Szakovics Estate

1 Pa. D. & C.2d 77, 1954 Pa. Dist. & Cnty. Dec. LEXIS 167

This text of 1 Pa. D. & C.2d 77 (Szakovics Estate) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Northampton County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Szakovics Estate, 1 Pa. D. & C.2d 77, 1954 Pa. Dist. & Cnty. Dec. LEXIS 167 (Pa. Super. Ct. 1954).

Opinion

Barthold, P. J.,

This is a petition filed by the Department of Revenue of the Commonwealth of Pennsylvania for an order directing the guardian of the estate of Andrew M. Szakovics, an incompetent veteran, to reimburse the Commonwealth for the cost of the care and maintenance of the incompetent at the Allentown State Hospital.

The facts are uncontroverted and may be summarized as follows:

Andrew M. Szakovics is a United States veteran of World War II and is presently 27 years of age, having been born on September 26, 1926. After his honorable discharge from the service he became mentally incompetent and was admitted to the Allentown State Hospital on September 24, 1949. Thereafter he was awarded a veteran’s pension of $63 a month for permanent total nonservice-connected disability effective February 7, 1950. In view of the fact that the veteran was considered incompetent and no guardian had been appointed at that time, an award of $30 a month was made to the Superintendent of the Allentown State Hospital for the benefit of the veteran, and the difference between $30 and $63 a month, or [79]*79$33, was placed to the credit of the veteran in a fund maintained by the Veterans Administration known as “Personal Funds of Patients”.

On May 4, 1953, on petition of the Commonwealth of Pennsylvania, this court declared the veteran unable to take care of his property owing to weakness of mind and appointed the Lafayette Trust Company as guardian of his estate. On August 13, 1953, a check for $2,157, representing the accumulation of pension moneys due the veteran, was released to the guardian by the Veterans Administration. The Commonwealth of Pennsylvania then filed a petition requesting the court to make an order on the guardian “in such amount as in the discretion of your honorable court seems proper for the repayment to the Commonwealth of Pennsylvania of the sums expended for the care, maintenance and support of Andrew M. Szakovics, during the period from September 24, 1949, to May 4, 1953, and for the current care, maintenance and support of the said Andrew M. Szakovics from May 4, 1953, to the present time and for such future care, maintenance and support as the said Andrew M. Szakovics might require.”

The Veterans Administration filed an answer averring that the uninvested fund in the custody of the guardian is exempt from the claims of creditors by. act of Congress, since it was derived from veterans’ benefits paid by the United States Veterans Administration.

Counsel for the veterans bureau and counsel for the Commonwealth respectively concede the obligation of the guardian to pay for the ward’s maintenance after the date of the appointment of the guardian, but they disagree as to the obligation of the guardian to pay for the ward’s maintenance prior thereto.

Manifestly, when the Lafayette Trust Company was appointed guardian it became the guardian’s duty [80]*80to care for the necessities of the ward. The appointed guardian of a weak-minded person is given the same powers and duties as a committee in lunacy. The committee or guardian is a mere bailiff of the court, and the weak-minded person is in effect the ward of the court and his estate is in custodia legis: Barclay-Westmoreland Trust Company v. Dollar Savings Bank et al., 338 Pa. 421; In re Pritchard Case, 359 Pa. 315; Harvey Appeal, 170 Pa. Superior Ct. 289; In re Gerlach’s Estate, 127 Pa. Superior Ct. 293.

Counsel, accordingly, have agreed that the only question involved is whether the uninvested fund in the hands of the guardian, representing pension payments based on the incompetent’s war service, is exempt by act of Congress from the Commonwealth’s claim for reimbursement of the cost of the maintenance of the incompetent at the Allentown State Hospital from September 24, 1949, to May 4, 1953, a period prior to the appointment of the guardian.

The Veterans Administration contends that the Commonwealth is a creditor and as such is prohibited by act of Congress from recovering on the claim in question. The act of Congress provides:

“Payments of benefits due or to become due shall not be assignable, and such payments made to, or on account of, a beneficiary under any of the laws relating to veterans shall be exempt from the claims of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. Such provisions shall not attach to claims of the United States arising under such laws nor shall the exemption herein contained as to taxation extend to any property purchased in part or wholly out of such payments. . . : Act of August 12, 1935, c. 510, sec. 3, 49 Stat. at L. 609; October 17, 1940, c. 893, sec. 5, 54 Stat. at L. 1195, 38 U. S. C. §454 (a). It is [81]*81important to note that the provisions of this section of the act govern balances withheld by the veterans’ administrator and subsequently paid to a guardian: Act of Congress, amendment, July 13, 1943, c. 233, §2, 57 Stat. at L. 554, 38 U. S. C. §450.

The Commonwealth contends that it is not a creditor within the meaning of the above act of Congress and is entitled to reimbursement under Pennsylvania statutory authority.

It is uncontroverted that the fund is presently held by the guardian in a bank account, that it is uninvested and was derived solely from the United States Government. The fund is therefore impressed with the conditions annexed to it by the act of Congress. It is a well established legal principle that the United States as the donor of pensions and veterans’ benefits may by Federal enactment annex to the donation such conditions as it sees fit. The Supreme Court of Pennsylvania, Moschzisker, C. J., has declared that:

“The proceeds of war risk insurance are a definite kind of property, differing from the ordinary property of a soldier’s estate, and are in the nature of a beneficence or gratuity, bounty or pension, ... a part of (the federal government’s) war policy. . . . This distinct class of property, by federal enactment, is not subject to the claim of creditors or taxation, and is solely for the benefit of the soldier, his dependents and next-of-kin”: Wanzel’s Estate, 295 Pa. 419, 424.

The Supreme Court of Pennsylvania, Kephart, C. J., has also declared that:

“The fund arising from war risk insurance is an earmarked fund that has impressed on it the quality given to it by the United States Government — the quality of a national donation, bounty, or gift for services in defense of the nation. The fund may be traced through the various agencies until it reaches its final destination in consummation of the original [82]*82purpose for its creation. The badge of national obligation to a soldier protects it from liability for taxes, debts and the like; . . . . Congress was not interested in setting up a fund for creditors and excisors”: Fisher’s Estate, 302 Pa. 516, 523. See also Schmuckli’s Estate, 341 Pa. 36, 41, 42; Holmes v. Tallada, 125 Pa. 133, 136 (Paxson, C. J.).

In light of these decisions and the specific provisions of the act of Congress of 1935, supra, it is clear that the instant fund, uninvested in the hands of the guardian, is a distinct class of property, impressed by the Federal Government with an ■ exempt status as to liability for taxes and claims' of creditors.

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Bluebook (online)
1 Pa. D. & C.2d 77, 1954 Pa. Dist. & Cnty. Dec. LEXIS 167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/szakovics-estate-pactcomplnortha-1954.