RESPONDENT: Aetna Casualty & Surety Company
LOCATION: Florida General Assembly
DOCKET NO.: 604
DECIDED BY: Warren Court (1962)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit
CITATION: 370 US 159 (1962)
ARGUED: Apr 25, 1962
DECIDED: Jun 11, 1962
Facts of the case
Media for Porter v. Aetna Casualty & Surety Company
Audio Transcription for Oral Argument - April 25, 1962 in Porter v. Aetna Casualty & Surety Company
Hugo L. Black:
Number -- United States, Harry Clifford Porter, 604, Harry Clifford Porter, Against Aetna Casualty & Surety Company.
John G. Laughlin, Jr.:
Mr. Justice Black, may it please the Court.
I speak for the United States which is here as an amicus curiae in support of the petition and the petitioner and to the courtesy of counsel for the petitioner and he has allotted me 25 minutes of his time and has agreed that I might open the case on the part of the petitioner.
The case brings before the Court a question of statutory interpretation and application and the statute itself provides an exemption from taxation and suits by creditors of benefits payable and administered by Veterans' Administration under the various benefit laws.
Perhaps that the outset should indicate the Government's interest in this case.
The statute which is now before the Court is a derivation of similar statutes that have been on the books for the better part of the year.
Under current laws administered by the Veterans' Administration in some 12 million individuals were on the roles as recipients of various veterans -- or various benefits.
These are payable not only to the veterans but in giving instances to the widows, parents and children of veterans.
A very substantial sum of money is involved running into billions of dollars annually and the Government's interest as we come here today is to what we hope is to keep faith with the congressional purpose not only in providing for these benefits but in providing that the benefits shall be immune from creditor suits as well as from taxation.
Coming to the facts of the immediate case, they date to 1952 when the petitioner was indicted for murder here in the District of Columbia.
A trial on that indictment resulted in his acquittal by reason of insanity.
He was thereupon committed to St. Elizabeth's where he presently resides.
The murder with which he was charged took place while he was an employee of a certain realty company within the District of Columbia and engaged in that employment, painting certain apartment dwellings within the district.
The administratrix of the decedent's estate brought a wrongful debt action against the petitioner's employer and another party not relevant here.
And as that suit ultimately turned out, a settlement was agreed upon and some $16,000 was paid over to the estate of the deceased.
The suit was defended and the settlement was arranged by the respondent here who then under a subrogation clause of its policy; liability policy, obtained an indem -- indemnity judgment over against the petitioner.
To obtain satisfaction of that judgment, writs of attachment were sued out against two savings and loan accounts within the district and a checking account in a local bank.
It is agreed at this point that the funds on deposit in both the savings and loan association and the bank are derived solely from disability compensation benefits paid by the Veterans' Administration pursuant to veterans benefit legislation.
Writs -- motions to quash the several writs were made and sustained by the District Court.
The judgment of the District Court was reversed by the Court of Appeals and then the Court of Appeals; the only issue was asked to the immunity of the savings deposits on file or with -- with these two savings and loan associations.
The issue as to the immunity of the bank account was eliminated from the case.
There are three prior decisions of this Court under previous statutes preceding the one now in effect, 38 U.S.C. 3101 (a) which are immediately relevant to the issue now before the Court.
These three cases were decided in a span of a 3-year -- a 6-year span between 1933 and 1939 and in brief, they hold, first of all the -- that the immunity provided by the statute did not extend to permanent investments which in the Trotter case to which I am referring consisted of real estate and buildings thereon.
The second case to which I -- in the order in which they were decided is Lawrence v. Shaw, where the Court held that bank deposits subject to the draft by the veterans' guardian were not subject to taxation.
In other words, the immunity right about the statute from taxation carried over unto -- until so long as these banks for these -- the funds were on deposit with the bank.
The third and final case to which I refer is Carrier v. Bryant where government bonds and negotiable notes purchased with benefit moneys were held not to be immune from a creditor's suit.
It was on the basis of these three decisions that the two courts below reached opposite conclusions and that there was a division within the -- the Court of Appeals.
It is the Government's position that consistent with the purpose not only of the benefit payments themselves but of the immunity which attends these benefits that the funds here in issue, savings account deposits with federal savings and loan association should be held immune from the suit by Aetna Casualty Company.
We would rely primarily upon the bank account decision of Lawrence v. Shaw where the Court made it plain that the congressional purpose could not have been to require that the recipients of these benefits carry them on their person or maintain them under the roof in order to prot -- protect and continue the immunity that the statute otherwise plainly accorded.
Rather, the Court made it plain that the conventional modes of receipt and retention of moneys should be recognized and that the immunity did attach.