The opinion of the court was delivered by: JOHNSON
This is a civil action praying for a declaratory judgment brought by the United States of America against the Dauphin Deposit Trust Company, a corporation incorporated under the laws of the State of Pennsylvania with principal place of business at Harrisburg, Pennsylvania, individually and as executor under the last will and testament of William G. Garverich, and also against Nellie G. Heck, defendants.
The question presented by the complaint is whether certain United States savings bonds became by virtue of their terms, and Federal Statutes and United States Treasury regulations, the property of the beneficiary named in the bonds or whether the said bonds became the property of the estate of the deceased registered owner.
From the evidence in the case the Court finds the following:
1. William G. Garverich, in his lifetime a resident of Dauphin, Pennsylvania, was the purchaser of five United States Savings Bonds each of the maturity value of one thousand dollars ($1,000.00), and numbered M-282810G, M-282811G, M-282812G, M-282813G, and M-282814G. These bonds were issued as of the first day of January, 1942, and each was registered in the form "Mr. William G. Garverich, Dauphin Pennsylvania, Payable on death to Mrs. Nellie G. Heck". Each identical bond contains a citation of the Treasury Circular under which it was issued and refers thereto "for a statement of the rights of holders, as fully and with the same effect as though herein set forth". The circular so referred to is numbered 654. Each bond also provides on its face that it is payable only "in accordance with the provisions of said circular and the regulations prescribed from time to time thereunder."
2. William G. Garverich died on October 23, 1942, without having presented, and without having surrendered to a Federal Reserve Bank or the Treasury Department, any of the bonds for payment.
3. On November 24, 1942, the defendant qualified as Executor of the Estate of William G. Garverich, deceased.
4. The United States Savings Bonds above referred to were issued under, and their transfer and ownership are controlled by, Section 22 of the Second Liberty Bond Act, as added by the Act of February 4, 1935, 49 Stat. 21, as amended by the Public Debt Act of 1941, Act of February 19, 1941, 55 Stat. 7, Title 31 U.S.C.A. § 757c.
Section 22(a) of the Second Liberty Bond Act, as amended by Public Debt Act of 1941, reads in part as follows: "The Secretary of the Treasury, with the approval of the President, is authorized to issue, from time to time, through the Postal Service or otherwise, United States savings bonds and United States Treasury savings certificates, the proceeds of which shall be available to meet any public expenditures authorized by law, and to retire any outstanding obligations of the United States bearing interest or issued on a discount basis. The various issues and series of the savings bonds and the savings certificates shall be in such forms, shall be offered in such amounts subject to the limitation imposed by section 757b of this title, and shall be issued in such manner and subject to such terms and conditions consistent with subsections (b), (c), and (d) hereof, and including any restrictions on their transfer, as the Secretary of the Treasury may from time to time prescribe."
5. Pursuant to this authority the Secretary of the Treasury, with the approval of the President, has issued United States Savings Bonds in series designated by a letter and by the calendar year of issue, each lettered series being offered by a formal circular of the Treasury Department. The bonds involved in this case and described herein are bonds of Series G-1942. The offering circular under which said Series G-1942 was issued was Treasury Department Circular No. 654, dated April 15, 1941 (6 Federal Register 6434).Said Circular No. 654 provided in part as follows:
"Par. II, 6. The bonds will not be transferable, and will be payable only to the owner named thereon, except in case of death or disability of the owner or as otherwise specifically provided in the regulations governing savings bonds, and in any event only in accordance with such regulations. Accordingly they may not be sold, and may not be hypothecated as collateral for a loan.
"Par. IX, 1. All savings bonds of Series F and Series G, issued pursuant to this circular, shall be subject to the regulations prescribed from time to time by the Secretary of the Treasury to govern United States Savings Bonds. The present regulations governing savings bonds are set forth in Treasury Department Circular No. 530, Fourth Revision, dated April 15, 1941, copies of which may be obtained on application to the Treasury Department, or to any Federal Reserve Bank."
6. The regulations in force at the time of the purchase of the Series G-1942 bonds here involved were contained in Treasury Department Circular No. 530, Fourth Revision, dated April 15, 1941 (6 Federal Register 2191), amended June 26, 1941 (6 Federal Register 3175), and subsequently amended on April 20, 1942 (7 Federal Register 2992).The regulations in force at the time of the death of William G. Garverich on October 23, 1942, and in force at the present time, are contained in Treasury Department Circular No. 530, Fifth Revision, dated June 1, 1942 (7 Federal Register 5158), amended November 23, 1942 (7 Federal Register 9772).In the respects here material the foregoing regulations are substantially identical.
7. Treasury Regulations, Department Circular 530, Fifth Revision (7 F.R. 5158), in § 315.4, provides three methods of registration: ...