
    No. 757
    WELTY v. UNITED STATES
    U. S. Appeals, 6th Circuit
    No. 4056
    Decided Nov. 5, 1924.
    465. ERROR—Refusal of District Court to definitely draw line of demarcation as to what law forbids and what is allowed under War Risk Insurance Act is ground for reversal.
    647. INSURANCE—War Risk Act interpreted.
    Attorneys—Marshall & Fraser, Toledo; and J. Henry Goeke and Harry O. Bentley, Lima, for Welty; George E. Reed, Toledo, and A. E. Bernsteen and M. A. McCormick, Cleveland, for United States.
   MACK, C. J.

Benjamin Welty was convicted and sentenced to imprisonment for one year and payment of a fine of $500 under an indictment charging a violation of See. 13 of the War Risk Insurance Act. By virtue of said act, “any person who shall directly or indirectly, solicit, contract for, charge, or receive any fee or compensation, except as herein provided........punishable by fine of not more than $500 or by imprisonment at hard labor for not mor.e than two years or by both.”

Welty being an attorney at law, it was charged, engaged in furnishing assistance as was required in preparation of necessary papers for the collection of the claim of compensation of one, Strayer, from the Bureau of War Risk Insurance. Strayer, it seems, became insane a few days after his arrival in camp and it was charged that Welty contracted to receive a fee of $1,274.64, in excess of the three dollars allowed by the foregoing Act.

It seems -that when the father of Strayer first made his claim for compensation it was refused on the ground that Strayer’s condition did not arise while in the service. Welty was applied to by the father and said Welty recovered compensation of which $1,274.64 was one third. Error was prosecuted from the judgment of the District Court and it was contended by the United States that Welty contracted to receive one third of the compensation if successful in securing it under the apt for his services, such payment to be made from the compensation so received.

Welty claimed that his employment was solely by and on behalf of the father, of one third of such sum as might be allowed the father because of the expenses incurred by him for his son plus any expenses to which Welty might be put in the matter. The Circuit Court of Appeals held:

1.There can be no question as to the constitutional power of Congress to regulate charges that may be made for services to be rendered to applicants for compensation under the War Risk Insurance Act.

2. As we interpret the statute it permits a charge of three dollars to the applicant himself for services in preparation and execution of the necessary papers, and prohibits any charge whatsoever to him for any additional services in the prosecution of the claim!

3. The vital question was whether or not Welty indirectly solicited or received compensation out of the funds that belonged to the insane applicant, or whether his dealings were entirely with and on behalf of the father and his compensation to be paid solely out of anything that the father might justly recover from the estate of his son.

4. It was therefore necessary that the jury be carefully instructed as to the sound interpretation of the act and that a clear line of demarcation be drawn between what was allowed and what was forbidden by the law. ' Such an interpretation was asked for by Welty and was refused, the trial judge being of the opinion that the language of the act spoke for itself and required no comment.

5. The contention of the government that the contract made by Welty, whether it was to come out of the reimbursement of the father or not, was still such a contract as was contemplated by Congress, within the meaning of the statute because it was an incentive to prosecute the claim for mercenary reasons and therefore against public policy, is not correct under interpretation of the statute. It but reinforces however, the propriety of Welty’s request to charge and refusal thereof was such error as compels a reversal of the judgment. Reversed and remnaded.  