Friend v. Garcelon

Peters, C. J. The section of the R. S., U.' S., (§ 4747) affecting the case is this : " No sum of money due or to become due to any pensioner, shall be liable to attachment, levy or seizure, by or under any legal or equitable process whatever, whether the same remains with the pension office or any officer or agent thereof, or is in course of transmission to the pensioner entitled thereto, but shall enure wholly to the benefit of such pensioner.” The question is, whether this provision furnishes any protection to or exemption of the money after it comes into the pensioner’s hands ? A careful examination inclines us to the conclusion that it does not. The meaning of the section seems to be that the protection is extended so long as the money remains in the pension office or its agencies, or is in course of transmission to the pensioner. It is money "due” or to "become due,” and not money collected, that is protected by the law. By another provision of the federal statutes a pensioner is not allowed to pledge or sell any right or interest in his pension. The extent of all the interference of the government seems to be, to ensure the actual reception of its bounty by the person entitled to it. When the money is actually in the possession of the pensioner the protection is gone. With the money in his hands as his own unencumbered property, the pensioner stands upon the same footing for its protection as would any other man. He may, no doubt, purchase [27] with his money any property which our state laws exempt from attachment, and hold it as such. Further than that the guardianship does not extend. He is accountable to his creditors precisely as any other debtor possessing money would be. The counsel for the defendants contend that it does not defraud a creditor for his debtor to give away property which the creditor cannot attach. There can be no doubt of that proposition. The answer is, that the money is exempted from attachment before it is received and not afterwards. Nor would it be very practicable to extend a protection further than before indicated. Certainly, the money could not be protected in its transitions from property to property. The moment its identification is gone, the protection confessedly ceases. If the money goes into attachable real estate, such estate may be taken for the pensioner’s debts. See Knapp v. Beattie, 70 Maine, 410. There would surely be some ground for saying that there might be an unfairness in extending the protection to the limit contended for. If the money be exempted against any debts, it would be against all attachments and all debts. And the pensioner may have obtained credit from the very fact of the possession of property acquired in this way. There are decisions favoring our view of the question. The Iowa court has twice affirmed the same view. Triplett v. Graham, 58 Iowa, 136. In Webb v. Holt, 57 Iowa, 712, it was said that "the exemption applies only to money due the pensioner, while in course of transmission to him, and that there is no exemption after it comes into his possession.” In Jardain v. Faivton Saving Fund Ass’n, 44 N. J. (Law) 376, the same conclusion was reached, where it is said by the court: "The fund is not placed in the hands of a pensioner as a trust, but it is to enure wholly to his benefit. When it comes to him in hand or persona] control, it is his money as effectually and for all purposes as the proceeds of his work or labor would be, and whether he expends it in new contracts, or it be taken to pay the consideration due from him for those of the past, it equally enures to his benefit.” In 126 Mass. 113 (Spelman v. Aldrich), it was held that "even if, by the laws of the United States, the [28] pension was exempt from attachment while it remained in the form of a pension check, the exemption ceased after the money was drawn upon the check.” Cranz v. White, 27 Kan. 319, is to the same effect. See S. C. 41 Amer. Rep. 408 and note. In 50 Vt. 612 (Hayward, v. Clark), a case not directly calling for a decision of the question, a different view is intimated. It follows that the bill may be sustained upon either of the grounds named in the report. Oase to stand for hearing. Danforth, Yirgin, Emery, Foster and Haskell, JJ., concurred.