Document: 382 U.S. 341 86 S.Ct. 500 15 L.Ed.2d 404 UNITED STATES, Petitioner,v.Ethel Mae YAZELL. No. 10. Argued Oct. 13, 1965. Decided Jan. 17, 1966. [Syllabus from pages 341-342 intentionally omitted] Sol. Gen. Thurgood Marshall for petitioner. Mr. J. V. Hammett, Lampasas, Tex., respondent. Justice FORTAS delivered the opinion of Court. 1 This case presents an aspect continuing problem interaction federal and state laws in our complex system. Specifically, question presented is whether, circumstances this case, Federal Government, its zealous pursuit balance due on a disaster loan made by Small Business Administration, may obtain judgment against Ethel Yazell Texas. At time was made, Texas law provided that married woman could not bind her separate property unless she had first obtained court decree removing disability to contract.1 Mrs. done so. all relevant times beneficiary peculiar institution coverture which now, with some exceptions, relegated history's legal museum. 2 The impact quaint doctrine upon treasury therefore little consequence. Even gave rise difficulty repealed 1963.2 amount controversy extensive litigation, about $4,000, important only family. But implications are no means minor. Using Clearfield Trust Co. v. United States, 318 363, 63 573, 87 L.Ed. 838, as base, Government here seeks occupy new ground inevitable conflict between interest law. rebuffed trial appellate courts. We hold rule governs, and, accordingly, we affirm decision States Court Appeals Fifth Circuit, 334 F.2d 454.3 3 Reference detail facts will illuminate problem.4 Delbert L. operated Texas, small shop sell children's clothing. called Yazell's Little Ages. Occasionally, his wife, Mae, assisted business. business, under law, community husband who, however, were barred statute forming partnership. Dillard Smith, 146 Tex. 227, 230, 205 S.W.2d 366, 367. A disastrous flood occurred Lampasas May 12, 1957. stock Ages ruined. Its fixtures seriously damaged.5 4 Administration regional office Dallas, As December 31, 1963, agency outstanding generally supervision Dallas office, 1,363 business loans 4,172 loans, aggregating more than $60,000,000.6 Upon occurrence flood, SBA opened Disaster Loan Office direction office.7 5 On June 10, 1957, conferred representative enable him cope After careful, detailed but commendably prompt investigation, head SBA's wrote 20, authorization $12,000 been received. informed would be compliance certain requirements. He told named firm employed assist complying terms authorization.8 6 wife 'doing as' then signed note $12,000, payable order at rate $120 per month including 3% interest. same day they also executed chattel mortgage their merchandise store fixtures. By express reference Article 4000 Revised Civil Statutes exempted coverage retail sales stock. accompanied acknowledgment before notary public, required part coverture. attested, words applicable statute, 'Ethel Yazell, * whose name subscribed (chattel mortgage) having examined me privily apart acknowledged such instrument act deed, declared willingly *.' See Tex.Rev.Civ.Stat.Ann. Art. 6608. 1300, 4618 (Supp.1964), 6605. These statutes relate conveyances marital homestead. 7 note, accompanying documents course sent SBA. Both engaged Acting Regional Counsel certified 'all action has taken deemed desirable assure validity enforceability Note.' Thereafter, funds available pursuant loan.9 8 From foregoing, it clear (1) individually negotiated painfully particularized detail, (2) specific set forth above. None prior cases decided held override resembles these respects; differences intensely material resolution issue presented. 9 Next, seems aware chargeable knowledge contract subject coverture; both Yazells entered into without any thought defense unavailable respect law; (3) that, circumstances, seeking unconscionable advantage recourse assets did bargain. points briefly elaborated reach ultimate issue: despite 'federal interest' requires us give advantage. 10 It noted transaction custom-tailored officials located undoubtedly familiar twice approved counsel who desirable' even though effort cause have incapacity removed law.10 In least two decisions since 1949, courts applied actions statutes.11 does appear slightest suggestion or SBA-appointed intended enforce property.12 forms used, although specifically adapted intent, either probable intent existed. stated above, now 5,000 Texas.13 Solicitor General SBA, conformity general practice government lending agencies, signature routine matter.14 If result sought obtain, simple fairness well elementary craftsmanship dictated agreement advised, formal notation, was, binding property, contrary. Again, must emphasized custom-made, handtailored, transaction. nationwide emanating single form source.15 11 come basic Is there collecting deficiency warrants overriding coverture? Undeniably always collect moneys lends. put position levy execution if any, unpaid after sold, other leviable exhausted. desire understandable. Perhaps loan, zeal representatives commended. serves merely present question—not answer it. Every creditor respect; every wants collect.16 sovereign, preferences priorities,17 neither Congress nor ever asserted absolute. For example, contention can judicial fiat total disregard homestead exemptions.18 Accordingly, generalities paramountcy do lead inevitably seeks. Our remains: whether connection individualized, contract, preferred right regulation, bargain, dealing local interests family protection (whether up-to-date welcome) women. 12 asserts found unlimited choose persons whom citing Perkins Lukens Steel Co., 310 113, 60 869, 84 1108, remote hand.19 Realistically, nothing problem: reopen flood. chose contractors limited That deter them. 'chosen' contractor sense liable presumably said so, proceeded formalities necessary removed.20 reality, assertion involves beneficiaries cannot determine us.21 call strike shackles obsolete hands beneficent summons battle vindicate rights much mundane commercial these. voluntarily deliberately make capacity liability contracts, thereafter insist, limitation, (a) contrary relating liabilities, (b) absence regulation provision indicating disregarded. 13 obsolete. events case. exists, modified form, Michigan.22 Government's brief tells limit degree women contract.23 California, limitations wife's responsibility ingenious, complex, highly purposeful distribution geared designed efficient management joint each spouse.24 appropriate inference debt, arrangements congressional enactment stipulation warning contracts.25 14 consider constitutional power direct legislation26 administrative coupled suitable implementing agency.27 decide Court, action, should situation implementation overiding particular involved here. theory precedents teach solicitude interests, particularly field family-property arrangements. They overridden where substantial National served consistently suffer major damage applied. Each State There reason breaching invent one impose personal distaste provisions those Nor establish principle might cast doubt effectiveness types suits contractual positions women, which, warns us, affected Clearly, justifies invading peculiarly jurisdiction laws, subtleties reflected various reflect carefully evolved serve multiple purposes. 16 compel embrace Government. devised superseding arising contract. permitted imposition enforcement person according competent overrode province arrangements.28 17 Court's applying law' supersede typically programs nature uniform character throughout Nation. leading remedial paper. Allegheny County, 322 174, 64 908, 88 1209, treated involving taxes.29 D'Oench, Duhme & Deposit Ins. Corp., 315 447, 62 676, 956, FDIC insurer-assignee bank maker given secret understanding payment. deposit insurance program standardized. aspects, explicitly law.30 entitled protecting misrepresentations financial condition banks insures, accomplished inconsistent policy statutes. 18 hand, type most closely resembling problem, invariably observed. Fink O'Neil,106 272, 325, 27 196. defined execution. § 916, Rule 69 Rules Procedure, governed, States' remedies judgments law.31 exemptions vary widely. diversity rules limitation comparable limitation.32 purpose obviously related.33 Another illustration acceptance divergent limiting afforded Reconstruction Finance Corp. Beaver 328 204, 66 992, 90 1172. classification owned Corporation 'real property' tax purposes prevail determining within class waived exemption taxation. 19 Generally, right, insisted being 'adopted' rule. pointed out possible 'adopt,' operative 'federal' differing different depending takes place.34 20 Although unnecessary apply ex proprio vigore law—or 'adoption' principle, govern. need uniformity. fact, transactions great law.35 defensible unless, indications O'Neil elsewhere forth, take regardless limits however domestic be. 21 below affirmed. 22 Affirmed. 23 HARLAN, concurring. 24 I join qualification, namely, place reliance particularities negotiations parties respecting loan. my view conclusion governs amply justified appraisal competing stake, irrespective 25 BLACK, DOUGLAS WHITE join, dissenting. 26 Because think dissenting Judge Prettyman gives accurate picture issues because agree reached reasons he gave, dissent adopt own. 'Mrs. husband, trading partnership, borrowed money through Administration. signed, security store. pay, foreclosed security. remained. sued praying moved summary affecting estate rendered her, few exceptions material. District judge agreed so brethren court. am contrari-minded. 28 'A matter governed subject, fashion holding States.1 29 'To effectuate Act, many hundreds thousands dollars year businesses country. conditions reasonably repayment.2 Act 30 application govern contracts too features contracts. Chaos nullify relief arise. And restrict Act. necessarily equal force individuals. multitude frustrated 31 'It get back. lawsuit involve debt; obligation repay borrows horse neighbor ought back owner back, borrower woman. suppose nullifying repayments tends minimize ill-advised borrowing. you what borrow. 32 Helz3 correctly Though Prettyman's enough justify rejection 'coverture' add another reason, itself me. 'coverture,' adopted judges State's legislature largely abandoned, rests old common-law fiction one. worked reality mean one, husband. rested supposed today completely discredited notion woman, female, own say 'discredited' reflecting vast number engaging professions medicine, teaching, plain ventures was. unique 1966 exalt archaic remnant primitive caste system honored among States. 4626. section, amended Acts 58th Leg., p. 1188, c. 472, 6, wives Under 4626 removed. 1, supra. vote affirmed favor based instituted recover approximately secured mortgage. wife. foreclosed, pledged action. No appeal discussion follows, indicated 'SBA file,' occasionally referred official file supplement record disclose agency's practice. file. Brief 12. Belt, F.Supp. 510 (D.C.S.D.Tex.) (suit coverture); Water Supply 204 190 (C.A.5th Cir.) (case exception coverture). Ninth Bumb 276 729 (C.A.9th Cir.), aptly observed response claim 'need uniformity' excused California 'bulk sales' requiring notice mortgage: true operates fact raises presumption desirability mortgages pursuance largeness offers excuse failure comply reasonable requirements protect creditors undisclosed debtors impair value claims. assumed maintains personnel states conducts advised steps acquire valid states.' Id., 738. 11. Contrast 838. Compare Helz, 314 301 (C.A.6th Housing 48 Stat. 1246, U.S.C. 1702 et seq., negotiate individual applicants. View Crest Garden Apts., Inc., 268 380 cert. denied, 361 884, 80 156, 120. Yazells' collected 20% preference debts owed delinquencies. §§ 6321, 6323 (1964 ed.); 104(a)(4) ed.). 191 ed.) provides priority situations ordinary debts. Kennedy. Relative Priority Government: Pernicious Career Inchoate Lien, Yale L.J. 905 (1954). pp. 354—356, infra. relies Perkins, 127, 876, proposition 'the unrestricted deal.' 9. declaring private companies alleging potential bidders lacked standing challenge procurement include minimum wage stipulation. quotes context, omitting following italicized words: 'Like individuals businesses, enjoys deal, fix needed purchases.' subscribe proposition—indeed, brunt entering 'like businesses.' worth noting arise—where loan—the expressly property. 4614. Mich.Stat.Ann. 26.161, 26.181, 26.182, 26.183. Koengeter Holzbaugh, 332 Mich. 280, 50 N.W.2d 778; Weingarten, Creditors' Rights, Wayne L.Rev. 184 (1963). 15, n. are, addition Michigan: Alabama, Arizona, Florida, Georgia, Idaho, Indiana, Kentucky, Nevada, North Carolina. With Michigan, see 22, supra, none full Cal.Civ.Code 158. Her debts, earnings. 167, 171. However, California's governing control (Supp.1964) 172, 172a, 167. Ariz.Rev.Stat.Ann. 25—214; Nev.Rev.Stat. 123.230. argument, accepted doubt, addition, preventing conveying realty consent husbands—see, e.g., Ala.Code Tit. 34, 73; Fla.Stat.Ann. (Supp. 1964) 708.08; Ind.Ann.Stat. 38—102; Ky.Rev.Stat. 404.020 (executory contract); N.C.Gen.Stat. 52—2—or acting guarantors sureties—see, Ga.Code Ann. 53—503; 404.010. See, Bess, 357 51, 78 1054, 1135, satisfy liens 3691 Internal Revenue Code 1939 (now 6334) exclusive exemptions. Shimer, 367 374, 81 1554, 908 (Pennsylvania precluding mortgagee buys mortgaged foreclosure scheme Veterans regulations issued). contrary, De Sylva Ballentine, 351 570, 76 974, 100 1415, define 'children' arose renew copyright—a area. Cf. 1172; Commissioner Stern, 39, 1047, 1126. regard Wissner Wissner, 338 655, 70 398, 94 424, exception. half husband's life premiums (his earnings), derogation statutory soldiers absolute Service Life Insurance. directly undercut generalized, program. movable machinery manufacturer ad valorem renting enhancement realty. title effective taxes. compare Insurance 873, 1811 seq. Custer McCutcheon, 283 514, 51 530, 75 1239. procedure shall 'in accordance district except extent applicable.' cases, 26, question, Harpootlian, 646 (C.A.2d (applying examination debtor returned unsatisfied, over objection improper sovereign); Miller, 229 839 (C.A.3d prohibition garnishment future garnishee debtor). exempt $5,000, designation improvements, 3833; Tex.Const., 16, 50, 51. Tennessee Maine, $1,000, Tenn.Const., 11, 11; Me.Rev.Stat.Ann. 14, 4551, 4552; $15,000 family, $7,500 others, 1240, 1260 (Supp.1964); cf. Cal.Const., 1. able defeat suit far greater happened reside Maine; Californian better Yazell. Other similarly. Maine provide homestead, furniture, cemetery lot, implements husbandry, tools books trade, library pictures, five cows calves, mules, horses, wagon, carriage, gun, hogs, sheep, harness, forage home consumption, current wages, clothing, goats, chickens, turkeys, ducks, geese, guineas, dog. somewhat less list constituents Tex.Rev.Stat.Ann. Arts. 3832, 3835. 4401; Cal.Civ.Proc.Code 690—690.52 (1955 ed. Supp.1964). special protections, ferrymen, saving them ferryboat tackle, 3836. 33 64, adopting provisional advance judgment, kind 69. DeBeers Consolidated Mines, Ltd. 325 212, 65 1130, 89 1566. greatly. Moore's Fed.Prac. 64.04(3). 34 'In choice selected law.' 367, 575. persuasive argument Ibid. exists here, course. Royal Indemnity 313 289, 61 995, 85 1361, cited authorized determined law,' 7, while insisting recovered damages delayed payment controlled common U.S., 296, S.Ct., 997, nonetheless prevailing undertaken performed adoption Board Commissioners Jackson County 308 343, 285, 313. 35 Financial Assistance Manual SBA—500, replete admonitions follow carefully. Thus 401.03 reads: 'Compliance Applicable Laws. When disburses funds, exercising function duties rather frequently necessary, obtaining marketable enforceable procedural care used meeting located, filing refiling, recording re-recording documents.' also, 401.06, 402.04, 403.03, 404.01, 404.02, 406.02, 407.03, 407.04 ('State dominion lender exercise assigned accounts receivable. drafting servicing *.'), 408.01, 410.08 ('In guard Agency's standard clause makes liable, director 706.01. Section 1008.03 authorizes Director instances area distantly speed economy administration advisable,' recommend 'local appointed rely matters closing opinions.' CFR (1965 Supp.) 122.17. ' 838 (1943). 636(a)(7); C.F.R. 120.4-2(c) (1958). '314 Sixth Circuit applies it.' 454, 456.

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