Source: https://www.legalcrystal.com/case/97069/fha-vs-burr
Timestamp: 2019-04-18 19:17:21+00:00

Document:
1. Under the National Housing Act, as amended, which provides that the Administrator shall, in carrying out the provisions of certain of its titles, "be authorized, in his official capacity, to sue and be sued in any court of competent jurisdiction, State or Federal," the Federal Housing Administration is subject to be garnished, under state law, for moneys due to an employee; but only those funds which have been paid over to the Administration in accordance with § 1 of the Act and which are in its possession, severed from Treasury funds and Treasury control, are subject to execution. Pp. 309 U. S. 249 -250.
2. Waivers by Congress of governmental immunity from suit in the case of such federal instrumentalities should be construed liberally. P. 309 U. S. 245 .
3. The words "sue and be sued," in their normal connotation, embrace all civil process incident to the commencement or continuance of legal proceedings. Garnishment and attachment commonly are part and parcel of the process provided by statute for the collection of debts. P. 309 U. S. 245 .
289 Mich. 91, 286 N.W. 169, affirmed.
Certiorari, 308 U.S. 541, to review the affirmance of a judgment against the Federal Housing Administration in a garnishment proceeding.
of his death $71.11. Its answer further asserted that it was "an agency of the United States Government, and is therefore not subject to garnishee proceedings." On motion of respondent, judgment was entered against petitioner for the amount of its indebtedness to Brooks, and execution was allowed thereunder. On appeal to the Supreme Court of Michigan, that judgment was affirmed.
"The Administrator shall, in carrying out the provisions of this title and titles II and III, be authorized, in his official capacity, to sue and be sued in any court of competent jurisdiction, State or Federal."
Since consent to "sue and be sued" has been given by Congress, the problem here merely involves a determination of whether or not garnishment comes within the scope of that authorization. No question as to the power of Congress to waive the governmental immunity is present. For there can be no doubt that Congress has full power to endow the Federal Housing Administration with the government's immunity from suit or to determine the extent to which it may be subjected to the judicial process. Federal Land Bank v. Priddy, 295 U.S.
229; Keifer & Keifer v. Reconstruction Finance Corp., 306 U. S. 381 .
As indicated in Keifer & Keifer v. Reconstruction Finance Corp., supra, we start from the premise that such waivers by Congress of governmental immunity in case of such federal instrumentalities should be liberally construed. This policy is in line with the current disfavor of the doctrine of governmental immunity from suit, as evidenced by the increasing tendency of Congress to waive the immunity where federal governmental corporations are concerned. Keifer & Keifer v. Reconstruction Finance Corp., supra. Hence, when Congress establishes such an agency, authorizes it to engage in commercial and business transactions with the public, and permits it to "sue and be sued," it cannot be lightly assumed that restrictions on that authority are to be implied. Rather, if the general authority to "sue and be sued" is to be delimited by implied exceptions, it must be clearly shown that certain types of suits are not consistent with the statutory or constitutional scheme, [ Footnote 3 ] that an implied restriction of the general authority is necessary to avoid grave interference with the performance of a governmental function, or that, for other reasons, it was plainly the purpose of Congress to use the "sue and be sued" clause in a narrow sense. In the absence of such showing, it must be presumed that, when Congress launched a governmental agency into the commercial world and endowed it with authority to "sue or be sued," that agency is not less amenable to judicial process than a private enterprise under like circumstances would be.
against a public body though it may "sue and be sued" [ Footnote 9 ] are not persuasive here, as they reflect purely local policies concerning municipalities, counties, and the like, and involve considerations not germane to the problem of amenability to suit of the modern federal governmental corporation.
Our conclusion is strengthened by the legislative history of the many recently created governmental agencies or corporations. It shows that in but few instances was a proviso added to the "sue and be sued" clause prohibiting garnishment or attachment. [ Footnote 10 ] The fact that, in the run of recent statutes, no such exceptions were made, and that in only a few of them were any special prohibitions included, adds corroborative weight to our conclusion that such civil process was intended.
"prescribe their authorities, duties, responsibilities, and tenure and fix their compensation, without regard to the provisions of other laws applicable to the employment or compensation of officers or employees of the United States;"
"make such expenditures (including expenditures for personal services and rent at the seat of government and elsewhere, for law books and books of reference, and for paper, printing, and binding) as are necessary to carry out the provisions of this title and titles II and III, without regard to any other provisions of law governing the expenditure of public funds."
therefore not to enlarge petitioner's liability nor to add one iota to the scope of § 1. For the end result is simply to allow a suit for the collection of a claim on which Congress expressly made petitioner suable. The mere change in the payee does not make the suit unrelated to the duties and liabilities of the Administrator under § 1.
But petitioner strongly urges considerations of policy against this conclusion and stresses the heavy burdens which would be imposed on such governmental instrumentalities if garnishment were permitted. It asserts that the task of preparing answers, disclosures and returns to numerous garnishment processes in the courts of each of the states would appreciably impede the federal functions of such an agency. It points to various state legislation regulating and restricting garnishment against public bodies and concludes that, if immunity of public bodies from garnishment is to be abrogated, it should be done by legislation so that the remedy could be appropriately molded to fit the needs of government.
In our view, however, the bridge was crossed when Congress abrogated the immunity by this "sue and be sued" clause. And no such grave interference with the federal function has been shown to lead us to imply that Congress did not intend the full consequences of what it said. Hence, considerations of convenience, cost and efficiency [ Footnote 12 ] which have been urged here are for Congress which, as we have said, has full authority to make such restrictions on the "sue and be sued" clause as seem to it appropriate or necessary.
statute authorizes suits by or against the Administrator "in his official capacity" we conclude that that permits actions by or against the Federal Housing Administration. The Administrator acts for and on behalf of the Federal Housing Administration, since by express terms of the Act all of the powers of the latter "shall be exercised" by him. Hence, action by him in the name of the Federal Housing Administration would be action in his official capacity.
MR. JUSTICE MURPHY did not participate in the consideration or decision of this case.
Garnishment of wages due an employee of the United States Shipping Board Merchant Fleet Corporation was disallowed in MacCarthy v. United States Shipping Board Merchant Fleet Corp., 60 App.D.C. 311, 53 F.2d 923. Contra: Haines v. Lone Star Shipbuilding Co., 268 Pa. 92, 110 A. 788. As to the Home Owners' Loan Corporation, a similar conflict of decisions has arisen. That it is not subject to garnishment, see Home Owners' Loan Corp. v. Hardie & Caudle, 171 Tenn. 43, 100 S.W.2d 238. And see Manufacturer's Trust Co. v. Ross, 252 App.Div. 292, 299 N.Y.S. 398. That it is subject to garnishment, see Central Market, Inc. v. King, 132 Neb. 380, 272 N.W. 244; Gill v. Reese, 53 Ohio App. 134, 4 N.E.2d 273; McAvoy v. Weber, 198 Wash. 370, 88 P.2d 448.
Mich.Stat.Ann. (1938) § 27.1855 et seq.
Cf. Porto Rico v. Rosaly y Castillo, 227 U. S. 270 .
See Shinn, Attachment & Garnishment, Chs. I, XXIII. As to garnishment of wage claims, see Sturges & Cooper, Credit Administration and Wage Earner Bankruptcies, 42 Yale L.Journ. 487, 503 et seq.
Cf. Williams v. T. R. Sweat & Co., 103 Fla. 461, 137 So. 698; Campagna v. Automatic Electric Co., 293 Ill.App. 437, 12 N.E.2d 695, with Commercial Investment Trust, Inc. v. William Frankfurth Hardware Co., 179 Wis. 21, 190 N.W. 1004; Diamond Cork Co. v. Maine Jobbing Co., 116 Me. 67, 100 A. 7.
Col.Code Civ.Proc., ch. 7, § 129; Deering's Calif.Code Civ.Proc. § 543.
N.Y.Civ.Prac. Act, § 684; 12 Purdon's Penn.Stat. § 2994. In Michigan, no garnishment for money owing the principal defendant on account of labor performed by him shall be commenced until after judgment has been obtained against such principal defendant. Mich.Stat.Ann., § 27.1855.
"The term is certainly a very comprehensive one, and is understood to apply to any proceeding in a court of justice by which an individual pursues that remedy in a court of justice which the law affords him. The modes of proceeding may be various, but if a right is litigated between parties in a court of justice, the proceeding by which the decision of the court is sought is a suit."
Central of Georgia Ry. Co. v. Andalusia, 218 Ala. 511, 119 So. 236; Duvall County v. Charleston Lumber & Mfg. Co., 45 Fla. 256, 265, 33 So. 531; Chicago v. Hasley, 25 Ill. 595.
As respects the forty government corporations listed in Keifer & Keifer v. Reconstruction Finance Corp., supra, pp. 306 U. S. 390 -391, where Congress included the authority to "sue and be sued," express prohibition against attachment and garnishment was provided in only two instances. They are the Federal Crop Insurance Corporation (52 Stat. 72, 73) and the Farmer's Home Corporation (50 Stat. 527).
While the record shows that Brooks had been "connected" with the petitioner it does not show the nature of the debt due him. The brief which petitioner filed below, however, recited that Brooks was an employee, and no defense was interposed that the claim did not arise under Title I of the Act.
Cf. Fortas, Wage Assignments in Chicago, 42 Yale L.Journ. 526; Nugent, Hamm, Jones, Wage Executions for Debt, Bull. No. 622, Bureau of Lab. Statistics, U.S.Dept. of Labor.
Fifth Annual Report, Federal Housing Administration (1938), p. 157.
See Nashville, C. & St.L. Ry. Co. v. Wallace, 288 U. S. 249 , 288 U. S. 263 ; Commonwealth Finance Corp. v. Landis, 261 F. 440, 443, 444. Cf. Pauchogue Land Corp. v. Long Island State Park Commission, 243 N.Y. 15, 152 N.E. 451; New South Wales v. Bardolph, 52 Commonwealth L.Rep. 455.

References: § 1
 v. 
 v. 
 v. 
 v. 
 § 1
 § 1
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 27
 v. 
 v. 
 v. 
 v. 
 v. 
 § 129
 § 543
 § 684
 § 2994
 § 27
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.