Opinion
No. 30350.
January 16, 1933.
ARMY AND NAVY.
Insane soldier's estate cannot be taxed with more than ten dollar attorney's fee, where attorney procured compensation under war risk policy without filing suit (World War Veterans' Act 1924, section 500, as amended [38 U.S.C.A., section 551]).
APPEAL from chancery court of Lauderdale county. HON. A.B. AMIS, SR., Chancellor.
Dunn Snow, of Meridian, for appellant.
Payment to an attorney or agent for such assistance as may be required in the preparation and execution of the necessary papers in any application to the bureau shall not exceed ten dollars in any one case. Any person who shall, directly or indirectly, solicit, contract for, charge, or receive, or who shall attempt to solicit, contract for, charge, or receive any fee or compensation, except as herein provided, shall be guilty of a misdemeanor and for each and every offense shall be punishable by a fine of not more than five hundred dollars or by imprisonment at hard labor for not more than two years, or by both such fine and imprisonment; provided, that the provisions of this section shall not apply to professional services required in the prosecution of any action in any court of law.
Section 500 of World War Risk Insurance Act.
The act is highly penal and must be strictly construed, and ought not to be applied in any case where the services for which a charge is made does not fall clearly within the provisions of the act. The penalty of the statute should not and cannot be extended so as to prevent the acceptance of a larger sum than ten dollars as a compensation for services which may be rendered by an attorney, which are not necessarily included in the simple preparation and execution of the necessary papers in an application to the bureau, respecting World War Risk Insurance and/or adjusted compensation and the like.
The statute does not contain one syllable respecting the conducting of investigation, the taking of proof, by affidavits or depositions, the submission of all argument, the writing of briefs, in support of the application as filed, and, since the statute is highly penal it cannot be made to apply to services of this character.
It is expressly provided that attorneys for guardians of the estates receiving money from the United States Veterans Bureau may be allowed, from the estate of the ward, a reasonable attorney's fee for legal services to the estate or to the ward, if the court be of the opinion that the services were proper and rendered in good faith, the amount of fee to be fixed in the discretion of the court.
Section 7345, Code of 1930.
The right to contribution is one of recognized equitable jurisdiction and the expenditures in recovering the money should be allowed to the appellants, if they, in fact, paid same, and it was necessary or proper.
Williams v. Hodge, 141 So. 905.
The court found that the employment of the attorney was necessary; that the contract was entered into in good faith; that services were rendered by the attorney pursuant to his employment; that such services were valuable to the estate of the ward and that they resulted in a recovery of something in excess of eleven thousand dollars, which would not have been recovered but for the employment of an attorney.
Allen Crenshaw, of Washington, D.C., and R.R. Dinsmore and D.G. Fountain, both of Jackson, for appellee.
Section 500 of the World War Veteran's Act of 1924, as amended, Title 38, U.S.C.A. 551, is constitutional.
Margolin v. U.S., 269 U.S. 93, 70 L.Ed. 176, 3 Fed. 602.
An attorney is not entitled to recover more than the statutory amount for all services rendered the beneficiary of the War Risk Insurance Policy, including preliminary services in preparing papers, correspondence with the bureau and trip to Washington.
Margolin v. U.S., 269 U.S. 93, 70 L.Ed. 176.
Under an indictment for a violation of section 500, World War Veteran's Act as amended (Title 38, U.S.C.A. 551), it was no defense to an indictment to say that the fee was allowed by order of the probate court having jurisdiction of the guardianship over the person and estate of the veteran.
Witty v. U.S., 2 F.2d 562.
The chancery court is without authority to authorize an illegal act, and the payment of a fee for the services of an attorney in establishing a claim against the United States Government on the order of the court, would constitute a violation of the statute referred to.
The attorney admits that he has been paid a fee of ten dollars for his services in establishing the claim of the veteran for his insurance and it is here contended that he has been paid the only legal fee, which, under the law, can be allowed for the service which he has rendered.
The claim which the attorney is making is for a fee based on ten per cent of the recovery by the guardian on the veteran's contract of War Risk Insurance, which is specifically prohibited except in event of recovery through judgment under suit in the United States Court and such fee determined by that court.
Congress had the right to say and did say that no agent or attorney would be recognized except under the conditions mentioned in the statute; also it had the right to say who should present claims, under what conditions they should be presented, what compensation should be allowed, and fixed a penalty for violation of the provisions of the statute.
Congress saw fit to authorize payment of benefits to guardians appointed in state courts but this provision of the Federal statute gave the chancery court of this state no authority to allow a fee for services which are prohibited by act of Congress.
The state court has no jurisdiction over the fund until it is received in the estate.
The state court has no jurisdiction to fix a fee for services rendered a guardian in presenting a claim against the government merely because it has jurisdiction of the appointment.
The agreement sought to be enforced in this proceeding is lacking in one of the essential elements of a valid contract; that is, it is lacking in legality of subject-matter.
This is an appeal from a decree of the chancery court of Lauderdale county, denying the petition of J.H. Minor, guardian of Roy C. Minor, a person of unsound mind, for a fee to an attorney for services rendered in procuring adjusted compensation for Roy C. Minor, who was a soldier in the late World War, and who subsequently became insane and was confined in the insane asylum.
Roy C. Minor had a policy of war risk insurance from the government. When J.H. Minor took out letters of guardianship, he noted that a portion of the premium was in default, and he sought to pay the premium to the government, which refused to receive it. He thereupon consulted his attorney, and they agreed that the attorney would undertake to investigate the matter and take the necessary steps to procure the reinstatement of the policy or adjusted compensation, and that the attorney would be paid such compensation for his services as the court would allow. This attorney, at considerable expense of time and money, investigated the matter fully, and established that Roy C. Minor became wholly incapacitated before the lapse of the policy. This attorney took proof and presented same to the government, which accepted the situation, and allowed to the guardian, as adjusted compensation, the sum of twelve thousand six hundred sixty-six dollars, of which eleven thousand dollars had been paid prior to the filing of the petition.
It was established, and the chancellor found, that the attorney's services were reasonably worth ten per cent of said amount, and that the soldier's compensation was secured through the efforts of the attorney, but the chancellor further found that, under section 551, United States Code Ann. title 38, he could not allow the fee, as no suit had been filed on behalf of Roy C. Minor for the purpose of procuring this adjusted compensation, and disallowed the claim.
It is undisputed that the government can, so long as the matter is in its control, fix fees which shall be allowed out of funds provided by it, such as compensation in the present case. Section 551 provides as follows: "Except in the event of legal proceedings under section 445 of this chapter, no claim agent or attorney except the recognized representatives of the American Red Cross, the American Legion, the Disabled American Veterans, and Veterans of Foreign Wars, and such other organizations as shall be approved by the director shall be recognized in the presentation or adjudication of claims under Parts II, III, and IV of this chapter, and payment to any attorney or agent for such assistance as may be required in the preparation and execution of the necessary papers in any application to the bureau shall not exceed ten dollars in any one case: Provided, however, That wherever a judgment or decree shall be rendered in an action brought pursuant to said section 445 of this chapter the court, as a part of its judgment or decree, shall determine and allow reasonable fees for the attorneys of the successful party or parties and apportion same if proper, said fees not to exceed ten per centum of the amount recovered and to be paid by the bureau out of the payments to be made under the judgment or decree at a rate not exceeding one-tenth of each of such payments until paid. Any person who shall, directly or indirectly, solicit, contract for, charge, or receive, or who shall attempt to solicit, contract for, charge, or receive, any fee or compensation, except as herein provided, shall be guilty of a misdemeanor, and for each and every offense shall be punishable by a fine of not more than five hundred dollars or by imprisonment at hard labor for not more than two years, or by both such fine and imprisonment."
As no suit was filed, it appears that the fee as allowed by this section shall be ten dollars, and the courts cannot allow more where there is no suit filed.
The validity of the federal statute was upheld in the case of Margolin v. United States, 269 U.S. 93, 46 S.Ct. 64, 70 L.Ed. 176. In Welty v. United States (C.C.A.), 2 F.2d 562, it was held that the statute does not prevent a guardian, or other person, paying, out of his own funds, compensation to an attorney for his services, but that the estate of the ward could not be taxed with an additional fee, unless suit was filed.
In the case at bar, it is true that the actual expenses of the attorney largely exceeded the fee allowed by the statute, but we are without power to create authority to tax the estate of the soldier with additional fees.
The judgment of the court below will therefore be affirmed.
Affirmed.