Document: 356 U.S. 595 78 S.Ct. 950 2 L.Ed.2d 1001 UNITED STATES of America, Petitioner,v.Howard A. McNINCH, Doing Business as Home Comfort Co., Rosalie McNinch and Garis P. Zeigler, et al. No. 146. Argued April 1, 1958. Decided May 26, Mr. George Cochran Doub, Washington, D.C., for petitioner. Messrs. C. Epps, Richmond, Va., Edwin Gardner, Columbia, S.C., respondents. Justice BLACK delivered the opinion Court. 1 This case was argued with Rainwater v. United States, 590, 946, also decided today. In involves three separate actions by Government to recover damages forfeitures under False Claims Act.1 These actions—which will be referred to, after principal defendant in each instance, Cato, Toepleman McNinch—were initially brought different Federal District Courts but on appeal were disposed Court Appeals a single opinion. 242 F.2d 359.2 Cato found defendants had submitted false claims crop support loans Commodity Credit Corporation, entered judgment favor provided Act. The reversed ground that claim against not 'against or any department officer thereof' within meaning sole question before us, so far these two are concerned, is whether erred deciding. For reasons set forth we hold it did. 3 raises questions concerning alleged Housing Administration. By statute FHA authorized insure qualified banks other private lending institutions substantial portion losses sustained them money repair alteration homes.3 After institution has been approved agency promises insure, upon payment specified premium, home improvement loan made institution. A borrower desiring obtain an insured applies directly lender, which final authority decide should made. If granted, lender reports details automatically insures soon required premium paid. 4 Government's complaint McNinth charged causing bank present number applications credit insurance FHA.4 moved dismiss complaint, asserting failed state cause action. granted motion, holding application 'claim' affirmed same basis well alternative thereof.' 1. our quite plainly part 'Government States' purposes unincorporated Executive Department created President pursuant congressional authorization. Its head, Commissioner, appointed Senate's consent, powers vested him. responsible administration federal housing programs operates funds originally appropriated Congress. short, about much can be. 5 2. Although problem easy, believe courts below correct institution's program term used We acknowledge force argument literally such could regarded claim, sense applicant asserts right privilege draw credit. But must kept mind, explained Rainwater, determining words 'claim Government' actually construing provisions criminal statute.5 Such carefully restricted, only their literal terms evident purpose Congress using those terms, particularly where they broad susceptible numerous definitions. See States ex rel. Marcus Hess, 317 537, 542, 63 379, 383, 87 L.Ed. 443; Wiltberger, Wheat. 76, 95 96, 37. 6 normal usage understanding would hardly thought government.' As Third Circuit said this context, 'the conception government normally connotes demand some transfer public property.' Tieger, 234 589, 591. agreeing disburses no nor does otherwise suffer immediate financial detriment. It simply contracts, reimburse event future default, any.6 7 Act adopted following series sensational investigations into sale munitions War Department. Testimony painted sordid picture how billed nonexistent worthless goods, exorbitant prices goods delivered, generally robbed purchasing necessities war.7 wanted stop plundering treasury.8 At time equally clear designed reach every kind fraud practiced Government. From language Act, read whole light usage, available legislative history led conclusion fairly come scope intended have.9 now considered Third, Fourth, Fifth Circuits, circuits, all have reached conclusion.10 8 remanded further proceedings inconsistent 9 ordered. 10 Affirmed remanded. 11 DOUGLAS, concurring dissenting part. 12 I agree respects Corporation. disagree allegations others, having contracted make alterations improvements various homes, presented South Carolina several fraudulent applications. accompanied fictitious misrepresented eligibility homeowners. intent accepted Administration insurance.1 13 allegations, assume correct. 14 requested applied insurance. loans. Thereupon proceeds deposited accounts respondents bank. 15 statute, R.S. §§ 3490, 5438, 31 U.S.C. § 231, U.S.C.A. covers anyone who fraudulently 'makes causes made, presents presented, approval * claim' States. No tendered 'payment.' 'approval' induced representations One endorsement his paper acquired property value. value because represents course contingent until default occurs. when fraudulent, effort 'cheat (United 544, 384, 443) extent underwrites fact precise shown fatal, Rex Trailer Co. 350 148, 153, 76 219, 222, 100 149, holds. 16 cheating real, substantial, damaging specific abuses managers legislation railed Congress.2 do stretch law include type 'claim,' form well-recognized interest. Fidelity & Deposit Maryland Arenz, 290 66, 54 16, 176. obtaining risk from means flagrant presentation 'payment approval' Treasury. Judge Rives dissent Cochran, Cir., 235 131, 135, 'Inducing pledge its 'inducing 5438 (1878), out note at page 947. suit filed Eastern Virginia. Brothers, Inc., Virginia corporation, Wilfred William Magie Stone, directors officers corporation. North Carolina. Named Frederick Garland Greenway, individuals partners. trial, exonerated Greenway he longer involved. action instituted Howard McNinch, Zeigler. general see 48 Stat. 1246, amended, 1701 seq., seq.; 24 CFR 200.2—200.3, 201.1 201.16. somewhat greater detail assertions: construction business Zeigler one salesmen. FHA-insured sought behalf homeowners financing residential repairs make. contained statements misrepresenting reports. bank, relying information, turn routinely FHA. 8, 592, 948, text point. Since there here, need express view reimbursement defaulted procured covered See, e.g., H.R.Rep. 2, Part 37th Cong., 2d Sess. Cong.Globe, 3d 952—958. manager bill Senate stated objective follows: 'I say prepared urgent solicitation connected Treasury country, know, full complaints respecting frauds corruptions pay during war; said, earnestly urged attention, pressingly necessary prevent great evil; suppose doubt are, main, founded. attention able give subject, am satisfied more stringent punishing preventing frauds; apply speedy vigorous remedy cases prepared.' (Emphasis added.) 952. Apparently committee record House. certiorari denied 352 941, 77 262, 237; 237. offered context statement Cohn, 270 339, 345 346, 46 251, 252—253, 70 616, relevancy here: 'While word may sometimes juridical 'a matter right, person another, forbear act thing duty,' Prigg Commonwealth Pennsylvania, Pet. 539, 615, 1060, clear, entire provision relating against' relates solely asserted Government, based own liability claimant.' Commissioner empowered result alterations, repairs, connection real property, 1703(a), 1703(a). Under Regulations (24 200.2—200.3) first grant eligible given contract agrees indemnify up aggregate amount equal 10% total sums advanced reported makes institution, either through contractors, provides disclosure certain 200.3(a). Within days report transaction purpose, 200.3(c). it, computes due payable records transaction, acknowledges Ibid. 952 (1863);

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