Greene v. Wheeler
| Decision Date | 13 December 1928 |
| Docket Number | No. 4065.,4065. |
| Citation | 29 F.2d 468 |
| Parties | GREENE v. WHEELER. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Edwin S. Mack, of Milwaukee, Wis., for appellant.
J. V. Quarles, of Milwaukee, Wis., for appellee.
Before ALSCHULER, EVAN A. EVANS, and PAGE, Circuit Judges.
The Federal Farm Loan Board (here called Board) made an assessment against the stockholders of an insolvent joint-stock land bank under section 812, tit. 12, United States Code Annotated.1 The District Court sustained the demurrer to the complaint, and plaintiff elected to stand on his complaint. The complaint alleged an assessment and direction by the Board to the receiver to collect.
Appellee's position is: (a) That the Board is without power to make such assessment or enforce the personal liability of stockholders; (b) that a receiver has no legal right to maintain this action.
It is first urged that the powers of the Board are limited to those enumerated in section 831, plus such supervisory powers as are incident thereto, set out in clauses (i) and (j) thereof. So many powers are given to the Board by the act which are not found in section 831 that we must hold the powers of the Board are not so limited. To illustrate: Power to discharge certain employees is found in section 831, but no power of appointment is there given, the power to appoint some of the officers there specified being found in section 656; the very important power to find and declare insolvency and to appoint receivers, given by section 961, is not found in section 831.
The meaning of the provisions of the act must be gained, not only from its words, but also from its purposes. The purposes stated in the title are:
"To provide capital for agricultural development, to create standard forms of investment based upon farm mortgage, to equalize rates of interest upon farm loans, to furnish a market for United States bonds, to create Government depositaries and financial agents for the United States, and for other purposes."
The act provides the machinery by which the purposes of the act are to be accomplished. From those purposes, it appears that Congress did not intend merely to pass a law under which federal land banks, national loan associations, and joint-stock land banks might be organized, but that it also purposed to see to it that the whole undertaking, so vast that it was to be available in every community in every state of the Union, was at all times conducted under the supervision, direction, and control of the Board, during the organization and establishment of those instrumentalities and during their successful operation.
The act shows that it was anticipated that there would be cases of insolvency and failure; that in such cases the association or bank would cease to function normally; that, if creditors, probably widely scattered, were to be protected and debtors compelled to meet their obligations, some agency, other than the bank or the association, would have to intervene. That it was one of the purposes of the act to extend the supervision of the Board so as to cover such cases and supply such agency is evidenced by the fact that it was authorized to find and declare insolvency and to appoint receivers. The moneys collected by the receiver and deposited in the Treasury are subject to the order of the Board. As one of the purposes of the act, it was provided that, in addition to the capital stock and general assets, there should be an individual liability of stockholders, available for the payment of debts in case of insolvency.
Section 651 provides that there shall be established in the Treasury Department a Federal Farm Loan Bureau, "charged with the execution of this chapter." To "execute" means "to follow out into effect" (Oxford Dict.); "to carry through so as to effect, pursue to the end, accomplish, finish, put into force (Standard Dict.). If one of the purposes of the act is to carry insolvent concerns through liquidation and pay their debts, then "execution" cannot be complete until that purpose has been accomplished. Inasmuch as the Federal Farm Loan Bureau can only act or find expression through the Board, it seems to follow, necessarily, that the provision in section 651, that the act shall be executed under the general supervision of the Board, must mean that the Board is to execute the act.
Speaking of the Federal Farm Loan Act, section 641 provides: "Its administration shall be under the direction and control of" the Board. "Administration" means the act of administering, especially direction or oversight of any office, service or employment, etc., management of public affairs. "Direction and control" import authority to command what shall be done, and to require obedience to those commands. It is to be noted that it is not only solvent and going concerns that are placed under the supervision, direction, and control of the Board, but the whole act is to be executed and administered under the supervision, direction, and control of the Board. These provisions can only mean that there is the right in the Board to exercise those powers until the full accomplishment of the purposes of the act, one of which is to pay the debts of insolvent concerns. Cook County Nat. Bk. v. U. S., 107 U. S. 445, 448, 2 S. Ct. 561, 27 L. Ed. 537.
Appellee's argument that the Board is without power to make such assessments is based wholly upon the assumption that its powers are only those found in section 831, and that the provisions in paragraphs (i) and (j) of that section do not relate to any other supervision than that incidental to the powers expressly enumerated in that section. Appellee concedes that, if Congress had not so enumerated the powers, but had made a general grant, covering the entire field, there would be force in appellant's argument that the power to assess is incidental to the general powers of the Board. Section 831 (i) and (j) reads:
It would be a very narrrow construction to hold that the powers in (i), "to exercise general supervisory authority" mean that the Board has supervisory authority in respect only to the things enumerated in section 831, and that it has no supervisory authority with respect to the many other powers given in the act. It would be a perversion of the language of (j) to hold that the Board was given incidental powers as to the specific things mentioned in section 831, but that it was given none with respect to the many powers granted to it in the other sections of the act.
We have above pointed out: (a) That the powers in section 831 are far from being all of the powers vested in the Board by the act; (b) that in sections 641 and 651 there are to be found, first, the general provision that the administration of the act shall be under the direction and control of the Board, and, second, that the execution of the act, charged upon the Farm Loan Bureau, shall be under the general supervision of the Board.
Under the National Banking Act, called Banking Act, there is no specific provision for the making of an assessment. That matter was before the Supreme Court in 1869 in Kennedy v. Gibson, 8 Wall. 498, 19 L. Ed. 476, and the right was upheld.
Appellee's contention that the receiver has no right to maintain this suit is based very largely upon the fact that Congress, in section 961, copied a part, and omitted a part, of section 192 of the Banking Act. Below are found those parts of the two sections brought under discussion by appellee (the parts in italics in the Farm Loan Act are not found in the Banking Act, and the italicized words at the end of the quotation from the Banking Act were omitted from the Farm Loan Act):
FARM LOAN ACT: BANKING ACT: "Such
"Such receiver, under the receiver, under the direction
direction of the Federal of the Comptroller
Farm Loan Board, shall shall take possession of
take possession of the the books, records, and
books, records, and assets assets of every description
of every description of such association
of such association, collect collect all debts, dues
all debts, dues, and and claims belonging to
claims belonging to it, it, and, upon the order
and,
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