United States v. Oregon

PETITIONER:United States
RESPONDENT:Oregon
LOCATION:Alabama General Assembly

DOCKET NO.: 329
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 366 US 643 (1961)
ARGUED: Apr 25, 1961
DECIDED: May 29, 1961

Facts of the case

Question

Audio Transcription for Oral Argument – April 25, 1961 in United States v. Oregon

Earl Warren:

Number 329, United States etcetera, et al, Petitioners, versus Oregon.

Mr. Morris.

Herbert E. Morris:

Mr. Chief Justice, may it please the Court.

This case involved the competing claims of the United States, this trustee of the Post Fund of VA Hospitals and Homes in the State of Oregon to the personalty of Adam Warpouske, a veteran who died without heirs or will in a Veterans’ Hospital in Portland, Oregon.

The Post Fund covers expenditures for recreational and religious purposes for veterans in hospitals and homes.

The Government’s claim is based on the provisions of 38 U.S.C. 17 — 17 (j), important provisions of which I’ll discuss in a moment in my argument.

The statute provides in essence that whenever any veteran dies as a patient receiving free care and treatment leaving neither heirs nor will, the money goes to the Post Fund for the sole benefit and use of these veterans left in this institution.

The State’s claim is based on this escheat statute.

The facts are relatively simple and are these.

Warpouske, a Word War I veteran, suffered from a non-service connected mental disability which he incurred during the 1920s and from which he suffered thereafter.

Between 1930 and 1945, he entered veteran hospitals and homes on 14 separate occasions, spending a total of seven years in these institutions receiving free care and treatment for both mental and physical impairment.

He signed applications on these entries saying he was unable to bear the cause, he was a non-service connected case, and agreeing to leave the property within the terms of this statute.

Now, the events leading up to his final stay in a Veterans’ Hospital and the dispute here commenced in December of 1955.

On that day, on December 31st, 1955, Mr. Warpouske was admitted to the Good Samaritan Hospital in Portland for treatment of a hip fracture and a cerebral hemorrhage.

This was a private hospital.

On January 5th, 1956, shortly thereafter, because it appeared that he was without fund, the State transferred him to the Multnomah County Hospital for treatment at the County’s expense.

During his period both in the Oregon Hospital and subsequently in the Veterans’ Hospital, Mr. Warpouske was mentally incompetent and also in the state of coma or semi-coma continuing.

On March 1st, 1956, he was transferred by state officials to the Veterans’ Hospital in Portland.

On March 9th, it was discovered that he just become heir — sole heir to the estate of a brother who predeceased him in a Veterans’ Hospital in Wisconsin.

On March 19th, 1956, he died without heirs or will.

He left the net estate of some $13,000.

The estate was paid, as they always are under the statute, the Federal Government did not contest their right to reimbursement for their public hospital care and treatment, so that for the Multnomah County care and treatment he — the estate was paid.

The estate conceded to the United States about a thousand dollars, an unused pension fund and that is in — in dispute here.

What is in dispute is the remaining $12,000.

Now, the trial court rule at this statute, on which the Government relies for support here, is based on the prerequisite of an actual common law contract but since Warpouske was mentally incompetent, could not and did not enter into such a contract, the property at personalty did not pass United States but went to the estate under this escheat statute.

The Supreme Court of Oregon on — on appeal by United States affirmed taking the same basic view of the statute.

It’s view with influence largely by this Court’s decision in United States versus Stevens, which we shall discuss, and by certain constitutional consideration, which we shall also discuss.

The Government’s argument is divided in a two essential part.

The first is that this statute, the provisions of which can be found on pages 3 to 7 of the Government’s brief, constitute a self-executing or automatic statute.

The only important considerations are that a veteran die at the patient in a veterans’ hospital or home leaving neither heirs nor will and then the money vest for use of other veterans in terms of Post Fund expenditure.

Herbert E. Morris:

Our second argument, of course, is that, as so construed, the statute does not violate the Tenth or Fifth Amendment of the Constitution.

Let me clear up any confusion immediately about what the statute does or does not do.

It leaves the veteran complete right to leave by will to anyone whom he selects up to the date of his death and the — the Federal Government honors in intestate succession under the law of the State or anyone to whom he might leave by will, right to the date of his death.

Now, aside from the constitutional conspirations which we think improperly influenced the Supreme Court of Oregon’s decision.

We submit that the statute, when analyzed as a whole, does not require a common law contract between a man coming into a hospital and that VA, the property to pass.

I turn initially to the cornerstone provision on the bottom paragraph at page 3.

This is the so-called vesting provision, a provision which the court below completely overlooked in its result.

That’s — that provision state that whenever any veteran, and I underscore any, dies in a prescribed circumstances, that is, leaving neither heirs nor will while receiving free care and treatment in a hospital or home, his personal property “shall immediately vest in and become the property of United States,” his trustee for the Post Fund.

Now, we submit that the use of the terms “any veteran” show the Congress was not distinguishing between treatment under this statute of competent men, incompetent men, men in a coma, men who are able to let this man for five minutes before an operation, they were applying it to any veteran who was in a VA hospital or home.

Felix Frankfurter:

Would it weaken your argument if one concluded that Congress didn’t think about it at all?

Herbert E. Morris:

I think that it wouldn’t weaken it.

We must interpret intention —

Felix Frankfurter:

Alright.

Herbert E. Morris:

— from the tools we have at hand and the statute, I submit, is the best and primary source.

Felix Frankfurter:

I suggest you must interpret the statute.

Herbert E. Morris:

We must interpret the statute.

There is some legislative history, which I shall discuss.

But the terms of the statute, we think, are clear enough.

This vesting provision, if there were no more, certainly, one cannot reach the conclusion of common law contract here.

And we submit in the remaining provisions that unless one can find the requirement of an actual common law contract because such a requirement would really undercut the — the initial vesting provision, unless one can find requirement of a consensual argument between veteran and VA, then the vesting provision remains enforced.

And we submit there is nothing in the remaining provisions to undercut the force and effect of the vesting provision.

On page 4, turning to the first full paragraph of Section 17, it says, “The foregoing provisions,” meaning the vesting provision, “are conditions precedent to the furnishing of care and treatment.”

Not a common law contract but the vesting provision.

The next sentence we come to, the court below referred to certain terms like acceptance and assignment but we must note the context are used in here.

The acceptance of care or treatment by any veteran shall constitute an acceptance of the provisions of the chapter and have the effect of an assignment.

It doesn’t say that an actual assignment or an actual knowing, common law contract is required.

And we submit the best parallel to this kind of statute, this isn’t a unique type of — of provision, are found in a non-resident motor vehicle laws whereby service process on a secretary of state in terms of a non-resident being involved in an accident is accomplished.

Those laws commonly provide, and I paraphrase, acceptance of the rights and privileges of using our highways shall constitute an acceptance or be equivalent to an agreement of services process on the secretary of state.

No one would contend that if an incompetent were driving through the State and was involved in an accident that that statute would not apply nor would one contend that if a man drove through a state without a sign saying, “I do not agree,” that the statute could only be applicable if there were a common law agreement.

And we don’t think that this statute does anything more than that because legislatures have a certain fear of laying down rules in ad vitam, and they use certain language that says, “Certain events to us are equal to the existence of a common law contract.”

Herbert E. Morris:

And they often do this.

It doesn’t mean that they are saying, for this statute to operate, you got to have an actual common law contract.

The conclusive presumption provision of 17 (a), as far as reflecting the intention of Congress, we submit is — is clear as far as vesting goes.

If Congress was thinking about a — an actual common law contract, it would’ve provided, perhaps, for a rebuttable presumption, so that evidence of incompetency and evidence of duress or whatever other contractual considerations could be used would be applicable.

But here, they say the fact of death, the fact of death of the veteran in a hospital while being furnished care or treatment shall give rise to a conclusive presumption of a valid contract.

Again, maybe inartistic, unnecessary usage of this comforting notion of a — of a contractual result but certainly as Widmore says, “This is — this conclusive presumption is a contradiction in term”.

And says no more than as a rule of law when you have the fact of death in this case and the result is established without any possibility of evidence, then all the legislatures are interested in the fact of death, and the case was established.

John M. Harlan II:

So far as the statute goes, your government’s right — is the government right to be complete under the first paragraph (Voice Overlap) —

Herbert E. Morris:

That — that’s true, but we — and we are saying that although certain comforting language was put in about contract unless you find the requirement of an actual common law contract.

John M. Harlan II:

You mean a sort of a constitutional standby and (Voice Overlap) —

Herbert E. Morris:

Perhaps so, but —

John M. Harlan II:

— showing up?

Herbert E. Morris:

Showing up, but I — unless you find actual common law contract, they were intended vesting and that’s what they accomplished.

The conclusive presumption provision, I think, really butchers the vesting provision.

If they were thinking of — of a case where concepts of contract could be introduced, you wouldn’t provide for a conclusive presumption.

Charles E. Whittaker:

Mr. Morris, on what legal basis does Congress have power to impose such a presumption?I don’t know that they have it, but I just wonder what is the basis.

Herbert E. Morris:

I’m not sure, Your Honor, what the basis for is.

If this, in fact, were a case where we weren’t looking at intention and where there was an actual common law contract required, you could find that, then using a conclusive presumption might be questionable.

This Court has struck down certain conclusive presumptions where there has to be a rational relationship between the thing assumed and the thing could be proven.

But here, we’re pointing to conclusive presumption provision as a reflection of congressional intention and that is, that all that’s important to them is that there be death and then the property pass even though they say it’s opposed the contract.

Charles E. Whittaker:

But the —

Felix Frankfurter:

The real question is what color is the Congress to say that a veteran being treated to a — being treated by a Veterans’ Hospital, who believes no (Inaudible)

Herbert E. Morris:

Yes.

Felix Frankfurter:

— if the property shows advert of United States rather than in the State from which he died.

That’s the real question.

Herbert E. Morris:

And that is why constitutional discussion, and I — and I shall go into that as the power —

Felix Frankfurter:

That’s the real question because if — if it hasn’t any power to do that by ordinary language, it can’t show it self up.

Herbert E. Morris:

That — that’s correct, if it —

Felix Frankfurter:

(Voice Overlap) my Brother by saying a conclusive presumption.

Herbert E. Morris:

That’s right.

Herbert E. Morris:

If the —

Felix Frankfurter:

Why should there be a conclusive presumption to the veteran who’s demanded this — once instructed to go to United States?

Herbert E. Morris:

If there were no conclusive presumption provision, we’d still have the vesting provision and be faced with the constitutional problem of the power of Congress, and I shall go in to — and I shall treat that.

Felix Frankfurter:

(Inaudible)

Charles E. Whittaker:

Well, Mr. Morris —

Felix Frankfurter:

(Inaudible)

Herbert E. Morris:

The conclusive presumption provision?

Charles E. Whittaker:

Mr. Morris, I suppose there’s no question about the fact that Congress says power to set up the Veteran’s Administration and such these hospitals and to impose conditions one of which would be the one we have here but that get you into the trouble of implying a contract and the need, therefore, for contractual capacity, doesn’t it?

Herbert E. Morris:

No, I think that Congress as — as a — under the power to provide hospitalization and other gratuities under the power to maintain an Army and Navy can’t put reasonable conditions on these gratuities.

They could take the gratuities like hospitalization away completely.

And this, as I shall show, is a very reasonable condition without contract as — as an automatic operating feature without — without implying (Voice Overlap) —

Charles E. Whittaker:

Reasonableness wouldn’t save it though.

It — there has to be a constitutional power, doesn’t it?

Herbert E. Morris:

That’s right.

And we — and we submit that there is a constitutional power, and I shall come to that in my constitutional discussion.

But I do want to finish my discussion of the — of the term for the statute and the legislative history.

The notice provisions in 17 (g) on page 6, aren’t constitute no more than that this law like so many others will be brought to the attention of the veteran in the hospital and maybe accomplished not only by placing it on the application form, but by posting it in a prominent place.

No concept of actual contract here, just a reminder to the veterans that if they don’t have close relatives, they may leave by will.

Now, the legislative history, we submit, is best reflected by this statute and that there is no requirement of an actual common law contract here.

There are certain strains of other legislative history favoring the Government and certain legislative history favoring respondent here.

But I think as Judge Frank often observed where there is some legislative history on both sides, one does not precluded from looking at the terms of the statute, and that’s what I — I’ve just done, and I think it’s the best and primary source of legislative history here.

The legislative history supporting the Government is the change in language, first of all, between the predecessor statute and this one.

On page 25 of the Government’s brief, the 1910 Act is set out in a footnote.

That Act used the terms “not only application of the veteran shall be obtained but his consent shall be obtained”.

There is no such language in — in the revised statute.

In the first sentence, the application and admission of the applicant shall be in constitute of valid contract.

There is no such language here.

Application here is just for notice.

Application is not a prerequisite to getting into a VA Hospital.

It’s a way of determining a man’s eligibility.

Herbert E. Morris:

The other legislative history on which the Government relied is the factual context in which this Act was passed in 1941.

At that time, 55% to 60% of the patients in VA Hospitals and Homes were neuropsychiatric patients.

Most of them — many of them, presumably, entered incompetent, many of whom didn’t have a guardian.

90% of the men entering institutions at this time were non-service connected cases and not indigent and were going to leave much of a stay.

Hugo L. Black:

May I ask you what is the General Post Fund?

Herbert E. Morris:

The General Post Fund is set up under 31 U.S.C. 725s, I believe, and it’s a fund created at non-appropriated funds for purposes of providing religious and recreational services for veterans in VA Hospitals and Homes.

It takes gifts as well as under this statute.

It is true that Congressman Rankin or the Chairman of the Veteran Affairs Committee, in a debate on the House floor, took the opposite interpretation of this bill but the Government takes here.

Let me put his statement in context because I think it’s important.

The bill was drafted in the Veteran’s Administration.

Mr. Rankin’s statement that it only applied when a man physically or mentally able to contract was made without the benefit of any hearing, there were no hearing.

Hugo L. Black:

Is it pointed in your brief?

Herbert E. Morris:

It’s referred to in my brief, and it set out in appellee’s brief, Your Honor.

Part of the colloquy, at least, is set out on the floor starting on page 16 of the State’s brief.

That’s just part of it there.

We refer to it in its place in the congressional record.

Hugo L. Black:

Is he Chairman of the Veteran’s Committee —

Herbert E. Morris:

He was.

Hugo L. Black:

(Inaudible)

Herbert E. Morris:

He was.

There’s nothing in the Committee Reports — there was no conference report.

Nothing in the Committee Reports to back up his statement.

The context in the colloquy whether this bill was brought up in a hurry, another member of the Committee, Mr. Pfeffer asked Mr. Rankin, “Wouldn’t there be a conflict here between escheat laws and this federal statute?”

Mr. Rankin stated, and we — we think implicitly in his opinion that there would be no conflict because a veteran had to enter into a contract.

And if he was insane or physically unable, the statute wouldn’t apply.

Now, there was no — the colloquy reflects that there was not even unanimity of opinion on the Committee.”

It just been brought up that moment on the floor,” Mr. Rankin answered.

Certainly, it doesn’t have the stature of the most persuasive type of legislative history that Mr. Justice Frankfurter referred to and commissioner reacts, that is, the Committee Report.

It’s a sincere belief of Mr. Rankin, I believe, a mistaken one.

We think that the statute here, the legislative history that is favoring the Government that changes in language from the 1910 Act and the actual situation in 1941 overweigh what Mr. Rankin said in the balances the court must draw.

Hugo L. Black:

Did the Committee Report referred to that particular point as Mr. Rankin had said?

Herbert E. Morris:

The Committee Report did not expressly but it had a paraphrasing of the language used which, in your comparison, you will see the considerable change from the 1910 Act and showed in its paraphrase that each of these provisions was self-executing.

They didn’t mention the need for contract, but they didn’t — the Committee Report didn’t direct itself explicitly to this problem.

Now, the State cases, three State cases prior to this, all support the Government.

And I’ll leave that to development in the briefs.

The administrative practice of the VA has been consistent since 1941.

It is — this statute has been applied to both incompetent and competent.

The Stevens case is the only decision on which the court below — the Stevens case and cases subsequent to Stevens following its approach are the cases on which my opponent relied and which the court below relied.

But that — in that case, this Court didn’t reach the issue.

This was a 1910 Act application for membership to an old soldier’s home, a competent veteran.

The Government argued that by signing a form saying, “I hereby agree to leave my property,” he had enacted a contract, and he was competent too.

And the court so rule but it didn’t have to reach the fact situation presented here, so that that case is no impediment to the Government’s position.

Now, we’d like to compare as a — as a closing on the statutory half of my argument, the Stevens decision and the 1941 Act.

The Stevens decision just involved, under the 1910 Act, application of membership to old soldier’s homes as compared to people who were being admitted to hospitals, application to an old soldier’s home is a much more deliberate process, a man can be rejected by refusing to accept these provisions on a whole to much more deliberate process in hospital admission.

And I think that contractual concepts, common law contract to pass a contract made sense from Stevens.

But the 1941 Act not only eliminated it all in 1910 Act’s use of the terms consent and formality to common law contract but it is applied to hospital.

Men like Warpouske, men who aren’t mentally incompetent and come in in a coma come in everyday under emergency situation, the application here isn’t a prerequisite, there’s nothing in the statute to regulation that makes a man stay in a VA Hospital if he’s in a critical condition based on signing an application form.

This would be — if you applied common law contract to this note to — to the facts of the hospital cases, this would be an impossible statute to administer, litigation as to duress where an operation had to be performed, would a man accept, would he sign, could it be shipped out if he wouldn’t sign and when he needed an operation in a Veterans’ Hospital, we say that common law contract just doesn’t make sense, it reduces the hospital situation almost to an absurdity.

Potter Stewart:

Mr. Morris, as a matter of fact, how much emergency were to Veterans’ Hospitals do?

How often would it be that a person would be brought in from an accident or in to — in to a Veterans’ Hospital?

I — I’ve been under the impression, perhaps, quite mistakenly that veterans’ hospitals had chronic patients more often and that people picked up off the street, automobile accidents and so on were taken to Veterans’ Hospitals (Voice Overlap) —

Herbert E. Morris:

Well, I think — I —

Potter Stewart:

— about that?

Herbert E. Morris:

— I have no statistical before —

Potter Stewart:

Well, I’m not — I don’t care about statistics.

Herbert E. Morris:

— from — from my statement.

Potter Stewart:

I just want to —

Herbert E. Morris:

I — I think that —

Potter Stewart:

(Voice Overlap) — they are.

Herbert E. Morris:

— the chronic disable more or less goes if he can — if he had the other eligibility requirements to a domiciliary which is what the 1910 Act covered in old soldier’s home chronically disabled.

Herbert E. Morris:

But I think the Veterans’ Hospitals do handle a certain number of emergency cases.

I’m not sure how many —

Potter Stewart:

Do they handle any — anybody unless — until or unless they know he’s a veteran?

Herbert E. Morris:

They’ll handle anyone if he — even if he’s not a veteran.

They may — if he — finally find out after they treat him, he’s not a veteran, they may charge him with a — with a cost for care and treatment.

But they’ll — they will — I mean, the fact that someone’s brought to them in an emergency situation there and — and he needs help, they’re not going to say at this — right now, we got to know whether this man is a veteran or out he goes from our hospital.

Potter Stewart:

Well, that’s what I wondered about.

I wonder if — if for that reason whether or not they do take emergency people.

Herbert E. Morris:

I think — I — I believe they do.

I think that Mr. Warpouske was in fairly critical condition here.

Potter Stewart:

Yes, except he had been in other hospitals long enough for — for everything to be found out about him that was going to be found out.

They knew he was a veteran at the time he was in the Veterans’ Hospital.

Herbert E. Morris:

Well, presumably although the record isn’t clear —

Potter Stewart:

(Voice Overlap) —

Herbert E. Morris:

— that his eligibility would determine without an application.

But as far as I know, people may be transferred in critical shape as they were here from state hospitals (Voice Overlap) —

Potter Stewart:

It’s not important.

I just wondered if you did know.

I don’t really know.

I just —

Herbert E. Morris:

Well —

Potter Stewart:

— had impression in other words.

Herbert E. Morris:

— even if — even if it is an overwhelming number, I would say the problems are still there for — for contract concept or concepts to be applied here.

A man — man signed a form, his incompetency or competency may be determines by Veterans’ Boards at subsequent stages.

It’s very difficult to — to determine exactly what his state of capacity was at the moment he signed the application form.

In other words, the application is being used as the way for determining eligibility.

What happens when a parent or — or a friend brings him in, can the friend contract for him?

The friend would sign the form normally.

This is just the way to make sure that it have prima facie evidence that the man is eligible for treatment.

Turning to constitutionality —

Hugo L. Black:

May I ask you one other question then?

If this man seems to have been in hospital in Portland for some weeks or several months maybe?

Herbert E. Morris:

From January — from December 31st, I believe, to March 1 when he was in —

Hugo L. Black:

And he —

Herbert E. Morris:

— the two state hospitals.

Hugo L. Black:

— was moved to the Veterans’ Hospital and stayed only a short time?

Herbert E. Morris:

19 days in the Veterans’ Hospital before he died.

Hugo L. Black:

Is it your claim or is anything — any contest here to whether or not this Oregon — Oregon Hospital should recover anything out of his estate for services it rendered?

Herbert E. Morris:

It did recover.

Hugo L. Black:

It did.

Herbert E. Morris:

Yes.

Now, we —

Hugo L. Black:

Out of his fund?

Herbert E. Morris:

Out of — out of the gross estate, it was paid $198 for care and treatment in the — in Multnomah County Hospital.

So that it — it’s reimbursed, all claims under this federal statute, Your Honor, even if it would take up all the money of his estate, the — the State would come first before the Federal Government.

So that not only heirs nor divide either will, Your Honor, but creditor’s claim.

Hugo L. Black:

Is it merely the balance you have the payment of all debt (Voice Overlap) —

Herbert E. Morris:

All creditors — that’s correct.

The Tenth Amendment I don’t think really is the substantial problem.

If the Federal Government enacts a statute pursuant to a power delegated to it, with a legitimate purpose in mind, and if it uses necessary and appropriate means, and that means reasonable mean, would brought discretion vested in Congress, then there’s no violation of the Tenth Amendment.

And it doesn’t matter that this law displaces the escheat law of the State in a given circumstance because the Supremacy Clause says that the federal law is necessary and appropriate and pursuant to a federal power delegated on the Constitution as supreme.

I don’t think, as we stated, that there is any doubt about the power.

They’ve got the power to grant all sorts of gratuities and benefits to veterans and the condition of those grants or gratuities.

They don’t have to provide hospitalization or Post Fund benefits at all to these veterans.

The purpose, I think, is — is equally indisputable legitimacy of — of raising money in some fair and equitable way to keep the Post Fund going so that man can have TV sets or whatever this fund covered.

So the only question, I think, is whether they’ve chosen — whether Congress has chosen necessary and appropriate mean with all the discretion in the — in that — in that standard that this Court has given the necessary and appropriate.

I think that Congress has implicitly stating for constitutional purposes the following factors in using this vesting apparatus, in using the — the automatic or self-executing apparatus that we say the statute contained.

That based on their relationship with veterans, they can offer them gratuities and condition (Inaudible), that they are assuming a state burden to some extent by VA Hospital.

As this case shows, the States, when they have a man who is eligible for VA treatment, will send them to a VA Institution.

They couldn’t do what States do.

Herbert E. Morris:

What does the State of Oregon do with its public charges who die in their — in a — in a state hospital?

They charged the estate with the cost of care and treatment before the taking by heirs or beneficiary, so that Warpouske had stayed in the State of Oregon Hospital, his estate would be charged with a full cost of care and treatment prior to taking by a widow or anyone else he might have left.

What — what Congress is doing here is saying, “We’re not going to use that estate, and we could constitutionally do that.”

But what we’re going to do is seek only a minimal token form of repayment.

Most of the men who come into our institutions are indigent, 90% of them in 1941.

Warpouske was indigent here.

We’ll exact a minimal form of repayment or quid pro quo when a man doesn’t leave by will, although we tell him he can’t until he dies in this institution to anyone including the estate if he doesn’t leave anybody by intestate succession, then we’ll take what he has in personalty because we think we have a paramount right in view of what we’ve given him to keep the Post Fund going.

In fact, it’s such a fair device that we can presume the veteran would prefer to have his money left in his wife.

Now, there are may be a more direct way of doing it.

They might have taxed people to get moneys for the Post Fund.

They could’ve charged the estate as — as States do, but I think that that would cut out the estate as often as not, it would cut out heirs and beneficiaries often, but they are being most generous to veterans.

This doesn’t — this is the best possible offer of veteran going into these institutions because his estate will not be charged in any way unlike state hospital.

Charles E. Whittaker:

(Inaudible)

Herbert E. Morris:

The power is the power to — to exact the condition on — on the extension of a gratuity.

Charles E. Whittaker:

(Inaudible)

Herbert E. Morris:

There is no restriction in the law as I understand it that Congress exacts $10 limitation on lawyer’s fees for men who represent veterans before VA Institution.

That isn’t based on a veteran agreeing.

The veteran may say, “I’m deprived of counsel by $10 fee.

I can’t get a lawyer for that amount of money.”

But it’s not based on contract.

Congress has the right to do this as a — as a matter of self-executing law.

Charles E. Whittaker:

(Inaudible)

Herbert E. Morris:

That’s correct.

Charles E. Whittaker:

(Inaudible) of Oregon.

Herbert E. Morris:

Of Oregon.

Charles E. Whittaker:

(Inaudible)

Herbert E. Morris:

That’s right, and that’s what we say this law does.

Charles E. Whittaker:

Now, this law, however, (Inaudible)

Herbert E. Morris:

Without heirs.

Charles E. Whittaker:

— of United States.

Herbert E. Morris:

It doesn’t a ship by —

Charles E. Whittaker:

But most United States.

Herbert E. Morris:

Right.

Charles E. Whittaker:

And now, what power, specific power did Congress have to overwrite a law and make that rule?

Herbert E. Morris:

I’m afraid my time is up.

Can I —

Earl Warren:

You may answer.

Herbert E. Morris:

— answer —

Earl Warren:

Yes.

Herbert E. Morris:

The power, Your — Your Honor, is no different than the power exacted by — by Congress in a commerce situation.

The state says, “You’ve taken our police power by doing what you’re doing.”

What you call at the police power or anything else as long as what they’ve done is a mechanism.

That’s necessary and appropriate to a — to a power granted and to a legitimate purpose, then it’s valid as a — as a valid federal exercise.

They’re not interfering with the devolution of property of citizens here as the State controls over the devolution of property.

In Burnison, this Court said that the United States has a power to receive.

The State can control to whom certain citizens can give.

Those two powers are separate.

In Burnison, there was no federal law by which the Federal Government was taking person with two some powers.

Here, we have a law exercised pursuant to the power to condition reasonable gratuities given a veteran.

We don’t have to depend on a notion of contract to exact this form of repayment from the veteran.

Charles E. Whittaker:

(Inaudible) without federal statute.

Herbert E. Morris:

This law takes nothing from the veteran.

It is — it’s the most beneficial law to the veteran, he couldn’t hope for a better law.

I mean, there is no Fifth Amendment problem.

He’s not deprived with any property.

This law, unlike state laws, as I pointed out, says you can leave to heirs, you can leave to will and we won’t touch it only if, at the end of your life, there’s nothing — there no one who can take this property except the State, the United States thinks it has a right to take for its extension of a gratuities to you in a past.

So that it, really, isn’t taking anything from him that would require a contract from him.

Charles E. Whittaker:

(Inaudible)

Herbert E. Morris:

And — and just like in any other Tenth Amendment problem, the question is whether it has the power to take it from the State or to depose a state law.

This — there is nothing sacrosanct about the notion of this escheat.

Herbert E. Morris:

No more sacrosanct in the notion of the State’s right over its police power or the State’s rights over a local political activities, as in Oklahoma versus Civil Service Commission or the State’s rights as was provided in the Constitution in Case versus Bowles that its timberland couldn’t be sold in less than market value.

But the Emergency Price Control Act was held to be of a valid federal exercise, a necessary and appropriate carrying out of the war powers, and it didn’t matter about the state power.

And I say this is a parallel situation.

Thank you.

Earl Warren:

Ms. Zorn.

Catherine Zorn:

Mr. Chief Justice, this case fundamentally involves the construction of a statute.

And we had the statute before us and the purpose here is to construe the statute.

We take it, we find it, we cannot add to, we cannot take from it, we must accept the statute as it is written.

Essentially, the question is whether this statute is founded upon contract and the State contends or whether still operating as the Federal Government contends.

The facts in this case are unique.

It’s unusual situation.

This man was mentally incompetent for many years.

He suffered a stroke.

He was rendered unconscious in period preceding his hospital — his final hospitalization.

He had no heirs.

He fill heirs to his property, he never knew he had it.

He was unconscious at all times.

He was no more than semicomatose or at best.

Looking at the statute, we find that it is couched in the language of contract.

It speaks of the acceptance of the terms or the conditions of the statute as giving rise to an assignment.

He speaks of a presumption of contract arising out of the fact of death in the hospital, albeit, this is a conclusive presumption that the statute says.

However, the statute — the conclusive presumption provided in the statute must be examined in relation to the statute, in relation to facts.

It must necessarily presuppose the person mentally incompetent to contract just as in the case of a written instrument, ordinarily the recitals in a written instrument are presumed to be conclusive.

However, that does not preclude going into the facts and seeing whether or not this person executing the statute had no capacity to do so.

A person without mental capacity cannot — cannot execute a valid will or a contract or a deed.

It’s void without legal effect.

So hereto, the conclusive presumption in this statute falls for the lack of mental competency of the veteran.

Going on to the — we need not rely entirely on the written language of the statute, but we do have here the legislative history of the statute.

We can turn to the congressional record and find what Congress intended and that is the thing, that is the primary purpose in statutory construction to see what Congress intended.

We need not hear the line fallback on the language of statute and law but we can go actually the congressional record.

Catherine Zorn:

In this congressional record, the very question presented in this case was asked, “Does it apply to a mentally incompetent veteran for a person who’s physically unable to agree to anything?”

Congressman Rankin was the Chairman of the Committee, the Veterans’ Affairs Committee who introduced this bill in the Congress.

He was asked — the question was raised to the point was raised whether this put conflict with state law, and he said there could not possibly be any conflict between the provisions for this statute and state escheat laws.

In his word, because the veteran agrees to this arrangement when he enters the hospital and then if a veteran were insane, it would be an exception.

In that case, as the veteran were insane, in his words, the agreement would not amount to anything.

When asked if this legislation would apply to a physically incompetent veteran who might be picked up and unable to agree to anything, Mr. Rankin again replied, “If he does not agree, then this does not apply.”

We have set forth — we have set forth in our brief at page 16 part of the pertinent portions of the congressional record, at length, in order to give the comments and discussion of the Congressman sponsoring the bill?

It’s setting in context.

As Mr. Rankin pointed out, this bill involves only the personal property of veterans who died in his estate in veterans facilities who have no living relatives.

On page 17, the question was raised as to the state escheat laws and then in Mr. Rankin’s language he said, “Let me say to the gentleman from New York, there cannot possibly be any conflict because the veteran agrees to this arrangement when he enters the hospital.

The only exception would be where the veteran is insane, his agreement would not to amount to anything in that case.”

Hugo L. Black:

May I ask you this.

To what language of the Act at that time or the bill Mr. Rankin could possibly have been referred when he said it required to contract?

The — the Section as it passed does — said nothing about requirement of contract.

Catherine Zorn:

The bill itself as it was passed, Your — Your Honor?

Hugo L. Black:

Did it pass just as it was at the time Mr. Rankin (Voice Overlap) —

Catherine Zorn:

Yes, Your Honor.

There was no opposition to Mr. Rankin’s comments.

There was no discussion — no — nothing in the discussion to show that anyone disagreed with him.

Hugo L. Black:

I understand that but this — this statute itself uses the language that including money and chooses an action owned by him at the time of his death and not dispose of otherwise shall immediately vest in and become the property of the United States as trustee for the sole and benefit of the fund, how could he say that consistently with this Section?

Catherine Zorn:

I believe his purpose in saying that is this, that the statute was contractual if the veteran were —

Hugo L. Black:

But this — this Section, does it say anything about the contract?

Catherine Zorn:

The — the —

Hugo L. Black:

I — I don’t — I do not see where the Act as it is now rest on the contract than this one looked so over that strange language about presuming the contract exist.

Catherine Zorn:

I think you will find in — in reading the entire statute, Section 17 through 17 (j) that it is couched in languages of the contract.

There are may be some other language, perhaps, but, generally, it is a contractual statute.

In other words, the statute constitutes an offer which the veteran accepts by accepting care and treatment in the Veterans’ Hospital.

Hugo L. Black:

But this language in 17 says it shall vest and then says that these provisions that conditional precedent to the initial offer of the further furnishing of care to a veteran.

Catherine Zorn:

Perhaps, this would answer the question.

Hugo L. Black:

That’s why I do not quite understand Congressman Rankin’s statement unless the bill was different at that time.

Catherine Zorn:

The bill went through without any amendment or any opposition.

It was adopted in the foreman which was initiated in the Congress.

The — perhaps, this language would — in the Section 17 (a), near the end of the Section, it appears at page 10 of our brief.

The — the — let me see.

It’s starting a little further up, at the last sentence in the Section 17.

It goes on to say “The acceptance of care or treatment by any veteran admitted to the hospital,” and then paraphrasing a little bit, “as well as the continued acceptance shall constitute an acceptance of the provisions and conditions of the subchapter”.

So I believe there, it is the — there needs to be a contract or a consensual acceptance of care and treatment to constitute or it’s prerequisite to the acceptance of the conditions of the subchapter and out of that, the vesting arises.

Charles E. Whittaker:

That’s all in Section 17.

Catherine Zorn:

17.

I think the — the Section must be read as a whole and as a whole it has the — it has a contractual intent.

I think the general rule is that the remarks, discussions and explanations of the sponsoring chairman are entitled to great weight in the construction of a statute.

In other words, this legislative intent is the primary thing, and this is what the people who enacted the statute understood that it would not apply to a mentally incompetent veteran was unable to agree.

In addition to the language of the statute itself and the legislative history, we also have a great number of cases in which the statute was considered.

In these cases, the courts recognized that this statute is founded on contract, the predecessor’s statute as well as the present statute.

And in a number of these cases, the case is directly reflect the Federal Government took the position that is claimed under this statute is founded on contract.

We have the Stevens case which was a predecessor statute, albeit, in which the Federal Government took the position that his claim was founded on contract.

But we have the case of which the State, a 1953 Kansas case which considers the present statute, and again in that case, the Federal Government took the position that is claimed under the statute was based on contract.

And as a matter of fact, it relied — the Government itself relied on the case — on the Stevens case.

A later case in 1955 decided in California, again, the Government took the position that his claim was based on contract.

We have numerous other cases.

They numbered about a dozen in which the courts would recognize and in many of them, the Federal Government itself statement position that his claim was contractual.

Charles E. Whittaker:

Ms. Zorn, may I ask you please?

Is it reasonable to construe this statute, Section 17 as a two-fold one?

One, the first paragraph of which, as Mr. Justice Black referred to just a moment ago, as a matter of simple direction provides that the estate, the undisposed of estate of such a veteran dying in the hospital, Veterans’ Hospital shall go to the United States?

Now, in the next paragraph says that, “Acceptance of the care and treatment and the continued acceptance of it shall have the effect of an assignment effective at that.”

Now, then, that will appear to be contractual.

Is it, therefore, reasonable to say this statute is two-fold?

They got to be at both ways.

And if one fails, you still have to weak the other?

Do I make that clear?

Catherine Zorn:

Yes, Your Honor.

I believe the — the statute must be construed as a whole and that the ultimate result is that the entire statute is contractual in its nature.

That, at least, appears to be the legislative intent as reflected by the discussion of the Congressman.

That’s what they understood, that it was going to operate contractually.

Charles E. Whittaker:

(Inaudible)

Catherine Zorn:

I think that it gets very close to the — brings us to the Tenth Amendment question.

Traditionally, the State has the control of a devolution of property.

This, in effect, would be a control of a devolution of the property to this extent.

However, I do not believe that this particular statute does.

It is possible, perhaps, that Congress may enact the statute but we do not, at present, have that kind of a statute here.

Again, that is the question we would have to see the —

Charles E. Whittaker:

But you would have, I think, you (Inaudible) you would have that statute if it ended with the (Inaudible) paragraph of Section 17.

Catherine Zorn:

Yes, I believe that would be escheat statutes in substance.

Charles E. Whittaker:

Now, is — is that possible — possible to leave that as — as one basic views of the Government (Inaudible) and the main paragraph is another basis (Inaudible) in the contract?

Catherine Zorn:

I believe the statute, as it reads as a whole, is intended to be read as a whole and it was not intended to have a two-fold operation.

Felix Frankfurter:

What happens if —

Catherine Zorn:

I think —

Felix Frankfurter:

I beg your pardon.

Catherine Zorn:

I’m sorry.

Felix Frankfurter:

I beg your pardon, go on please.

Catherine Zorn:

I think that it was just about completely —

Felix Frankfurter:

Well, does the practical — the practical situation created by an intestacy of this sort, is by a failure to devolve the property or to have anybody inheriting it through intestacy is that here is a property left by a veteran who would had been in a Veterans’ Hospital and enjoyed the bounty of the Government to that extent, his property and some disposition must be made of it but if the Congress of United States doesn’t step in the estate, as the escheat of the State that if nobody else to take it, so the (Inaudible) to which we all belong — which we all belong, as it was been inherited, but what abstraction, what — what conflict is there would — would — to the reserved power of the States to profit by this escheat when Uncle Sam has no relation to the escheatable property?

What abstraction is that?

You say that when Uncle Sam does have a relation to “IE”, he has been a good Samaritan to the deceased owner, that Uncle Sam steps into Congress of United States and said, steps in by virtue of that fact, “We assert the superior power to the State which has no, no relation in justice or no basis in justice except there’s nobody else to take it and somebody must take it.”

Uncle Sam says, “We got a superior right to that abstract relation of the estate to escheat, namely, we’ve been good to the man whose property is non-incompetent.

What — what provision of the Constitution?

The Tenth Amendment says, “All reserved — all powers not here is disposed of, but we have to look around and look if there is any power not disposed of, and isn’t there a power, your assert power because of the relationship to the dead man who left the property.”

Catherine Zorn:

I —

Felix Frankfurter:

Meaning out of a common law contract, Uncle Sam does say by virtue of our samaritanship, we lay claim on this.

What so hard about that?

Catherine Zorn:

If — if the —

Felix Frankfurter:

What’s the profits about that?

Catherine Zorn:

If that is a delegated power to —

Felix Frankfurter:

Well, if the —

Catherine Zorn:

— the Federal Government —

Felix Frankfurter:

— Congress, as constitutional as you say anything about it, but it does say that you may establish Veterans’ Hospital, it does say that Uncle Sam has also to — relationship to the veteran, it does constitutionally authorized Uncle Sam to give his bounty to the veteran and is implied consequent to that it says, “We go to search some right to regard to it.”

Catherine Zorn:

Well, perhaps, this can be said that if the Veterans’ laws are extended to that extent, I would assume that there would be the — the Supremacy Clause would prevail.

However, I think like an everything else, there is a line of demarcation where the federal power in — from a state power begins is the state power dominant here more dominant than the federal power and that —

Felix Frankfurter:

Well —

Catherine Zorn:

— it didn’t — reaches the fade out area.

Felix Frankfurter:

Of course your position doesn’t require to — a challenge to that constitutional argument.You said the statute as a matter of construction —

Catherine Zorn:

That’s right, Your Honor.

Felix Frankfurter:

— requires a contract relation.

Catherine Zorn:

Yes, Your Honor.

Felix Frankfurter:

And if you’re right about that that even if one could formulate a constitutional doctrine to show the answer that Congress hasn’t asserted?

Catherine Zorn:

That’s correct, Your Honor.

William J. Brennan, Jr.:

But Ms. Zorn, I wonder, looking at the statement of Mr. Rankin, it actually — what he suggested is if the veteran is competent to dispose of his property whether by will, gift or otherwise, then he may do so.

The exception is what he is incompetent to make an agreement, then Uncle Sam takes it because he’s incompetent to dispose of over itself.

But what Mr. Rankin said was, “It cannot possibly be any conflict because the veteran agrees to this arrangement when he enters the hospital, the only exception would be where the veteran is insane”.

His agreement would not amount to anything in that instance and therefore, we don’t condition Uncle Sam’s taking it upon his making an agreement when he’s insane because he can’t make one.I think that’s what the statute may be.

Catherine Zorn:

I think, primarily, the object to this was not to — the Act itself didn’t — or there was not in contemplation of Congress any source of revenue you might say.

The idea was (Voice Overlap) —

William J. Brennan, Jr.:

What they were talking — they make it clear what they were talking about, was a — there was a nuisance to have — to —

Catherine Zorn:

That’s right.

William J. Brennan, Jr.:

— know what to do of the kind of thing that usually the deceased veteran left behind, and namely old suit cases, old trunks and suit cases and things like that, and they didn’t want to have to go calling upon the States to help them dispose of old trunks and suit cases.

They didn’t expect to have money $17,000 windfall.

Catherine Zorn:

That’s right, Your Honor.

This is a very narrow case because most veterans who are incompetent have relatives.

Most of them who do not have relatives have a guardian to act for them on their admission to hospital or they are there by commitment order.

And the very few who are left with no relatives, no guardian, no commitment order, most of them have no money, and it’s only a very rare case that you have (Voice Overlap) —

William J. Brennan, Jr.:

And yet, the (Voice Overlap) the Government has suggested.

The idea was to let the veteran dispose of his property or it’s nothing about his coming into the hospital which was to — that he had to pay for the attention he received or anything else he might dispose of it but if he suggest — may be what Mr. Rankin meant was, if he was competent to dispose of it and let him dispose of it but it — it was not Uncle Sam would take it because most of the time, it was an old trunk or an old suit case and it was easy to dispose of it that way, then he have to go to the red paper, going back to the States and that’s (Inaudible)

Catherine Zorn:

I — I don’t believe that quite — perhaps, the intent of the legislate or the Congress here, however, was to base upon contract because they — going down on the next paragraph here, Mr. Pfeffer asked there might be cases where a veteran is picked up in an incompetent condition, not mentally —

William J. Brennan, Jr.:

Well, that’s the important thing, not mentally but physically.

Catherine Zorn:

But physically.

William J. Brennan, Jr.:

There he’d be competent to agree — mentally to agree and this agreement would be required.

Catherine Zorn:

I think it’s — reading a little further, it says, he was unable to agree to anything when he entered the hospital.

William J. Brennan, Jr.:

Yes, but he’s not.

Catherine Zorn:

And then Mr. Rankin says, “If he does not agree, then this does not apply.

William J. Brennan, Jr.:

Does not apply.

Earl Warren:

Ms. Zorn, you spoke of the paramount interest of the State or the Federal Government in this situation is being determinative.

What — what is there in these circumstances that makes the interest of the State paramount vis-à-vis the Government?

Catherine Zorn:

I think the primary thing is the statute here —

Earl Warren:

I beg your pardon?

Catherine Zorn:

— it operates contractually.

In other words, it’s the — not the — so much — in other words, the statute is here, we must take the statute, we find it, it operates contractually, it does not provide for escheat that operates in contract and therefore, the State — escheat laws prevailed because here, the veteran was unable to enter into an agreement and no contract or rules and therefore, its escheated.

Hugo L. Black:

I understood you to base the States’ (Inaudible) on its power to control the devolution of properties.

Catherine Zorn:

Under escheat, yes.

Hugo L. Black:

Do you think that the power of the State to govern the property of a veteran, who is supported by the Government, is greater than the power of the State over an alien, that the Government might determine where his property would go?

Catherine Zorn:

I don’t think it’s too much of question of the power as the actual fact of the statute.

Hugo L. Black:

Well, I understand that.

Catherine Zorn:

Yes.

Hugo L. Black:

I — I was talking about the constitutional power problem you raised.

Catherine Zorn:

On the alien question in relation?

Hugo L. Black:

Well, undoubtedly true —

Catherine Zorn:

Yes.

Hugo L. Black:

— that the Government can — can overwrite the state law with reference to the devolution of property of an alien.

Catherine Zorn:

Yes.

Under —

Hugo L. Black:

Why would it have less power with reference to a veteran, a veteran who is under its care?

Catherine Zorn:

Well, perhaps, it is possible under a proper statute that it could overwrite but under this present statute being —

Hugo L. Black:

Yes, I —

Catherine Zorn:

— contractual, it does not.

Hugo L. Black:

— I understand that.

Catherine Zorn:

I don’t believe I have very much to add in conclusion of the argument here.

We’ve gone in to the — most of it, in the matter of questioning here.

I might mention in some of these cases that were mention by the Federal Government.

Most of those cases involved pension funds and in reading the case, as cited, I believe they were — the veteran was under guardianship, so it may be that in that particular case, the veteran came under both statutes.

At any rate, some of the courts do not distinguish between the basic difference between the statute here, the 17 (j), which tends — which rests in the contract and the Section 450 relating to pension funds which is a grant by the Federal Government of moneys to the veteran which it pertains the reversionary interest.

We have no part of funds here with veteran’s funds, but we conceded that they referred it to the Federal Government because it was a condition to grant.

I think there are questions relating to the power of a self-executing statute here or in the face of the statute being contractual, its nature.

It’s more or less hypothetical.

And if there were that type of a statute, the question, a self-offering statute here, perhaps, those constitutional questions might be developed a little bit further.

But here, the statute is based in contract, its evidence by the language of the statute, the legislative history and the cases.

Thank you.