Wallberg v. Utah Public Welfare Commission , 115 Utah 242 ( 1949 )

This proceeding was commenced under our "Declaratory Judgment" statute. It involves our Public Assistance Act of 1947, L. of U. 1947, ch. 89, page 374, as amended by L. of U. 1948, First Special Session, Ch. 9, p. 14. More particularly it is addressed to Section 19 of that act as amended, commonly known as the "Lien Law." The matter was tried to the lower court on a stipulated set of facts. That court declared that Section 19, as amended, contravened our State Constitution, Article I, Section 24, and the Federal Constitution, Section 1 of the 14th Amendment. Apparently the ground for this declaration was that a husband, whose wife lived with him, could not secure aid if his wife refused to sign away her statutory rights to her husband's property; but a husband whose wife did not live with him, might secure aid without his wife's signing her rights away, even though the wives' interest in their husband's property are comparatively speaking, the same.

We quote Section 19, as amended, inviting attention to the fact that the lien is limited to real property:

"Every County Welfare Board shall require as a condition to granting assistance to any old age recipient, that all real property or interests in real property belonging to the applicant shall be pledged to the Board as a guarantee for the reimbursement of assistance received; provided, however, at the time said lien is satisfied there shall be a $300.00 assessed valuation exemption which shall represent or equal a cash exemption value of $750.00.

"To evidence such pledge the county board shall require each applicant to enter into agreement in form approved by the State Department duly acknowledged so as to entitle it to be filed of record in the office of the County Recorder by which the applicant shall acknowledge and agree that such property has been assigned as security for the reimbursement of all assistance thereafter received by him.

"If the applicant is a married man his wife shall be required to become a party to such agreement for the purpose of releasing her statutory right in such property and such release and joinder shall be as valid and effectual to release such statutory right as if she had joined the applicant in the conveyance of the property to a third person; provided, that when it appears to the County Board that the applicant is living apart from his wife and her joinder cannot be obtained, the agreement signed by the applicant alone may be accepted under such regulations as the State Department may prescribe.

"Upon making a grant of old age assistance the Board shall forthwith file with the County Recorder of the county in which the applicant resides and with the County Recorder of any other county in which the applicant owns real property, a verified copy of such agreement to reimburse and the filing of the same shall have the same effect as a lien by judgment on any real property in which the applicant has any title or interest. All such real property shall from the time of filing of such copy of agreement be and become charged with a lien for all assistance received by the applicant as herein provided, which lien shall have priority over all unrecorded encumbrances. All such instruments shall be recorded in a special lien book kept for such purposes and no fees or costs shall be paid for such filing or recording.

"(b) Upon the request of a recipient the Board shall execute and file with the county recorder a certificate in form approved by the State Department certifying as to the amount of assistance given the recipient to the date of such certificate. The amount so certified shall constitute the entire claim as of the date of such certificate against the real property of the recipient, and any person dealing with the recipient may rely upon such certificate as evidencing the amount of the existing lien against the real estate of the recipient.

"The County Board shall seek foreclosure of the lien on a recipient's property when the property is transferred to a third party prior to the recipient's death.

"Upon the death of any recipient the County Board shall present a verified claim for the total amount of all assistance given the recipient to the executor or administrator of the estate of such decedent and the same shall be allowed, approved, filed and paid as other claims in the administration of the estate of such decedent.

"All moneys received from such estates or from the foreclosures of such lien shall be reported promptly by the Board receiving the same to the State Department and the proportion of such money which was paid to the recipient from state funds shall be remitted forthwith to the State Department.

"The State Department shall certify promptly to the State Auditor a statement of the amounts received from such recipients or from their estates and deposit such collections with the State Treasurer. The Federal Government shall be entitled to and shall be paid a share of such collections equal to not more than one-half of the amount collected, if required as a condition to federal financial participation, and this amount shall be certified by the State Department to the state auditor and treasurer.

"The County Board shall be empowered to accept voluntary conveyance of real property in lieu of assuance of execution. All real property acquired by the Welfare Board under the provisions of this act may be disposed of by public or private sale under such rules and regulations as may be prescribed by the State Department. The County Board is authorized to execute and deliver any and all documents necessary to convey title to any and all such property as may have come into its possession to a purchaser of such property as though such board constituted a corporate entity.

"Effective as of July 1, 1947, all old age recipients and all those subsequently applying for assistance who are not exempt as hereinbefore provided, shall be required to enter into agreements to reimburse as hereinabove provided as a condition precedent to receiving any assistance under this act but such agreements shall constitute a charge and lien only for assistance subsequently rendered and not for assistance rendered prior to the execution of such agreements.

"(c) All records relating to the administration of public assistance shall be regarded as confidential and shall be protected against misuse by rules and regulations established by the Public Welfare Commission which shall have the same force and effect as law. Any person who violates the confidential nature of public assistance records as provided herein or by the rules and regulations of the Public Welfare Commission, or who assists anyone else in such violation, shall be judged guilty of a misdemeanor and shall be fined not more than $300 or shall be imprisoned for not more than sixty days, or both.

"Neither the provisions of this Section or the rules and regulations of the Public Welfare Commission shall prohibit the State Department of Public Welfare or the County Department of Public Welfare from publishing or causing to be published such statistical material or other information of general character as Welfare Commission may consider to be of public interest. The applicant or recipient and his attorney shall at all times have the right to inspect his application or other personal records after they have been filed."

The facts of this case, as they were stipulated in the lower court, are:

Plaintiffs (respondents) are both over 70 years of age. They maintain a family home in Salt Lake City, having an assessed valuation for the year 1947 of $645, and a reasonable cash valuation of $1200. There is no question about their being entitled to assistance under the act. Section 4 of the act sets out the rules for determining those to whom assistance shall be given. We quote that section, inviting attention to the clause "exclusive of the home owned and occupied by the applicant or recipient":

"Public assistance shall be provided under this act to any needy individual in the State who does not have sufficient resources actually available for his use, to maintain a minimum standard of living compatible with health and well-being. Ownership of money or other tangible property or its equivalent in real or personal property, exclusive of the home owned and occupied by the applicant or recipient, and the furniture and furnishings therein up to but not to exceed $300.00 for an individual living alone or $600.00 for two or more persons living together as a family unit, and life insurance policies up to but not to exceed $500.00 in aggregate cash value for an individual living alone or $1000.00 for two or more persons living together as a family unit, shall not disqualify an applicant or recipient from receiving assistance under this act; provided, that the income from such property, together with any other income or resources actually available to the applicant or recipient be insufficient to provide him with a minimum subsistence compatible with health and well-being. The Public Welfare Department may grant public assistance on a temporary basis to an applicant or recipient owning or possessing personal or real property or life insurance in excess of the amounts designated herein if and when in its discretion such action will be for the best interest of the recipient and the State. The provisions of this section shall apply to payments from the effective date of this act."

Applicants were notified in April of 1948, that it would be necessary for them to sign an affidavit declaring their real and personal property and that they would be required to sign a lien on their real property. This was done pursuant to a bulletin from the Utah Public Welfare Commission (No. 197) dated March 30, 1948. The bulletin indicated to the County Welfare Boards that lien agreements had to be signed before the recipient of assistance would be given his assistance check for June, 1948.

The plaintiffs, being in need of assistance, did in fact sign the lien agreement and made their affidavits, and received and are now receiving old age assistance.

Is Section 19 unconstitutional?

It is argued on behalf of the constitutionality of the act that there exists no inherent right to public assistance which is legally enforceable (41 Am. Jur. 707); that such right is at best only a statutory right. (See: Bila v. Young, Cal.App., 1942, 120 P.2d 904; Kelley v. State Board of Social Welfare, 1947,82 Cal. App. 2d 627, 186 P.2d 429; Colorado Public Welfare Board v. Viles, 105 Colo. 62, 94 P.2d 713); and that as it is only a right which may be conferred by the Legislature, the Legislature may impose such conditions to the granting of that relief and assistance as it sees fit.

Respondents concede the general rule to be that the existence of the right is dependent upon statutory authorization. They contend that the legislature, by the Public Assistance Act of 1947, established the right to assistance, and in consequence there does exist a legally enforceable statutory right in anyone who comes within the classification, and meets all requirements which may be constitutionally imposed. In support of this claim they refer the court to the case of People ex rel. Heydenreichet al. v. Lyons, 374 Ill. 557, 30 N.E.2d 46, 132 A.L.R. 511, where the court recognized the right of a would be assistance recipient to challenge a residence requirement; and SacramentoOrphanage Children's Home v. Chambers, 1914, 25 Cal. App. 536,144 P. 316, where a residence requirement was allowed to be attacked and held unconstitutional in a case involving aid to orphans.

It should be kept in mind that the issue we are discussing here is not that of one group being entirely excluded from the law and another not; but that the controversy is as to restrictions imposed on one class of a group all of whom are within the operation of the law.

The appellants of course contend that the conditions imposed by the original act and the 1948 amendment (Sec. 19) are valid and that there is a reasonable basis for the discrimination. The respondents contend that there is an unfair discrimination — that no power existed in the legislature to require the signing of a lien by owners of real property whereas no provision is made for a like repayment on the part of (1) persons acquiring money after having been paid assistance; or (2) people acquiring other property after having received assistance. In other words, it is contended by the respondents, that if the Statute had required reimbursement to the state out of all assets of the estate of a decedent who has received assistance, then this would be constitutional (See the Idaho case of State ex rel. Nielson v.Lindstrom, Idaho, 191 P.2d 1009); but that a law which allows all who have subsequently acquired property or money to escape repaying, while requiring those who owned real property at the time of receiving assistance to give a lien upon that property amounts to an unfair discrimination.

This argument is advanced together with that which apparently was the foundation of the lower court's decision — that is a discrimination as between married men whose wives refuse to sign their rights away.

Before entering upon a discussion of legal principles applicable to this case, let it be mentioned that we are not concerned with a comparison between the applicant who owns real estate, not used as a home, of a value of $300 with the applicant who owns personal property of $300 in value — a comparison made by respondent. It is true that the real estate owner has to sign a lien; but that lien means nothing as the value of the real estate does not exceed his real estate exemption (see Sec. 19). If it did exceed his exemptions, then he would be cut off from the rolls as not being a needy person, and could not be in the position of collecting money from the state he did not have to pay back. It seems clear that the real question is found in the situation of the home owner, whose property exceeds the exemption value.

Upon the general question of unconstitutionality by reason of discrimination we have several pronouncements of this court, but not involving such a factual situation as is here presented. In the case of Lyte v. District Ct. of SaltLake County, 90 Utah 369, at page 375, 61 P.2d 1259, at page 1262, petition for rehearing denied, 90 Utah 377,62 P.2d 1117, this court said:

"* * * The law is well established that the Legislature has authority, within constitutional limitations, to make classifications when and only when the classification rests upon some ground of difference having a fair and substantial relation to the subject of the legislation."

In State v. Mason, 94 Utah 501, 78 P.2d 920, 923, 117 A.L.R. 330, this court considered the matter of unconstitutionality of an act of the legislature on the ground of unreasonable discrimination, and announced the following principles:

"* * * to be unconstitutional the discrimination must be unreasonable or arbitrary. A classification is never unreasonable or arbitrary in its inclusion or exclusion features so long as there is some basis for the differentiation between classes or subject matters included as compared to those excluded from its operation, provided the differentiation bears a reasonable relation to the purposes to be accomplished by the act. * * *

"In order to see whether the excluded classes or transactions are on a different basis than those included, we must look at the purpose of the act. The objects and purposes of a law present the touchstone for determining proper and improper classifications.

* * * * * "It is only where some persons or transactions excluded from the operation of the law are as to the subject matter of the law in no differentiable class from those included in its operation that the law is discriminatory in the sense of being arbitrary and unconstitutional. If a reasonable basis to differentiate those included from those excluded from its operation can be found, it must be held constitutional."

The above quotations from the Mason case are also quoted with approval by this court in the case State v. J.B. R.E.Walker, Inc., 100 Utah 523, 116 P.2d 766.

We look then to the objects and purposes of the present statutory enactment to establish the propriety of the classification.

The over-all purpose of the Public Assistance Act is stated in Section 3 thereof to be:

"* * * to provide that access to public assistance shall be available to any person in Utah who is in need."

"Need" is defined:

"* * * A person is in need and entitled to public assistance if he does not have sufficient resources available for his use within the limitations set forth in this act, and who otherwise qualifies as hereinafter set forth, to maintain a minimum standard of living compatible with health and well-being."

Sections 6, 7, 8 and 9 (as amended) respectively define old age assistance, aid to the blind, aid to dependent children, and general public assistance. Sec. 19 (quoted above) relates to recipients of old age assistance.

Sections 3 and 4 (quoted previously) establish the class entitled to aid, as all needy persons. This classification is further broken down into three separate classes of needy persons (sections 6, 7, 8 and 9 above) — old age, blind, dependent children, and one general category designed to embrace all other needy persons.

Section 19, however, subdivides one of the separate classes of needy persons (old age) into (1) persons having real estate, and who are required to sign a lien pledging all real property owned by them, and (2) persons having no real property and who hence are not required to sign a lien.

Subdivision (1) (above) of Section 19 has a further qualification: The wife of an applicant living with him shall be required to become a party to the lien agreement for the purpose of releasing her statutory right in such property, but if the wife lives apart from the husband, and refuses to sign, then in that event the agreement signed by the husband alone may be sufficient.

It seems clear, that the legislature in exempting the "home owned and occupied by the applicant" (see Section 4) had in mind that it would be unwise and against public interest to require home owners to dispose of their real property and reduce their possessions to $300 before they would be entitled to aid. Persons who are home owners may be as needy as any other group, yet by the $300 valuation limitation taken alone, they would be precluded from assistance. However, their home property may be worth several thousands of dollars and, if assistance is tendered to them, and they are not required to reimburse the state, then they have a tremendous advantage over persons owning personalty in excess of $300 or realty in excess thereof other than home premises. These latter would be disqualified to receive assistance; the home owner would not. It seems reasonable to say that the purpose of this lien is to put them on an equal footing as to right to receive and yet, in the interest of public policy, not compel the home owner to dispose of his home — that is, not put himself out in the street. If a home owner desires to dispose of his property, the grantee may rely upon the certificate called for by section 19 as to whether or not the lien exceeds the exemption.

The objection is raised that a person having no property and thus not required to sign the lien is not required to pay for past aid received even though he may subsequently receive either money or property equal to the value of the property owned by the old age recipient who owns a home, and has been required to sign a lien. But this again overlooks the fact that during the time each is receiving relief, they are not on an equal financial footing. From a purely financial point of view the home owner should not receive relief, if his property exceeds the valuation exemption but the State, recognizing that to compel him to dispose of his home, would be very much against public interest, seeks to place them on the same level by compelling the one in the advantageous position to pay back out of that home, all in excess of the exemptioned evaluation. In fact, the home owner, rather than being discriminated against, is in a favored position. It is to the public interest that home owning be encouraged. The object of the law is not reimbursement to the state, but rather to give aid to all needy persons. Present need is the test, and when such persons acquire property and change their status, the law provides for maintaining that equality, if they are still entitled to aid. If by virtue of acquisition of wealth a person no longer needs aid, it should not be the policy of the law to take this away from him and keep him in need of assistance.

Since the classification under the Public Assistance Act of 1947 as amended, as it applies to old age recipients, has a reasonable basis for differentiation between the two classes — real property owners, and nonowners — the act is constitutional so far as classification is concerned.

Our examination of the application of the Act indicates that this is a general law and thus does not come within the purview of Article VI, Sec. 26, par. 10 of the Utah Constitution forbidding special laws changing descent and distribution in any event, although it is questionable that it would come within the provision even if it were a special law — another point raised by respondents.

It is contended that the Act is unconstitutional because of the provision in Section 19, that if an applicant is married, and his wife is living with him, then the wife shall be required to become a party to the agreement for the purpose of releasing her statutory right in such property, whereas, if the applicant is living apart from his wife and she refuses to sign, then in that event the agreement signed by the applicant alone may be accepted subject to such regulations as the State Department may prescribe. The contention is made that this portion of Section 19, is unlawfully discriminatory as between the two husbands, and also as between the two wives. As between the wives it is contended that since the wife not living with her husband need not sign and can preserve her statutory right, she is given an advantage over the wife who must sign in order that her husband receive assistance, and releases her statutory rights. As between the husbands, it is contended that the husband whose wife lives with him and refuses to sign is discriminated against in that he cannot receive assistance at all, and thus his right to assistance is controlled by the whim of a third person.

In determining the reasonableness or unreasonableness of this provision we cannot divorce ourselves from the practical situation under which this or any other similar type act must operate. It is the ordinary circumstance that where parties are married and living together both are participating in the benefits of any income brought into that unit. So also with old age assistance. In the vast majority of instances the benefits of payments to the recipients will almost of a certainty be shared in equally by the wife, and to require the wife's signature under such circumstances to provide for operation of the lien without interference by her statutory rights is clearly proper, otherwise the effectiveness of the lien will be greatly impaired.

The Legislature has viewed realistically the possibilities where the husband and wife do not live together, and where the husband cannot secure the wife's signature, and has provided an exception within the control of the state department to provide for such contingencies. In the instance of the two living together, the wife is participating and is a part of the unit, and ordinarily there is harmony between the parties and a division of the benefits between them. Presumably the signature of the wife is obtainable. In the other case, however, where the parties are living apart, there is usually disharmony. The wife will not be sharing in the benefits, and the positions of the parties are such that the husband will be unable to secure the wife's signature. It seems rather obvious then that there are reasonable grounds for making a distinction between the two.

Respondents advance the argument that this act is a loan of credit forbidden by Article VI, Section 31, of the Utah Constitution. With this we cannot agree. See: State ex rel.Nielson et al. v. Lindstrom, Idaho 1948, 191 P.2d 1009;City and County of San Francisco v. Collins, 216 Cal. 187,13 P.2d 912; Bowman v. Frost, 1942, 289 Ky. 826,158 S.W.2d 945. The object to be realized by the act is aid to needy persons over the age of 65 years, and the lien provision provides a means to equalize that aid in the best possible manner. If money can be given to the aged in the interest of public welfare, it is hard to see how doing less than that — loaning it to them, is bad. The purpose of the acts to uphold the State's moral obligation to look after its needy. This is its public purpose. The following quotation from 21 R.C.L. 701, quoted with approval in Bowman v. Frost, supra, is illustrative of this moral obligation and public duty:

"The care of the state for its dependent classes is considered by all enlightened people as a measure of its civilization, and the care of the poor is generally recognized as among the unquestioned object of public duty, but in spite of this, the duty under the common law was purely moral and not legal. There is therefore no legal obligation at common law on any of the instrumentalities of government to furnish relief to paupers. The obligation to support such persons results only from statute. The reason for this seeming barbarity of the common law was that matters of charity were thought more appropriate for the church."

We hold the act to be constitutional and enforceable. Judgment of the lower court is reversed.

Each party to bear his own costs.

LATIMER, J., concurs.