Document: 364 U.S. 446 81 S.Ct. 191 5 L.Ed.2d 200 SMALL BUSINESS ADMINISTRATION, Petitioner,v.G. M. McCLELLAN, Trustee. No. 42. Argued Nov. 9, 10, 1960. Decided Dec. 5, Mr. Morton Hollander, Washington, D.C., for petitioner. John Q. Royce, Salina, Kan., respondent. Justice BLACK delivered the opinion of Court. 1 The Small Business Act 19531 created Administration to 'aid, counsel, assist, and protect insofar as is possible interests small-business concerns in order preserve free competitive enterprise * maintain strengthen overall economy Nation.'2 was given extraordinarily broad powers accomplish these important objectives, including that lending money small businesses whenever they could not get necessary loans on reasonable terms from private lenders.3 When a part, but all, loan can be obtained bank or other lender, empowered join lender making loan.4 basic question this case presents whether, when has joined borrower becomes bankrupt, Administration's interest unpaid balance entitled priority provided 'debts due United States' R.S. § 3466 64 Bankruptcy Act,5 even though agreed share any collected with bank. 2 That arises out joint bank-Administration $20,000 business, $5,000 having come funds $15,000 Government Treasury. Nine months later, an involuntary petition bankruptcy filed against by creditors. appeared proceedings upon petition, claim $16,355.69, amount then loan, interest, asserted its extent $12,266.75, 75 per cent debt. After hearing, referee denied ground 'legal entity' therefore 'privileges immunities States.' District Court, review, rejected which had relied concluded since bankrupt's note evidencing assigned until after commencement proceedings, debt priority.6 Court Appeals affirmed third ground—that Administration, contracted pay participating one-fourth distribution received, assert thus permit party benefit which, under Act, belongs alone.7 We granted certiorari consider Government's contention denial handicaps agency effective performance duties imposed it Congress.8 3 First. It contended correct holding separate legal entity governmental proceeding. rests supposed analogy between Sloan Shipyards Corp. v. States Shipping Board Emergency Fleet Corporation9 Reconstruction Finance J. G. Menihan Corp.,10 cases refused treat corporate agencies involved States. Neither those cases, however, controlling here. Shipyards, Corporation, organized laws Columbia pursuant authority Congress 'contemplated corporation persons might stockholders.'11 This fact alone enough distinguish Corporation contemplated beginning, gets all Our decision equally inapplicable only whether been endowed capacity sue sued, assessed costs connection suit brought. such would support purpose priority.12 Thus neither requires us hold lend States, must accorded time comes collect money. Under like circumstances we deny debts Farm Credit Dept. Agriculture, etc., Remund.13 As said there 'an integral part mechanism'14 what deemed national importance. And it, collecting made government funds. 4 Second. Respondent contends, held, assertion precluded our Marxen15 attaches owing date into existence date. But requirement Marxen fully met here virtue jointly nine prior bankruptcy. Since beneficial ownership three-fourths belonged immaterial formal assignment filing petition. Third. reiterated here, forfeited right otherwise have agreeing turn over because priority. By arrangement, urged, attempting 'to give party,' contrary principles announced Nathanson National Labor Relations Board.16 significantly different situation. There sought obtain back-pay claims belonging employees based their loss result allegedly discriminatory discharges bankrupt. Court's case, involving no financial justify where loaned by, to, later collects does mean lose Respondent's argument seems rest assumption deprived contract another creditor bankrupt who finds whatever 3466, Act. Section declares unequivocal language '(w)henever person indebted insolvent,' recognizes proceedings. sections simply it.17 Once placed Treasury, end achieved completely satisfied. At point, difference so received source and, money, may disbursed way sees fit, satisfaction obligations already incurred, long lawful. authorized enter contracts calculated induce banks make businesses.18 providing additional security at expense, well adapted end. Indeed, many participation loan. In acceptance respondent's more difficult perform statutory duties. Clearly did intend, very act imposing take away privilege 6 policy equality similar creditors expressed Act19 convincing. true allowance will place bank, unsecured creditor, better position than result, inequality court, bank's valid Administration. 7 Fourth. last contention, urged throughout inconsistent purposes provisions tends businessman borrow persons, respect, rather aids borrowers, conflicting Act's policy. Emory, same argument, reference Federal Housing debts, stating '(o)only plainest inconsistency warrant finding implied exception clear command 3466.'20 conclusion reached 8 error courts below refuse 9 Reversed remanded. 10 DOUGLAS dissents. 67 Stat. 232, amended, 15 U.S.C. §§ 631—651, U.S.C.A. 631—651. 232. 235—236. Ibid. 31 191, establishes general 11 104, provides established should fifth preferred 168 F.Supp. 483. 272 F.2d 143. 362 947, 80 859, 866. 258 549, 42 386, 66 L.Ed. 762. 312 81, 61 485, 85 595. page 565, 388. 12 proper scope recognized itself when, several years amended expressly except respect arising wartime activities. May 25, 1948, 62 261, 601 et seq. underlying amendment discussion Senate. Senator Buck stated follows: 'The committee believes RFC normal A provision included section eliminate specific war are designated therein.' (Emphasis supplied.) Cong.Rec., 80th Cong., 2d Sess., Vol. 94, Part 3, p. 4108. See also re Temple, Cir., 174 145. 13 330 539, 891, 893, 91 1082. 14 Id., 542, 893. 307 200, 59 811, 83 1222. 16 344 28, 73 80, 82, 97 23. 17 For history see State Bank, Pet. 29, 35—37, 308. Compare Board, supra, pages 27—28, 82—83. 18 236. 19 seq., 20 314 423, 433, 317, 322, 86 315. Remund, 544—545, 893—894; People Illinois ex rel. Gordon 328 8, 12, 841, 843, 90 1049.

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