Source: https://www.legalcrystal.com/case/95720/federal-land-bank-vs-gaines
Timestamp: 2018-02-20 00:15:28
Document Index: 648807817

Matched Legal Cases: ['§ 4', '§ 671', '§ 3', '§ 651', '§ 781', '§ 14', '§ 791', '§ 803', '§ 771']

Federal Land Bank Vs Gaines - Citation 95720 - Court Judgment | LegalCrystal
Federal Land Bank Vs. Gaines - Court Judgment
LegalCrystal Citation legalcrystal.com/95720
Case Number 290 U.S. 247
Appellant Federal Land Bank
federal land bank v. gaines - 290 u.s. 247 (1933) u.s. supreme court federal land bank v. gaines, 290 u.s. 247 (1933) federal land bank of columbia, south carolina v. gaines no. 112 argued november 16, 17, 1933 decided december 4, 1933 290 u.s. 247 certiorari to the supreme court of north carolina syllabus 1. a national farm loan association, composed of borrowers under the federal farm loan act, though in a general sense it is a public agency or instrumentality for carrying out the policy of the statute, does not act as the agent of the lending federal land bank after money transmitted through the association to the borrower has passed from the control of the land bank. p. 290 u. s. 254 . page 290 u......
Federal Land Bank v. Gaines - 290 U.S. 247 (1933)
U.S. Supreme Court Federal Land Bank v. Gaines, 290 U.S. 247 (1933)
1. A National Farm Loan Association, composed of borrowers under the Federal Farm Loan Act, though in a general sense it is a public agency or instrumentality for carrying out the policy of the statute, does not act as the agent of the lending Federal Land Bank after money transmitted through the Association to the borrower has passed from the control of the Land Bank. P. 290 U. S. 254 .
2. A borrower, by his application and by endorsing the check sent by the lending Land Bank to pay a loan, consents to the procedure prescribed by the Act whereby the Association shall be a co-obligor with the borrower and the money borrowed shall be sent by the Land Bank to the Association, and the Association shall have control over the disbursement of the proceeds of the check for the agreed purposes of the loan. There is no inconsistency with the purposes sought by the Farm Loan Act in placing upon the borrower, instead of the lending bank, the risk of insolvency of a depository bank in which the Association places the proceeds of the check pending their disbursement. P. 290 U. S. 254 .
3. This conclusion is fortified by the fact that the Act contemplates that lending banks shall use the mortgages, given by borrowers, as collateral for Land Bank bonds, and that such use would be impaired if the risk were upon the lending bank during the long period that may elapse between the time the proceeds of a loan pass from the control of the Land Bank and the time they are actually disbursed by the Association to the use of the borrower. P. 290 U. S. 255 .
4. There is no failure of consideration for a borrower's mortgage when, pursuant to the scheme of the Act, a Land Bank has sent a check made payable to the borrower and a Farm Loan Association, when the check has been endorsed by the borrower and delivered to the Association for disbursement of the proceeds, and when the proceeds are lost through the insolvency of a bank in which they had been deposited by the Association pending disbursement. P. 290 U. S. 256 .
These proposals were carried out in the Federal Farm Loan Act by providing for the creation of twelve regional federal land banks, § 4, 12 U.S.C. §§ 671-683, of which petitioner is one, all under the direction and control of the Federal Farm Loan Board, [ Footnote 1 ] § 3, 12 U.S.C. §§ 651, 652. Each has authority to lend money on the security of mortgages on farms within its own district. Section 13, 12 U.S.C. § 781. The banks are authorized to issue farm loan bonds secured by mortgages taken as security for loans. They are without authority to make loans "except through National Farm Loan Associations," organized as provided by other sections of the Act, § 14, 12 U.S.C. § 791, [ Footnote 2 ] or by agents, which are banking institutions organized under state laws. Section 15, 12 U.S.C. § 803. They may make loans only for specified agricultural purposes, including the payment of existing loans upon the security of farm lands or the purchase of farm lands or equipment for them or their improvement. Section 12, Par. Fourth, 12 U.S.C. § 771. Loans are made on written applications which are required to