The suit prosecuted to this judgment was instituted by the said Mollie S. Jacobs, mother of Arthur L. Maddox, for money claimed. as due from her son on notes held by her. There was a former suit for judgment, and writ of attachment based thereon served on the superintendent of St. Elizabeths Hospital to garnish funds in his hands alleged to be the defendant's, but upon the defendant's state being brought to the attention of the court, the garnishment was quashed and the judgment vacated. To answer the second suit, a guardian ad litem was appointed to represent the defendant and judgment again entered for plaintiff, and it is this judgment on which the present claim is based. The judgment appears regular (see 32 Corpus Juris 788) and the only legal question before this office for consideration is whether the funds deposited in the United States Treasury to the credit of an inmate of St. Elizabeths Hospital are available for payment of court judgments against the inmate. Under date of September 22, 1927, St. Elizabeths Hospital has made the following report as to the status of the funds to the credit of Arthur L. Maddox: Taken from patient when he was admitted here_. Compensation received from Veterans' Bureau. Deposited in the disbursing office by supervisor unexpended advances to patient by the disbursing officer of the hospital___ Total to be accounted for. Advances to patient__ Balance to patient's credit____ $11.00 87.50 224.00 80.00 80.00 8.00 490.50 77.00 413.50 None of these funds are due the hospital as the Veterans' Bureau reimburses the hospital for maintenance and treatment or any other services that are rendered. In addition to the $384.00 noted above the patient is receiving other funds from the U. S. Veterans' Bureau as a beneficiary, there being deposited in the hospital $20.00 each month for comforts and desires and at the present time the amount to his credit from this source is $278.55. This amount is in addition to the $413.50 that is kept separately as none of this money was received for comforts and desires. These funds were deposited in the Treasury to the credit of Maddox under the act of February 2, 1909, 35 Stat. 592, amending Section 4839, Revised Statutes, as follows: * * * The said disbursing agent, under the direction of the superintendent, shall have the custody of and pay out all moneys appropriated by Congress for the Government Hospital for the Insane, or otherwise received for the purposes of the hospital, and all moneys received by the superintendent in behalf of the hospital or its patients, and keep an accurate account or accounts thereof. The said disbursing agent shall deposit in the Treasury of the United States, under the direction of the superintendent, all funds now in the hands of the superintendent or which may hereafter be intrusted to him by or for the use of patients, which shall be kept in a separate account; and the said disbursing agent is authorized to draw therefrom, under the direction of the said superintendent, from time to time, under such regulations as the Secretary of the Interior may prescribe, for the use of such patients, but not to exceed for any one patient the amount intrusted to the superintendent on account of such patient. The regulations issued pursuant to this act by the Secretary of the Interior do not specifically provide for payment of judgments against inmates from the funds to their individual credit, but grant the disbursing officer general authority to "draw, as disbursing agent, such sums as in the judgment of the disbursing agent may be necessary for the use of individual patients." Funds deposited in the Treasury under this statute have been described as trust funds and payable to or for the use of the beneficiaries. 15 Comp. Dec. 568. Payments from these funds under a court judgment, lawfully obtained, would be for the benefit of the beneficiary and it would be the duty of the Government, in the capacity of custodian or trustee of the fund, to pay the amount of a final judgment against the beneficiary from such trust funds. A question has been raised whether the funds to the credit of this individual inmate, in so far as they were derived from war-risk disability compensation, would be exempt from the claims of creditors under section 22 of the World War veterans' act of June 7, 1924, 43 Stat. 613, providing "That the compensation payable * under Titles II shall not be subject to the claims of creditors of any person to whom an award is made under Titles II *"" See also section 28 added to the war risk insurance act by the act of June 25, 1918, 40 Stat. 609. The exemption of benefits under the World War veterans' act and the prior statute, the war risk insurance act, from liability for debts of a beneficiary obtains only so long as the funds are in the hands of the Government, or while in transit to the beneficiary. After the receipt of such funds and after they have become mixed with other funds of the beneficiary, they have lost their identity as war-risk disability benefits and the bureau has no further control over them. They are then subject to the operation of the State laws, or in this case the laws of the District of Columbia. See the case of Sarah J. McIntosh v. R. L. Aubrey, 185 U. S. 122; 46 Law. Ed. 834, and annotations, wherein was considered a somewhat similar statute exempting pension money from attachment, levy, or seizure. Arthur L. Maddox was admitted into St. Elizabeths Hospital March 21, 1924. The compensation checks in the sums of $224, $80, and $80 were issued to and indorsed by Maddox after his admission into the hospital, but before he had been declared incompetent to receive and indorse such checks, he having been declared permanently and totally disabled because of insanity October 26, 1925. Such issuance of checks constituted lawful payment of the amount due. See the first proviso to section 21 of the World War veterans' act of June 7, 1924, 43 Stat. 613. After such receipt, indorsement, and deposit of the proceeds of such checks to the individual credit of the beneficiary as provided by law, the amounts ceased to form a part of the appropriation available for payment of disability compensation and came into the constructive possession of the beneficiary. Thereafter the provisions of the act of 1909 attached, and the funds were available only for the use of the beneficiary and ceased to have the status of disability compensation, which is exempt from the claims of creditors. Such payments made directly to the beneficiary must not be confused with payments of disability compensation of $20 per month made directly to the chief officer of a neuropsychiatric hospital under section 202 (7) of the World War veterans' act of June 7, 1924, 43 Stat. 619, which do not come into the possession of the beneficiary and do not cease to have the status of disability compensation while the beneficiary remains an inmate of such institutions. See generally 27 Comp. Dec. 240. Accordingly, there would appear to be no legal objection to the payment by the disbursing officer of St. Elizabeths Hospital of the claim in favor of Mollie S. Jacobs for the sum of $413.50 from the funds to the individual credit of Arthur L. Maddox, based on the judgment of the municipal court of the District of Columbia. (A-19471) VETERANS' BUREAU-INSURANCE-ESCHEAT The payment of war-risk insurance to the estate of the insured is authorized where no one within the permitted class was designated by the insured and there is a showing that there would be no escheat of the estate. Comptroller General McCarl to the Director, United States Veterans' Bureau, October 27, 1927: I have your letter of August 4, 1927, wherein is submitted the question of authority to pay insurance to the estate of an insured. veteran, deceased, in connection with a showing that he designated the payment to be made to his estate and by a will at or about a time immediately prior to his death bequeathed his estate to one a stranger in blood to him and not within the statutory permitted class for direct designation. Section 303 of the act of June 7, 1924, as amended by section 14 of the act of March 4, 1925, 43 Stat. 1310, provides: If no person within the permitted class be designated as beneficiary for yearly renewable term insurance by the insured either in his lifetime or by his last will and testament or if the designated beneficiary does not survive the insured or survives the insured and dies prior to receiving all of the two hundred and forty installments or all such as are payable and applicable, there shall be paid to the estate of the insured the present value of the monthly installments thereafter payable, said value to be computed as of date of last payment made under any existing award: Provided further, That in cases when the estate of an insured would escheat under the laws of the place of his residence the insurance shall not be paid to the estate but shall escheat to the United States and be credited to the military and naval insurance appropriation. This section shall be deemed to be in effect as of October 6, 1917. The specific requirement of the enactment is that if the insured, either in his lifetime or by his last will and testament, has not designated as beneficiary "any person within the permitted class," then "there shall be paid to the estate of the insured" the value of the monthly installments thereafter payable. If the showing be that no one within the permitted class has been designated, then the insurance is payable to the estate, provided that there be a showing that in its distribution there be some one to take, so that the concluding proviso as to escheat be not applicable. In other words, the payment to the estate is authorized if there be a showing that there would be no escheat of the estate. (A-20212) POSTAL SERVICE-REINSTATEMENTS AND TRANSFERS The Post Office Department has authority of law to reinstate or transfer employees from some other branch of the Postal Service, or the Government service generally, with the approval of the Civil Service Commission, to positions as clerks in first and second class post offices or carriers in the City Delivery Service and pay them initially upon reinstatement or transfer in the automatic salary grades above the minimum. Where the appointment of a reinstated or transferred employee is to the position of senior substitute clerk in a first or second class post office or of substitute carrier in the City Delivery Service, subsequent promotions through the automatic salary grades must be in accordance with the express terms of the statute, which would allow, for promotion purposes, no credit for service in any position other than that of substitute clerk or carrier. Comptroller General McCarl to the Postmaster General, October 28, 1927: Consideration has been given to your letter of October 17, 1927, requesting decision of certain questions presented as follows: From time immemorial it has been the policy and practice of this department to authorize the transfer from the Post Office Department proper, or any bureau or branch thereof, or field service organizations under its jurisdiction, classified persons there employed; to transfer classified employees from other executive departments of the Government, or field service branches thereof; and to reinstate former employees of the Post Office Service, having the necessary civil-service status, to positions in post offices. Under the provisions of the civil service act and section 1753 of the Revised Statutes and the Executive orders issued thereunder, transfers to the Post Office Service and the classification of qualified persons as employees in post offices are authorized, and no employee is transferred to the Post Office Service from this or any other executive department, or from the Railway Mail Service or the rural mail service until a certificate authorizing such transfer shall have been issued by the Civil Service Commission. When such certificates of authority have been received by the department, the salary status of the employee is fixed and determined by the department in accordance with the previous experience of the employee in the Postal Service or departmental service, and the value of the service of such employee to the Post Office Service. As a rule most of the persons transferred to or reinstated in positions in post offices are eligible to appointment to or reinstatement in regular positions. As it is not known at the time, in a majority of instances, whether a regular vacancy exists in the post office, it is and for many years has been our practice to authorize the transfer or reinstatement of the employee as senior substitute, to receive a designated salary when a regular vacancy occurs to which the employee can be assigned. Whether the stipulated salary is at the first grade or higher, we do not consider the advancement of the senior substitute, in these circumstances, a promotion, as intended and applied to substitute clerks, carriers, and laborers in post offices who have had no other civil-service status. Section 4 of the act of February 28, 1925, providing for the reclassification of postmasters and employees in the Post-Office Service provides, as follows: * * * "SEC. 4. That clerks in first and second class post offices and letter carriers in the City Delivery Service shall be divided into five grades, as follows: First grade-salary, $1,700; second grade salary, $1,800; third grade salary, $1,900; fourth grade salary, $2,000; fifth grade-salary, $2,100; Provided further, That hereafter substitute clerks in first and second class post offices and substitute letter carriers in the City Delivery Service when appointed regular clerks or carriers shall have credit for actual time served on a basis of one year for each three hundred and six days of eight hours served as substitute, and appointed to the grade to which such clerk or carrier would have progressed had his original appointment as substitute been to grade 1: And provided further, That clerks in first and second class post offices and letter carriers in the City Delivery Service shall be promoted successively after one year's satisfactory service in each grade to the next higher grade until they reach the fifth grade As understood by this department, and as applied in practice for many years, the above-quoted provision of section 4 is held to be applicable only to those employees selected from registers of civil-service eligibles and appointed directly to a regular vacancy, or to those substitute employees selected from registers of eligibles and advancing to regular graded positions, so as to prevent such employees from being placed in a higher grade than the first grade. As held and practiced by this department, the above-quoted provisions of law are not applicable in fixing the salaries either of persons transferred from this department, any of the bureaus or field-service organizations thereunder, or of employees transferred from other executive departments or field-service organizations thereunder. * * * In order, therefore, that we may proceed properly and legally, your opinion is requested as to whether this department is authorized to continue its present policies and practices to reinstate or transfer an employee in a status above grade one, in the following instances: 1. Upon the transfer of a rural carrier or the reinstatement of a former rural carrier to a grade position in a post office, or upon exchange of positions between post-office employees and employees of the Railway Mail Service or the rural mail service. 2. Upon the transfer or reinstatement of a railway mail clerk to a grade position in a post office. 3. Upon the transfer to a post office of an employee of the Post Office Department proper, or any of the other executive departments, or field-service branches thereof, or the reinstatement of any such employee to a position in a post office. It is understood that your entire submission, including the three specific questions stated, relates exclusively to appointments by reinstatement or transfer, with. the approval of the Civil Service Commission, to the positions of clerks in first and second class post offices or carriers in the City Delivery Service with initial salary rate upon reinstatement or transfer in automatic salary grades above the minimum, and that there is not involved appointments to positions in the Railway Mail Service or other branches of the Postal Service. What may be said hereinafter will be predicated upon such understanding. Section 4 of the act of February 28, 1925, 43 Stat. 1059, above quoted, allocates the positions of clerks in first and second class post offices and letter carriers in the City Delivery Service into five salary grades with provision for automatic promotion "successively after one year's satisfactory service in each grade to the next higher grade |