278 N.W. 896 | Minn. | 1938
1. The defense, not urged at the trial and presented for the first time on the argument of the alternative motion, that the court did not have jurisdiction of defendant or the subject matter of the action because defendant is immune from suit as an instrumentality of the United States, will be noticed despite its tardiness. Suits against the United States can be maintained only by permission granted by act of congress, and no official has the power to waive immunity by appearance on behalf of the government. Munro v. United States,
2. Defendant was "created" by the Reconstruction Finance Corporation pursuant to § 605b(e)2 of the act under which the Reconstruction *436
Finance Corporation was organized.
Generally, the purposes of the Reconstruction Finance Corporation are declared to be to provide emergency financial facilities to financial corporations, to aid in financing agriculture, commerce and industry, and other similar purposes. The act provides that the management of the corporation shall be vested in a board of directors consisting of the secretary of the treasury ex officio and six other members; that it shall have a capital stock of $500,000,000, subscribed by the United States, and its duration shall be for a period of ten years from the date of its enactment unless sooner dissolved by act of congress. The scheme and purpose of the act was to provide financial aid in the respects mentioned during the period of the depression.
The Reconstruction Finance Corporation is authorized to "create" a regional agricultural credit corporation in each of the 12 Federal Land Bank districts, with a paid-up capital of not less than $3,000,000, to be subscribed by the Reconstruction Finance Corporation and paid out of the unexpended balance of amounts allocated and made available to the secretary of agriculture. The act provided that the officers and agents shall be appointed by the Reconstruction Finance Corporation. This function was later transferred to the Governor of the Farm Credit Administration, pursuant to Executive Order No. 6084, dated March 27, 1933, effective on May 27, 1933. The same order transferred to the Governor of the Farm Credit Administration control of the funds allocated by the act to the secretary of agriculture.
The act in express terms declares that the Reconstruction Finance Corporation shall have capital stock, corporate organization, may sue and be sued, limited duration, and numerous powers and purposes. It provides that a regional agricultural credit corporation shall have capital (not capital stock), corporate organization, and power to make loans and advances for agricultural and livestock purposes as therein stated, and to rediscount its paper. It does not in express terms declare that defendant may sue or be sued nor does it limit its duration. *437
The contention is that the United States cannot be sued without its consent and that its immunity as a sovereign extends to defendant as an instrumentality of the federal government. Defendant cites and relies on Keifer Keifer v. Reconstruction Finance Corp.
Of course it is fundamental that the United States cannot be sued without its permission. The Western Maid,
"An instrumentality of government he might be and for the greatest ends, but the agent, because he is agent, does not cease to be answerable for his acts. * * * If what we have said is correct it cannot matter that the agent is a corporation rather than a single man. The meaning of incorporation is that you have a person, and as a person one that presumably is subject to the general rules of law. * * * In general the United States cannot be sued for a tort, but its immunity does not extend to those that acted in its name."
Congressional intent that there should be no immunity from suit was held to have been indicated by creation of a corporation authorized *439 to contract and stand suit in its own name, and that such intent is not negatived by financial support of the corporation by the United States.
In United States ex rel. Skinner Eddy Corp. v. McCarl,
The rule withholding immunity from governmental agencies in cases of contract and tort is in harmony with the general congressional policy with respect to such matters. Not only has the government withheld such immunity from corporations which it has created but it has in large measure waived its own immunity by consenting to suit, except in tort, under the Tucker Act,
We do not regard the failure expressly to state that defendant shall have power to sue and be sued as withholding that power. In the Priddy case [
The rule of nonimmunity has been applied without respect to the law under which the corporation was organized. In Federal Land Bank v. Priddy,
We do not regard certain decisions holding that governmental corporations are exempt from state taxation as being opposed to the views which we have stated. They only illustrate that sovereign immunity has been accorded to the same corporation for some purposes and denied for others. The congressional policy has been to declare its consent to state taxation of federal instrumentalities, for example, R. S. § 5219, consenting to state taxation of national banks. In some instances exemption of federal instrumentalities *442
from state taxation has been expressly declared. Federal Land Bank v. Priddy,
In certain cases the government has been regarded as the real party in interest and the corporate entity disregarded. Emergency Fleet Corp. v. Western Union Tel. Co.
"It is true that the legal title was in the Corporation, that the property of the Corporation might have been taken to pay a judgment against it, and that in other ways the difference of personality would be recognized. Sloan Shipyards Corporation v. United States Shipping Board Emergency Fleet Corporation,
This decision and others of like import are regarded as not overruling the principles announced in the Sloan Shipyards case. Providence Engineering Corp. v. Downey Shipbuilding Corp. (C.C.A.) 294 F. 641.
The inference that defendant is subject to suit is supported by the fact that its creator, the Reconstruction Finance Corporation, is itself subject to suit. The theory on which immunity is sustained is that the creator has transmitted to the creature its sovereign immunity. The government withheld such immunity from the Reconstruction Finance Corporation. It thus indicated a general policy of subjecting the Reconstruction Finance Corporation and its property to suit and judicial process. True, defendant derives its powers from the statute, but it is hardly to be inferred that immunity would be granted to the creature where it is withheld from the creator. The fact that defendant was created a corporation with all incidents of a corporation would seem to be decisive in the light of other considerations. *444
3. 2 Mason Minn. St. 1927, § 8352, provides: "No mortgagee * * * shall arbitrarily, or without just and sufficient cause, declare any condition or stipulation of a mortgage broken prior to a default in the performance thereof; * * *" A mortgagee may avail himself of the insecurity clause only when facts exist which constitute a reasonable ground for believing that the security is in danger. Nash v. Larson,
Whether or not facts existed which justified defendant in reasonably believing its security in jeopardy was a question for the jury. It does not appear as a matter of law that plaintiff abandoned any of the mortgaged chattels. Plaintiff testified that when the sheriff came with a writ of restitution to move him from the farm after expiration of the period for redemption, he told the sheriff he would take the property to a near-by farm and care for it there. According to plaintiff's testimony, which is contradicted but not impeached, the sheriff refused to let him move the mortgaged property. It is apparent from the record that plaintiff used all means at hand to keep possession of the farm and the mortgaged chattels. He obtained an order from the district court in July, 1933, restraining the sheriff from acting on the writ of restitution, and thereby remained on the farm with the property until about July 20, 1933, when the restraining order was vacated and the sheriff served the writ of restitution. After that date the sheriff continued in his refusal to allow plaintiff to remove the chattels; ordered him in fact, by the sheriff's own testimony, to stay off the premises. During August, 1933, plaintiff returned to the farm on at least two occasions to count the cattle. Plaintiff refused to release the certificates *445
of pedigree covering the cattle. On the day of the auction plaintiff and his wife were present, and plaintiff again announced his ownership of the chattels and insisted upon his right to redeem after sale. From these facts the jury could find that plaintiff's act in leaving the property with the sheriff followed from the sheriff's refusal to let him remove it, and the acts of plaintiff at the time the sheriff took possession under the writ of restitution and thereafter until the auction justify a finding that plaintiff did not intend to abandon his property. Rowe v. City of Minneapolis,
Defendant argues that because it is undisputed that plaintiff falsely represented in his application for the loan that the mortgage on his farm was not undergoing foreclosure, as a matter of law defendant was justified in deeming the security in danger. But it appears from defendant's own conduct that it did not consider plaintiff's loss of the farm as necessarily putting the security in jeopardy. When defendant learned that plaintiff was losing the farm it inquired of plaintiff what arrangements he could make to care for the livestock, but it did not then proceed to foreclose the chattel mortgage. It was not until the sheriff had taken possession and was holding the property that defendant took action. Then a notice was served upon plaintiff, instructing him to remove the chattels from the farm and satisfy a lien claimed by the real estate mortgagee Johnston for expenses in caring for the property, and advising plaintiff that in the event of his failure to follow these instructions defendant would deem itself insecure and take steps to foreclose. The notice of foreclosure reads:
"That default now claimed consists in the failure of the mortgagor to himself properly care for said mortgaged property and in failing to remove therefrom the lien of George E. Johnston against the same incurred in the removal of said John Casper and family and property from said premises and for storing and caring for the bulk thereof on said premises, and in failing to prevent the *446 accumulation of said lien and in failing to pay the said mortgage indebtedness declared to be payable forthwith * * *."
In the light of the showing that defendant deemed itself insecure because the chattels were under the control of the sheriff, claiming a lien on behalf of Johnston, it seems clear that defendant did not deem itself insecure from the fact alone that plaintiff's farm was under foreclosure. At most, it was a question for the jury as to whether or not the fact that plaintiff had falsely represented the status of the farm mortgage even entered into defendant's considerations in declaring itself insecure. If defendant did not consider that circumstance sufficient to justify foreclosure, it cannot urge the court to be more solicitous of its security than it was itself. The record presents no fact which must be taken at all events to have endangered defendant's security, and the question was therefore one for the jury.
Other questions which do not merit separate discussion have been considered.
The order granting judgment notwithstanding the verdict is reversed, without precluding a reconsideration of the motion for new trial. See State ex rel. Olson v. District Court,
Reversed.