Pennell v. HOME OWNERS'LOAN CORPORATION

• Decision Date: 22 December 1937
• Docket Number: No. 1482.,1482.
• Citation: 21 F. Supp. 497
• Parties: PENNELL v. HOME OWNERS' LOAN CORPORATION.
• Court: U.S. District Court — District of Maine

21 F. Supp. 497

PENNELL v. HOME OWNERS' LOAN CORPORATION.

No. 1482.

District Court, D. Maine, S. D.

December 22, 1937.

Charles J. Nichols, of Portland, Me., for plaintiff.

Simon W. Moulton, of Standish, Me., and Edgar F. Corliss, of Bridgton, Me., for defendant.

PETERS, District Judge.

This is an action founded on tort, removed from the state court and heard on a motion to dismiss.

The defendant foreclosed a mortgage held by it on a dwelling house and took possession of the premises, as it had a right to do under its contract and under the laws of Maine.

The plaintiff, a third party, claiming in her writ to have suffered injury due to negligence on the part of the defendant in its handling of the property, states a case under which it is apparent that she would be entitled to recover if the defendant were an individual or an ordinary private corporation organized under the laws of the state; but it is claimed by the defendant, in support of its motion to dismiss, that defendant is not subject to suit, because it is an agent of the government of the United States.

It should be noted in the first place that the negligence complained of is that of the agent itself, for which an agent is liable on his own account. It is the same point considered in Sloan Shipyards Corp. v. U. S. Shipping Board Emergency Fleet Corp., 258 U.S. 549, 42 S.Ct. 386, 388, 66 L.Ed. 762, in which Mr. Justice Holmes said: "An instrumentality of Government, he it might be, but the agent, because it is the agent, does not cease to be answerable for his acts. Osborn v. Bank of U. S., 9 Wheat. 738, 842, 843, 6 L.Ed. 204; U. S. v. Lee, 106 U.S. 196, 213, 221, 1 S.Ct. 240, 27 L.Ed. 171. * * * The plaintiffs are not suing the United States but the Fleet Corporation, and if its act was unlawful, even if they might have sued the United States, they are not cut off from a remedy against the agent that did the wrongful act. In general the United States cannot be sued for a tort, but its immunity does not extend to those that acted in its name."

The mere fact that the defendant is an agent of the government does not protect it from suit.

Is the defendant immune from suit, generally, for any reason growing out of its organization and purposes or connection with the government, as claimed by counsel? I think not, both by reason and authority, unless, possibly, it should appear that the proceeding would directly interfere with the defendant's function as a federal instrumentality; as was suggested, but left unanswered, in Federal Land Bank v. Priddy, 295 U.S. 229, 237, 55 S.Ct. 705, 709, 79 L.Ed. 1408.

The Home Owners' Loan Corporation was created by authority of the Act of June, 13, 1933, as amended, 12 U.S.C.A. § 1461 et seq., to engage in the business of loaning money and refinancing mortgages on real estate, a business that private corporations and individuals commonly engage in. The principal purpose of the act, as was recited therein, was to provide emergency relief with respect to home mortgage indebtedness, to refinance home mortgages, and to extend relief to owners of homes occupied by those who were unable to amortize their debts elsewhere. Profits were to be paid to the government which owned all the stock. But the fact of stock ownership by the government does not change the character of the corporation or render it immune from suit. U. S. v. Strang, 254 U.S. 491, 41 S.Ct. 165, 65 L.Ed. 368; Panama Ry. Co. v. Curran, 5 Cir., 256 F. 768.

The general proposition of the defendant is that it is an agent of the sovereign and that an action against the agent is, in effect, an action against the sovereign, and that the sovereign cannot be sued without its consent. But the sovereign may waive...