Source: http://www.law.cornell.edu/supremecourt/text/295/229
Timestamp: 2014-08-20 20:53:40
Document Index: 643021723

Matched Legal Cases: ['§ 641', '§ 1159', '§ 692', '§ 721', '§ 691', '§ 676', '§ 781', '§ 804', '§ 694', '§ 781', '§ 781', '§ 931', '§ 24', '§ 2', '§ 5242', '§ 91', '§ 4', '§ 341', '§ 6', '§ 336', '§ 5', '§ 155', '§ 201', '§ 2', '§ 1023', '§ 6', '§ 146', '§ 4825', '§ 71', '§ 4', '§ 831', '§ 4', '§ 6', '§ 604', '§ 4', '§ 1463']

FEDERAL LAND BANK OF ST. LOUIS v. BRIDDY, Circuit Judge. | LII / Legal Information Institute
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295 U.S. 229 (55 S.Ct. 705, 79 L.Ed. 1408)
FEDERAL LAND BANK OF ST. LOUIS v. BRIDDY, Circuit Judge.*
Argued: April 5, 1935.
[HTML] Messrs. Peyton R. Evans of Washington, D.C., and Scott W. Hovey, of Kansas City, Mo., for petitioner.
A real estate broker brought suit in the circuit court for Pope County, Ark., against petitioner, incorporated under Act of Congress (Federal Farm Loan Act, July 17, 1916, c. 245, 39 Stat. 360 (see 12 USCA § 641 et seq.)), and domiciled in Missouri, to recover a brokerage commission. Pursuant to local law (Crawford & Moses' Digest, §§ 11591163), he began the suit by attachment of real estate of the petitioner in the county, as that of a foreign corporation.
Petitioner appeared specially in the circuit court and moved to vacate the attachment, on the grounds that it is not a foreign corporation subject to attachment under the pertinent statutes of Arkansas, and that it is a federal instrumentality, immune from mesne process of attachment, by virtue of its organization and functions under the statutes of the United States. On denial of the motion, petitioner sought of the Supreme Court of the state a writ of prohibition directed to respondent, the circuit judge, which was denied. 74 S.W.(2d) 222. We brought the case here on certiorari. 294 U.S. 700, 55 S.Ct. 506, 79 L.Ed. -.
In interpreting section 4, it is to be borne in mind that federal land banks, although concededly federal instrumentalities, possess also some of the characteristics of private business corporations.
See Federal Land Bank v. Gaines, supra, 290 U.S. 247, 254, 54 S.Ct. 168, 78 L.Ed. 298. The statute does not contemplate that their stock is to be wholly, or even chiefly, government owned.
Its acquisition by private investors is permitted, section 5 (12 USCA § 692), and its subscription by the borrowing national farm loan associations is compulsory, section 7 (12 USCA § 721). The operations of the federal land banks are, in part at least, for profit. Section 5 (12 USCA § 691 et seq.). In the conduct of their business they may enter into contracts, section 4 (12 USCA § 676), borrow money, receive interest and fees, section 13 (12 USCA § 781), pay the expenses and commissions of agents, section 15 (12 USCA § 804), and pay dividends on their stock, section 5 (12 USCA § 694). While they are required to deposit in trust farm mortgages as security for farm loan bonds, section 13 (12 USCA § 781), they may acquire and dispose of property in their own right, including land. Section 13 (12 USCA § 781). They thus have many of the characteristics of private business corporations, distinguishing them from the government itself and its municipal subdivisions, and from corporations wholly government owned and created to effect an exclusively governmental purpose. This is a circumstance which gives some support to the inference that the intended scope of the liability to suit includes judicial process incident to suit. See District of Columbia v. Woodbury, 136 U.S. 450, 456, 10 S.Ct. 990, 34 L.Ed. 472; Clallam County, Wash. v. United States, 263 U.S. 341, 345, 44 S.Ct. 121, 68 L.Ed. 328.
It is of some significance, also, that Congress thought it necessary, by the terms of section 26 (12 USCA § 931), to exempt federal land banks from taxation, a provision which is not made applicable to joint-stock land banks. There is thus a specific grant of immunity from taxation, to a corporation having its own purposes as well as those of the United States, and interested in profits on its own account, see Clallam County, Wash. v. United States, supra, 263 U.S. 341, 344, 345, 44 S.Ct. 121, 68 L.Ed. 328; compare The Lake Monroe, supra, 250 U.S. 246, 256, 39 S.Ct. 460, 63 L.Ed. 962, in contrast to the legislative silence as to attachment and execution in suits to which the bank is liable. This affords additional evidence of the congressional judgment that the attachment and execution, as distinguished from liability to taxation, are not obstacles to the performance of the governmental functions committed to federal land banks. Had it been intended otherwise, it would seem to have been at least equally necessary to provide specifically for immunity from attachment and levy, as was done in section 10 of the Federal Railroad Control Act of 1918, c. 25, 40 Stat. 451, 456, which subjected rail carriers under federal control to liability to suit. Immunity of corporate government agencies from suit and judicial process, and their incidents, is less readily implied than immunity from taxation. See The Lake Monroe, supra; Sloan Shipyards Corp. v. United States Fleet Corporation, 258 U.S. 549, 566568, 42 S.Ct. 386, 66 L.Ed. 762; Olson v. United States Spruce Corporation, 267 U.S. 462, 45 S.Ct. 357, 69 L.Ed. 738; U.S. Shipping Fleet Corporation v. Harwood, 281 U.S. 519, 524526, 50 S.Ct. 372, 74 L.Ed. 1011; compare The Davis, 10 Wall. 15, 19 L.Ed. 875; National Volunteer Home v. Parrish, 229 U.S. 494, 33 S.Ct. 944, 57 L.Ed. 1296; Standard Oil Co. v. United States, 267 U.S. 76, 79, 45 S.Ct. 211, 69 L.Ed. 519.
In prescribing liability to suit, the qualifying phrase 'as fully as natural persons' is not customary in acts defining the powers and duties of private corporations, or usual in those creating corporations to perform federal functions.
It appears in section 8 of the National Banking Act, enacted in 1864, c. 106, 13 Stat. 99, 101 (12 USCA § 24) which authorized national banks 'to sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons.' In 1873 the National Banking Act was amended, chapter 269, § 2, 17 Stat. 603, to provide that 'no attachment, injunction or execution, shall be issued against such association or its property before final judgment in any suit, action, or proceeding, in any State, county, or municipal court.' R.S. § 5242, 12 U.S.C. 91 (12 USCA § 91). This amendment, which impliedly saved the right of execution upon judgments against national banks, while forbidding attachment, would seem to be a recognition by Congress that the liability of national banks to suit 'as fully as natural persons' extends by implication to attachment and execution. See Pacific National Bank v. Mixter, 124 U.S. 721, 8 S.Ct. 718, 31 L.Ed. 567; Van Reed v. People's National Bank, 198 U.S. 554, 25 S.Ct. 775, 49 L.Ed. 1161, 3 Ann.Cas. 1154; compare Earle v. Pennsylvania, 178 U.S. 449, 454, 20 S.Ct. 915, 44 L.Ed. 1146. The legislative history of this section of the National Banking Act suggests that the like provision, without the amendment, was incorporated in the Federal Farm Loan Act as sufficient to subject federal land banks to the same liability to attachment to which national banks were deemed to be subject before the amendment of the National Banking Act.
Rehearing denied 295 U.S. 769, 55 S.Ct. 832, 79 L.Ed. -.
The legislative history of the Federal Farm Loan Act shows that Congress understood that many of the activities of the federal land banks were to be of a private character. See Report, Joint Cong. Comm., H.R. Doc. No. 494, 64th Cong., 1st Sess., p. 6; Report of Senate Comm. on Banking and Currency, No. 144, 64th Cong., 1st Sess., p. 2; Remarks of Senator Hollis, sponsor of the bill, 53 Cong.Rec. 6854. For this reason the Senate gave extended consideration to the constitutionality of exempting federal land banks from state taxation. 53 Cong.Rec. 69616970, 73057318, 7372 7378.
See, e.g., the acts creating the Federal Reserve Banks, Act Dec. 23, 1913, c. 6, § 4, 38 Stat. 251, 254, 12 U.S.C. 341 (12 USCA § 341); the War Finance Corporation, Act April 5, 1918, c. 45, § 6, 40 Stat. 506, 507, 15 U.S.C. 336 (12 USCA § 336); the Inland Waterways Corporation, Act June 3, 1924, c. 243, § 5, 43 Stat. 360, 362, 49 U.S.C. 155 (49 USCA § 155); the Federal Intermediate Credit Banks, Act July 17, 1916, c. 245, § 201(c), as added by Act March 4, 1923, c. 252, § 2, 42 Stat. 1451, 1454, 12 U.S.C. 1023 (12 USCA § 1023); The China Trade Act Corporations, Act Sept. 19, 1922, c. 346, § 6, 42 Stat. 849, 851, 15 U.S.C. 146 (15 USCA § 146); the National Home for Disabled Volunteer Soldiers, R.S. § 4825 (24 USCA § 71); the Tennessee Valley Authority, Act May 18, 1933, c. 32, § 4, 48 Stat. 58, 60, 16 U.S.C. 831c (16 USCA § 831c); the Reconstruction Finance Corporation, Act Jan. 22, 1932, c. 8, § 4, 47 Stat. 5, 6, as amended by Act June 19, 1934, § 6(b), 15 U.S.C. 604 (15 USCA § 604), and the Home Owners' Loan Corporation. Act June 13, 1933, c. 64, § 4(a), 48 Stat. 128, 129, 12 U.S.C. 1463(a) (12 USCA § 1463(a).