.00 COMPENSATION RECEIVED FROM VETERANS' BUREAU ---------------------- 80.00 DEPOSITED IN THE DISBURSING OFFICE BY SUPERVISOR UNEXPENDED

ADVANCES TO PATIENT BY THE DISBURSING OFFICER OF THE HOSPITAL -- 8.00

TOTAL TO BE ACCOUNTED FOR ------------------------------- 490.50 ADVANCES TO PATIENT ------------------------------------------- -- 77.00

BALANCE TO PATIENT'S CREDIT ----------------------------- 413.50

NONE OF THESE FUNDS ARE DUE THE HOSPITAL AS THE VETERANS' BUREAU REIMBURSES THE HOSPITAL FOR MAINTENANCE AND TREATMENT OR ANY OTHER SERVICES THAT ARE RENDERED.

IN ADDITION TO THE $384.00 NOTED ABOVE THE PATIENT IS RECEIVING OTHER FUNDS FROM THE U.S. VETERANS' BUREAU AS A BENEFICIARY, THERE BEING DEPOSITED IN THE HOSPITAL $20.00 EACH MONTH FOR COMFORTS AND DESIRES AND AT THE PRESENT TIME THE AMOUNT TO HIS CREDIT FROM THIS SOURCE IS $278.55. THIS AMOUNT IS IN ADDITION TO THE $413.50 THAT IS KEPT SEPARATELY AS NONE OF THIS MONEY WAS RECEIVED FOR COMFORTS AND DESIRES.

THESE FUNDS WERE DEPOSITED IN THE TREASURY TO THE CREDIT OF MADDOX UNDER THE ACT OF FEBRUARY 2, 1909, 35 STAT. 592, AMENDING SECTION 4839, REVISED STATUTES, AS FOLLOWS:

* * * THE SAID DISBURSING AGENT, UNDER THE DIRECTION OF THE SUPERINTENDENT, SHALL HAVE THE CUSTODY OF AND PAY OUT ALL MONEYS APPROPRIATED BY CONGRESS FOR THE GOVERNMENT HOSPITAL FOR THE INSANE, OR OTHERWISE RECEIVED FOR THE PURPOSES OF THE HOSPITAL, AND ALL MONEYS RECEIVED BY THE SUPERINTENDENT IN BEHALF OF THE HOSPITAL OR ITS PATIENTS, AND KEEP AN ACCURATE ACCOUNT OR ACCOUNTS THEREOF. THE SAID DISBURSING AGENT SHALL DEPOSIT IN THE TREASURY OF THE UNITED STATES, UNDER THE DIRECTION OF THE SUPERINTENDENT, ALL FUNDS NOW IN THE HANDS OF THE SUPERINTENDENT OR WHICH MAY HEREAFTER BE INTRUSTED TO HIM BY OR FOR THE USE OF PATIENTS, WHICH WILL BE KEPT IN A SEPARATE ACCOUNT; AND THE SAID DISBURSING AGENT IS AUTHORIZED TO DRAW THEREFROM, UNDER THE DIRECTION OF THE SAID SUPERINTENDENT, FROM TIME TO TIME, UNDER SUCH REGULATIONS AS THE SECRETARY OF THE INTERIOR MAY PRESCRIBE FOR THE USE OF SUCH PATIENTS, BUT NOT TO EXCEED FOR ANY ONE PATIENT THE AMOUNT INTRUSTED TO THE SUPERINTENDENT ON ACCOUNT OF SUCH PATIENT. * * *

THE REGULATIONS ISSUED PURSUANT TO THIS ACT BY THE SECRETARY OF THE INTERIOR DO NOT SPECIFICALLY PROVIDE FOR PAYMENT OF JUDGMENTS AGAINST INMATES FROM THE FUNDS TO THEIR INDIVIDUAL CREDIT, BUT GRANT THE DISBURSING OFFICER GENERAL AUTHORITY TO "DRAW, AS DISBURSING AGENT, SUCH SUMS AS IN THE JUDGMENT OF THE DISBURSING AGENT MAY BE NECESSARY FOR THE USE OF INDIVIDUAL PATIENTS.' FUNDS DEPOSITED IN THE TREASURY UNDER THIS STATUTE HAVE BEEN DESCRIBED AS TRUST FUNDS AND PAYABLE TO OR FOR THE USE OF THE BENEFICIARIES. 15 COMP. DEC. 568. PAYMENTS FROM THESE FUNDS UNDER A COURT JUDGMENT, LAWFULLY OBTAINED, WOULD BE FOR THE BENEFIT OF THE BENEFICIARY AND IT WOULD BE THE DUTY OF THE GOVERNMENT, IN THE CAPACITY OF CUSTODIAN OR TRUSTEE OF THE FUND, TO PAY THE AMOUNT OF A FINAL JUDGMENT AGAINST THE BENEFICIARY FROM SUCH TRUST FUNDS.

A QUESTION HAS BEEN RAISED WHETHER THE FUNDS TO THE CREDIT OF THIS INDIVIDUAL INMATE, IN SO FAR AS THEY WERE DERIVED FROM WAR-RISK DISABILITY COMPENSATION, WOULD BE EXEMPT FROM THE CLAIMS OF CREDITORS UNDER SECTION 22 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 613, PROVIDING "THAT THE COMPENSATION * * * PAYABLE UNDER TITLES II * * * SHALL NOT BE SUBJECT TO THE CLAIMS OF CREDITORS OF ANY PERSON TO WHOM AN AWARD IS MADE UNDER TITLES II * * *.' SEE ALSO SECTION 28 ADDED TO THE WAR RISK INSURANCE ACT BY THE ACT OF JUNE 25, 1918, 40 STAT. 609.

THE EXEMPTION OF BENEFITS UNDER THE WORLD WAR VETERANS' ACT AND THE PRIOR STATUTE, THE WAR RISK INSURANCE ACT, FROM LIABILITY FOR DEBTS OF A BENEFICIARY OBTAINS ONLY SO LONG AS THE FUNDS ARE IN THE HANDS OF THE GOVERNMENT, OR WHILE IN TRANSIT TO THE BENEFICIARY. AFTER THE RECEIPT OF SUCH FUNDS AND AFTER THEY HAVE BECOME MIXED WITH OTHER FUNDS OF THE BENEFICIARY, THEY HAVE LOST THEIR IDENTITY WAS WAR-RISK DISABILITY BENEFITS AND THE BUREAU HAS NO FURTHER CONTROL OVER THEM. THEY ARE THEN SUBJECT TO THE OPERATION OF THE STATE LAWS, OR IN THIS CASE THE LAWS OF THE DISTRICT OF COLUMBIA. SEE THE CASE OF SARAH J. MCINTOSH V. R. L. AUBREY, 185 U.S. 122; 46 LAW.ED. 834, AND ANNOTATIONS, WHEREIN WAS CONSIDERED A SOMEWHAT SIMILAR STATUTE EXEMPTING PENSION MONEY FROM ATTACHMENT, LEVY, OR SEIZURE.

ARTHUR L. MADDOX WAS ADMITTED INTO ST. ELIZABETHS HOSPITAL MARCH 21, 1924. THE COMPENSATION CHECKS IN THE SUMS OF $224, $80, AND $80 WERE ISSUED TO AND INDORSED BY MADDOX AFTER HIS ADMISSION INTO THE HOSPITAL, BUT BEFORE HE HAD BEEN DECLARED INCOMPETENT TO RECEIVE AND INDORSE SUCH CHECKS, HE HAVING BEEN DECLARED PERMANENTLY AND TOTALLY DISABLED BECAUSE OF INSANITY OCTOBER 26, 1925. SUCH ISSUANCE OF CHECKS CONSTITUTED LAWFUL PAYMENT OF THE AMOUNT DUE. SEE THE FIRST PROVISO TO SECTION 21 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 613. AFTER SUCH RECEIPT, INDORSEMENT, AND DEPOSIT OF THE PROCEEDS OF SUCH CHECKS TO THE INDIVIDUAL CREDIT OF THE BENEFICIARY AS PROVIDED BY LAW, THE AMOUNTS CEASED TO FORM A PART OF THE APPROPRIATION AVAILABLE FOR PAYMENT OF DISABILITY COMPENSATION AND CAME INTO THE CONSTRUCTIVE POSSESSION OF THE BENEFICIARY. THEREAFTER THE PROVISIONS OF THE ACT OF 1909 ATTACHED, AND THE FUNDS WERE AVAILABLE ONLY FOR THE USE OF THE BENEFICIARY AND CEASED TO HAVE THE STATUS OF DISABILITY COMPENSATION, WHICH IS EXEMPT FROM THE CLAIMS OF CREDITORS. SUCH PAYMENTS MADE DIRECTLY TO THE BENEFICIARY MUST NOT BE CONFUSED WITH PAYMENTS OF DISABILITY COMPENSATION OF $20 PER MONTH MADE DIRECTLY TO THE CHIEF OFFICER OF A NEUROPSYCHIATRIC HOSPITAL UNDER SECTION 202 (7) OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 619, WHICH DO NOT COME INTO THE POSSESSION OF THE BENEFICIARY AND DO NOT CEASE TO HAVE THE STATUS OF DISABILITY COMPENSATION WHILE THE BENEFICIARY REMAINS AN INMATE OF SUCH INSTITUTIONS. SEE GENERALLY 27 COMP. DEC. 240.

ACCORDINGLY, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO THE PAYMENT BY THE DISBURSING OFFICER OF ST. ELIZABETHS HOSPITAL OF THE CLAIM IN FAVOR OF MOLLIE S. JACOBS FOR THE SUM OF $413.50 FROM THE FUNDS TO THE INDIVIDUAL CREDIT OF ARTHUR L. MADDOX, BASED ON THE JUDGMENT OF THE MUNICIPAL COURT OF THE DISTRICT OF COLUMBIA.