# Petition for Writ of Certiorari — Federal Housing Administration, Region No. 4 v. Burr > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0260%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1940 - **Citation:** 309 U.S. 242 ## Text . ¢ ay y es "4 7 ae ee a of | - °° é a wid S poet orm ts pans ee ae. ‘ ie. oF “1.2 COPY oe he eee f tL: hag ae RS ese é i CMes - «Sepreske Overt u's Ais | : Bie eo en ; ‘ _ SEP. 2 eq | OMARLER ELMORE onBP LEY Ci. SRK . \ ea te \ , , 4 ' . = {> No. a o 4 | nie Sapeme on the | in _ OCTOBER Nei, 1939 ~ Fepera. Hovsine ADMeN ISTRATION, | Srate Dikector Ray MoND FOoLey, Wy tot Re TH Burr, ' , oe BUSINESS AS: ‘ SERVICE Bureat, —— = ee paige No. 4, ; saat: ‘Src RETARIAL < PETITION FOR A: WRIT OF CERTIORARI TO THE SUPREME COURT OF THE STATE “OF MICHIGAN . ~o Opinions Se ee Mins oe ease eee aera Jurisdiction al statement_______- Ne ee ee ae — } renga in sane stains kame wenendausy dee omens SRE LN SNES Rs ESRI le SERRE 8 Statement———.—__— ae Ect 1 eat —— Spécification of errors to be urged___.-_._-----_-_--- ueciad 4 Re "ASOnS er Mae GOR Bias di 5 cS once te nacvccesd 5 ‘ in wae oa grace cen eneceenen bahar ve tace MiPor i peek Chena oo 10 \ roe *, \. , ; CITATIONS Cases: 45> ans - Buchanan v. Alexander, 4 How. «eas ig de eas . : Federal Land Bank v. Priddy, 295 U.S. 229. .--....--.- a. ae Gil; @ Reses, £8 Ohio App. 194. . 5 .----.:..-.---- ese Graves v . New’York ex rel. 0’ Keefe, 306 U. S. 466.-_____- . Haines v. Loné Star Shipbuilding Co., 268 Pa. ee ~ HO. L. C. ¥. Hardie & Caudle, 171 Tenn. eo. McCarthy v. United States Shipping Board Merchant Fleet Canows AOODR. ‘Corp., 53 F. (2d) 923, certiorari denied, 285 UY, S, 547__- Manufacturers Trust Co. v. Ross, 252 App. Div, (N. Y.) 292. Central Market v. King, 132 Neb. 380, 272. N. W. 244.___.. & McAvoy v. Weber, 88 Pe Ge NN eis ook Mew aksubcce = ’ | Sloan Shipyards vy. U. 8: Fleet Corp: @p8 U.S. 649. __-__- United States vz»Winkle Terra Cotta, Inc. (pending on sai A befere the U.S. C. C. A. Sth). .---.----1- at iia Statutes: ° : *Act of June 27, 1934, ec. 847, 48 Met. 1908s. . 3 .....-5.. 2,3: Home Owners’ Lean Act, ¢. 64, 48 Stat. 128, 12 U. 8. CG, ‘ I Pcs os ose sk ee ee a 9 Act of August 23, 19. ec. 641, See. 344 (a), 49 Stat. 722. 2,3 * Miscellaneous: ef Federal Ccsietiiees and Corporate Agencies, Harvard .. Business.Revi iew, Vol. XVI, -—.=...2 EE PON Cr te 9 Gov ernthen} Corporations and Federal Funds, 31 Ame rican Political’ Science Review, 1094- __-- ROE A Re one 9 Rep. 1822, 74th Cong., Ist Se , Pp. 87... pet pdued weed. ooo tae S.-Rep. 1067, ap gone: Ist. | . p 24e,-.- ek oe 5 : ) es 173806—20 - a an) Ss, Ns s > gue Sre Court ofthe the tinted Sites ca e; . te OcTOBER TERM, 1939 é a : ah ue SiO ee ep | FemeraL Hovsne - ADMINISTRATION, Reaton No. 4, Lin -* STATE DIRECTOR Raymonp Fo.ey, "PETITIONER 7 ub | Crisis : aS t — Burr, Dormna Busewnss AS SECRETARIAL , ae SERVICE BUREAU _permun on 4-warr oP CERTIORARI TO THE! SUPREME Ao aye OF THE STATE.OF MICHIGAN ‘= The Solicitor Gerteral, on behalf of the petis tioner, Federal Housing Administration, Region No. 4, State: Director Raymond Foley, prays ‘that a writ of certiorari issue to review the judgment of thes. Supreme Court of Michigan entered in the _ above ease on June 5, 1939, affirming the judgment: bs te Cireuit Court ‘of Wayne County, Michigan. . OPINIONS BELOW ix: The opinion . of the Circuit Court. of Wayne ‘County, Michigan (R. 10) is. not_reported. The opinion of the ‘Supreme. Court. of. Michigan (R. 12). is er in 286 N. W. 16 9. 3 vast (1) \ ee _SunisprorrowaL STATEMENT diction of this Court. is itivoked | under Section i Act of Fébruary 13, 1925, on the ground that the =, te decision below denied an immtnity claimed by the - _ tioner’s arfswer and/disclosure w herein it was as- _serted that ‘‘the Federal Housihg Administration “is an agency of the United. States ev and Y is, thetetore, not. subject to gariiishee proceed. ® 2 The judgment of the Suprente Court of Michigan, was entered-on June 5, 1939 (R. 15). The juris-- 237 (b) of, the J udicial Code, as amended ‘by the petitioner ‘under. the Constitution and- under the National Housing Act} as amended, e. 847, 48 Stat. 1246, e. 614, 49°Stat. j22, See. 344 (a). ‘The case. relied on to sustain the jurisdiction ef tis Court | is Fede ral Land Ban k-v. Priddy, 295 U. _S. 229. The federal question was first raised by. the peti- ings”. (R. 6). The triad court -held the petitioner , 5 subject te garnishment on the ground that the nature of the business\ of the. Federal Housing. A@ 2 ministration, was net gor vernmmental but ‘that of : an insurer of loans”’ |((R. 10). The petitioner’s ground of appeal from the trial court to. the Su- .preme Court ot Michigan was that ‘the Bedéral Housing Administr ation is an executive branch of a the United. States’ Government, which is a sover- eign body politic, and cannot be sued. without its consent, and is not within the jurisdictioft of this -. -eourt”’ (R. 4). The Supreme Court of Michgan affirmed the judgment of the court of first instance on the ground. that that asentie had been waived — wk ._-by-the “‘sue-and- be-sued’ ’oelause of Section Yot-. ' + the National Housing Act, as amended (R. 19415). ep ‘The grounds upon which it is contended, that the question involved is substantial are set forth un- ° = der the Reasons for: Grosting the Writ, infra, ; PPS-9._ 3 pay og f \. >. QUESTION PRESENTED © ONS Ieee vs as 5s 97 naar Whether the Federal Hougihg Administration, . oes 2 through its State. Directorgh S ; subject to. garnish~ ; ment tor modiféys due to aGemployee. = .” sriruTE INVOLVED, 1 edtline 1 of the National Housing. Act, approved June 27, 1934, of 847, 48 Stat. 1246, as amended o by: the Act of August. 23, 1935, ¢. 614, Sec. 344 - ‘(a);. 49 Stab 722 (12 U. 8S. C., Sapp. IV, sacle ‘provides: / ” Sills | = | pitas a ie es The Administrator shall, in car- tying out the provisions of this title [title 1} and titles II and EII, be authorized, in his © official capacity, to sue and be sued in any = eourt of competent jurisdiction, State as \ “2 Federal.’ ie ae Re ee 4 oe ele = STATEMENT | On November 5 _ 1930, the re SRSA obtained g.. final judgment against one Heffner and a Geor ge. Brooks ( R. 4). Thereafter, on March 5, 1938, the petitioner was serv ed with a writ of garnish- . ment issued by the Cire cuit Court for the Cougify of (hy: Wayne, Michigan (R. 4):’ Petitioher appeared. in the cause and: filed an answer and disclosure | admitting that there was due and owing to Brooks by the Federal Housing Administration the sum | of $71.11, and asserting ‘“‘That the Federal. Hous- , ing Administration is an agency of. the United : States ‘Government and tis, therefor e, not subject to garnishee proceedings’”(R. 6). . , eo Respondent moved for judgnrent against the, pe-. titioner (R. 6); Which motion was granted and _ judgment entefed thereow i ‘in favor of the respond, - » ent -(R, caster the petitioner appealed to the Supremé Court of Michigari, which affirmed 7 7 the judgment of the Cireuit Court (R. 15). SPECIFICATION OF ERRORS TO BE URGED Tie ‘Supreme. Court of Michigan erred: “1. In olding that the Federal Housing Admin- istration is subject to garnishment proceedings. . 2. In holding that the. ‘‘sue-and-be-sued”’ elquse - of So 1 of the National Housing Act, as ¥,° anfen d, makes the Federal Housing Administra-* tion subject to garnishment proceedings. | =. ° 3. In failing to, hold that the “‘sugsand-be-sued” clause of the ye was limited solely to suits arising _ out of the carrying dut’of the provisions of Titles, , I, I, and II of the Act. . 1 The Federal Housing Administrator is not named:as de- fendant, as is provided for in Sectior I of the National Hous- ‘ing a , quoted above. However, no objection has been made “on t tis gfound by the Government, and it’has treated the suit as against the Federal Housing Administration (R. 6). : @ a . 1e.° si ee 5 cS s ye “ 4. In altailies the judgment of the Circuit Court, for the County of Wayne, Michigan. REASONS FOR GRANTING THE WRIT ‘ 1. The holding of .the: Supreme Court of Michi- gan that the Federal Housing Administration is. ‘subject to’ garnishifier nt decides -an important fed- - eral question which has not been but. should be _ determined by this Court. The Federal Housing . Administration was. created. -by the President pur- — . suant-to the authority conferred upon him by the . National Housing Act 6f June 27, 1934, ¢. 847, 48-— Stat. 1246. . It is an unin¢or potated agency of the United - States, operating with funds supplied , | wholly, by the.United States and functioning as an, - integral part of a. broad plan adopted to remedy . the urban. home- -mortgage- crisis. ‘Its: functions | ‘are goverimental in character: -Cf.. Graves v. New-York ea rel. O’Keefe, 306 U. 8. 466. By the _*Banking Act of August 23, 1935, supra, p. 3, Sec- - . tion 1 of the Act was amended to provide that the - Federal Housing. Administrator ‘‘in. carrying, out “the provisions of” titles I, II, and III of the Act, - could sue ‘and ‘be sued in both. feder al and state | Sourts.’ The Supreme Court of Michigan held that % ? Title I dealt with. Heasing Renov ation and Modernisa’ tion; Title II dealt with Mutual Mortgage Insurance; and x Title gl dealt with National Mortgage Associations. The legislative, history of the amendnient throws no light upon its interpretation~With respect to the’ ‘present controversy, See S. Rep. 1007, p. 24, 74th Cong., Ist Sess. ; A. ?- 1822, _p, 5%, 74th Cong. Ist Sess, ee ay ° > ° '-* of Appeals for the District of Columbia held that ee os ae by reason of this amendment the Federal Housing — Administrator was liable to garnishment proceed- - ings brought by a ‘ereditor of an rata ee of the’ _ Administration. ~ The decision below i is int subistantial coifliet with ‘ : “Mel ‘arthy. v, United States Shipping Board .Mer- “chant. Fleet Corporation, 53. F. (2d) 923 (App... _D.&.), certiorari. denied, 285 U. S: 547. In that . . ease an attempt was made to garnish the. wages’ of: : an employee of. the Shipping Board. The Court - the Shipping: Board -was exempt from garnish- | quent.” Although this Court had lield, in Sloan . ‘Shipyards v. U.S, Fleet Corporation, 258 U.S. 549, that the Shipping Board was subject. generally to be sued upon its. contracts and torts, the Court. of Appeals said (p. 923-924) ) that it did not follow that it was not exempt from garnishment— — . for suc ‘han agency may be permitted by law ” tosue or be sued upon its obligations w ithout = being subjected to: attachment or yarnish-— ment in cases unr lated. to its own. duties or liabilities. The present case is. governed. -’ by this rule. Jee ‘The court below attempted to distmguish the Mc- am tarthy case on the ground that “That tase was 7 based on the:Merchant Marine Act of 1920, 41 Stat. = WE ontra:. Haines: ¥.. Lone Star Shipbnitding C On 268 Pa. 92, 110 Atl. 188." | in, , -988, which bee not contain the broad waiver of 3 im: munity found in the Federal Housing Act”’ (R. 15). But in the Sloan case this Courtjheld that the Sbip- ping Board ‘was originally subject unrestrictedly quent bestowal upon it of governmental powers did not give it immunity from suit. Thus. the immu- nity of thé Shipping Board from suit was cer tiénly & » to suit by reason of its incorporation under the lays ‘a of the District of ‘Columbia, and. that the “subse: not~ greater than that of ‘the Federal. Housing» , Administr ator, and was probably less. .. we: - The court below relied .on Federal Land Bank 3 Y: Priddy, 295 U. S. 929, in which this ‘Court held that a federal land bank was subject to attach- ment. The. bank’s charter stated that the bank ’ might sué and be sued ‘as fully as natural per- - 3 99 _sons.’’ No such: language appears in the Federal Housing Act. ’ Moreover, the attachmerits stemmed. from the ‘land bank’s performance of its own . duties, not from a controversy between third per- sons in whi_h the bank was not interested. Finally, _ the bank had many of the ¢ haracteristics of private busines? corporations, including gwnersInp of its * stock by private interests, .w hich are lacking. in the - ‘ease of the Federal’ Housing Administration. - In Buchanan v. Alexander, 4 How. 20, the .lead- © ing case establishing the immuiiity of federal officers and instrumentalities from garnishment, it Was pointed out that ‘it would be embarrassing to- “9 Pi » the Government to perniit garnishment. appeal before the United ‘States Circuit Court of _ against the St. Louis Director, of the Federal Hous- Housing Administration, that the United States was a ‘stranger to the rec ord. District: of Missouri against the creditor and the sheriff, to enjoin exceution against the property of * ie This is well illustrated by United States of America Vv. Winkle Terra Cotta, Inc., No. 11,587 pending on | ¢ippeals for the Eighth Ci reuit, The creditor there brought gz wnishment proc eedings in the state court ing. Administr ation, who. moved to dismiss, but was unsue cessful, Judgment w ent against. the Fedéral® -An appeal on behalf of the U nited States was disallowed on ‘the eround The United States then filed an injunction suit in the United States District Gourt for the Eastern the Federal Housing Administration: The District. Court disihissed the suit, and the U nited States has taken an appeal. The creditor has ‘served writs of. garnishment upon certain banks, as debtors of:the Federal Housing Administration, and enjoined them from paying over money to the Federal Hous~ ing Administrition until the debt was paid. Fur- | thermore, the Federal Housing Administration — .° cunt dispose be al property acquired through forec lostire because title cofthpanies have exe epted the gar nishment. reais from their guaranties of clear tithe, Degas Mee 3 . : '9 2. The Act authorizing the er eation of the Home Owners’ Loan Corporation provides, without quali-. : fication, that the Corporation ‘shall haye author ity to. suie and: to. be sued.” Home Owners’ Loan Act, « 48 Stat. 128, c. 64, 12 U. S. C.,; See. 1463.. With respect to whether the Home Seales’ Loan Cor- poration is subject to gar nishment, a sharp con- - flict hag arisen in the state courts. It was held that . it is fot in Home Owners’ Loan Corporation v. Hardie &: Caudle, 171 Tenn. 43, 100.8. W. (2d) 238. » And in Manufacturers Trust Co. v. Ross; 252 App. } Div 292, 299 N. Y. Supp. 399, it was held that the Home Owners’ Loan Corporation was not subject» — to third* party orders in supplementary proceed- ; ings. On the other hand, it was held that the -_ ae: Owners’ Loan’ Corpor ation was subject to garnis ment in Cevtral Market v. King, 132 Neb. 380, 272 _N.W. 244; Gill v. Reese, 58 Ohio App. 134, 4.N. E.. (2d). B73; 2 and erate v. Weber, 88 P. (2d) 448 | (Wash, : ree In view of the’ number of FF vcemmental agencies’ & and corporations, the wide range of their. opera- tions’ and the confused state of the law in the lower courts, this Court should make an authorita-: tive determination , of their responsibility to gar- nishment proceedings. . a *See “F ad Corporations and Corporate Ageticies,” — ‘Harvard Business Review, Yol. X V1, 436; “Government Cor- porations and Federal Funds,” 31° American Politica! Science Reviewg 1694. f° 10 CONCLUSION ‘ The decision of the court: below is in substantial conflict with the decision of a United States Coyrt ° of Appeals ‘and is in conflict with decisions of other state courts. The question involved is one of sub- stantial importance which calls for-an. authoritative * - ruling by this Court. Therefore it is respectfully submitted that this petition for a writ of certiorari . 4 should be granted. | : Rosert H. J ACKSON, ue aa ; Solicitor General. « September 1939. ‘.* U S GOWERNWENT PRINTING OFF'°E 193° > ao . « . . - ‘ ‘ c & ' ° \ 5 . ° e . & \ 2 s 7 . * e : ‘ . 7 : ‘ . . -« w --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0260%3A3. Public record. Not legal advice.