CERTIORARI TO THE SUPREME COURT OF NORTH CAROLINA.
Hughes, Van Devanter, McReynolds, Brandeis, Sutherland, Butler, Stone, Roberts, Cardozo
Mr. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
The controversy in this case relates to the liability to local taxation of certain bank deposits made by the petitioner as guardian of an incompetent veteran of the World War. Immunity was claimed under the federal statutes. World War Veterans Act, 1924, § 22,*fn1 43 Stat. 606, 613, 38 U. S. C. 454;
Act of August 12, 1935, §§ 3 and 5,*fn2 49 Stat. 607, 609. The Supreme Court of North Carolina denied the immunity (210 N. C. 352; 186 S. E. 504) and this Court granted a writ of certiorari, January 4, 1937.
The controversy was submitted to the state court upon an agreed case. It appeared that petitioner was appointed guardian in May, 1929, and that the veteran then owned no property other than claims against the United States for unpaid compensation and insurance. The tax date in North Carolina for property taxation is April 1st. In 1930 the guardian listed for taxation the property of his ward but the tax paid was refunded under a ruling of the Attorney General of the State, and in consequence no property of the ward was listed and no tax was paid in the subsequent years. In October, 1935,
however, the tax officials assessed the ward's property for each of the years 1931 to 1935, inclusive. The property consisted of deposits in banks and real estate loans. No question is raised by the petitioner with respect to the taxability of the latter. See Trotter v. Tennessee, 290 U.S. 354.
The agreed case showed the bank deposits as they stood on April 1st of each year.*fn3 It does not appear when the amounts making up these annual balances had been deposited or whether there was any special agreement relating to them. They are scheduled as "deposits in bank," without more. The stipulation states that they "represented and, in fact, were the collections from warrants or checks drawn and issued by the United States Government in payment of compensation and insurance" due to the ward, that these warrants or checks were deposited by the guardian and credited in his bank account, and that the items assessed were "the unexpended and uninvested balances," in the hands of the guardian, of the payments thus made by the Government.*fn4 Petitioner paid the taxes under protest and demanded refund which was refused.
We are not concerned with the questions submitted to the state court upon the agreed case so far as they related to the authority of officials under the state law to impose the tax in 1935 for the preceding years. The present contention is presented by the answer to the first question which was as follows:
"Where a guardian of a World War Veteran receives from the Veterans' Bureau of the United States Government, warrants or checks issued by said Government in payment of adjusted compensation or insurance due the guardian's ward, and such warrants or checks are deposited by the guardian in a depository, collected by it, and the proceeds are credited in the guardian's account ...