Reimann v. United States

• Decision Date: 21 July 1961
• Docket Number: No. 2237.,2237.
• Parties: Henry F. REIMANN and Eunice W. Reimann, husband and wife, Plaintiffs, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Idaho

196 F. Supp. 134

Henry F. REIMANN and Eunice W. Reimann, husband and wife, Plaintiffs, v. UNITED STATES of America, Defendant.

No. 2237.

United States District Court D. Idaho, E. D.

July 21, 1961.

Gordon S. Thatcher, Rigby & Thatcher, Rexburg, Idaho, for plaintiffs.

Kenneth G. Bergquist, U. S. Atty., Boise, Idaho, Rogers N. Robinson, Denver, Colo., for defendants.

TAYLOR, District Judge.

Plaintiffs, Henry F. Reimann and Eunice W. Reimann, husband and wife, own and operate a farm in Fremont County, State of Idaho, as their community property. In the fall of 1958, plaintiff Henry F. Reimann applied for and obtained a soil bank conservation reserve contract with the United States, covering all of the farm's eligible acreage. Under the terms of the contract, plaintiffs would have been entitled to a total payment of $5,951.20 for the year 1959 had they complied with the conditions stated therein. Prior to the negotiations for the contract, plaintiffs planted approximately 112 acres of wheat. Although plaintiff Henry F. Reimann was informed that unless he disced under said wheat he would be in violation of the contract in 1959, plaintiffs, nevertheless, harvested and sold the wheat in the fall of that year for $7,600. Therefore, the County Agricultural Stabilization and Conservation Committee, and thereafter the State Committee, determined that said plaintiff was in violation of his contract. His payments for 1959 were forfeited and a civil penalty of $2,975.60 was assessed. Plaintiffs commenced this action for a trial de novo pursuant to Section 1831(d), Title 7 U.S.C.A. of the Soil Bank Act, seeking to avoid the penalty and have the contract declared void ab initio, or in the alternative, terminated by the Court as of the date of the violation. The United States filed a counterclaim to recover the penalty under Section 1811, Title 7 U.S.C.A.

This controversy was tried before the Court sitting without a jury on April 25, 1961. The parties waived oral argument, elected to submit briefs and the cause was taken under advisement. Several months have elapsed since the trial, but neither party has seen fit to submit a brief. Plaintiffs have chosen to rely on the authorities and arguments presented in their pre-trial brief. The record also contains a similar brief by defendant.

The principal issue presented by plaintiffs' action and their answer to defendant's counter-claim is whether a soil bank conservation reserve contract is an encumbrance and comes within the purview of Section 32-912 of the Idaho Code. This statute provides that:

"The husband has the management and control of the community property, except the earnings of the wife for her personal services and the rents and profits of her separate estate. But he can not sell, convey or encumber the community real estate unless the wife join with him in executing and acknowledging the deed or other instrument of conveyance, by which the real estate is sold, conveyed or encumbered: * * *"

It has long been the settled law in the State of Idaho that a conveyance of community real estate in which the wife does not join by executing and acknowledging the instrument of conveyance is void ab initio and unenforceable. Plaintiff Eunice W. Reimann, wife of plaintiff Henry F. Reimann, did not sign or acknowledge the contract in question. Plaintiffs contend that said contract is an encumbrance on their land and the wife's failure to join therein voids it from its inception. Inasmuch as this contention involves an alleged transfer of real estate, or some interest therein, in the State of Idaho, and a purported contract made and executed in Idaho, its laws are controlling.

The Court is unaware of any authorities, and the plaintiffs have failed to cite any, which hold that such a contract is an encumbrance. Plaintiffs argue that the contract is analogous to a lease which was held to be an encumbrance by the Supreme Court of the State of Idaho in Fargo v. Bennett, 1922, 35 Idaho 359, 206 P. 692. Plaintiffs reason that the contract was for a definite term of ten years; that it contained a definite and agreed rental, together with a time and manner of payment. They cite Gaskill v. Jacobs, 1924, 38 Idaho 795, 225 P. 499 as listing these elements as the essential requirements of a lease. Therefore, they conclude the contract is, in effect, a lease and, hence, an encumbrance.

The definition of encumbrance that has been recognized by the Supreme Court of the State of Idaho, and most widely accepted in other jurisdictions, is:

"Every right to or interest in the land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by the conveyance." Fargo v. Bennett, 1922, 35 Idaho 359, 361, 206 P. 692, 693; 42 C.J.S. pp. 549-550.

Encumbrances usually fall within two categories: (1) those which affect the title, and (2) those which affect the physical condition of the land such as an easement. 42 C.J.S. p. 551. A lease is an encumbrance because it affects the title to the land. It binds the realty and follows it into the hands of all purchasers. Ibid. A soil bank conservation reserve contract is personal, binding only the parties thereto. It does not bind subsequent owners of the land who do not become parties to the contract. Under the terms and conditions thereof, Part V, 8(b), "loss of control of the farm by sale or otherwise by any signatory to the contract" terminates the contract as to such producer. (Exhibit No. 1). In addition, the United States acquires no interest in the land by virtue of its contract. It cannot demand possession of the land or have free enjoyment of the same. Its only recourse when any signatory fails, or partially fails, to comply with the terms and conditions of the contract is by way of a decrease or forfeiture of payments, termination of the contract and an assessment of a civil penalty in accordance with the provisions of the Soil Bank Act, 7 U.S.C.A. § 1801 et seq.

It is true, as plaintiffs point out, that the owner's use of the land included in the contract is substantially curtailed by government regulations. However, it is questionable whether such regulations constitute an interest in the land which subsists in third persons "to the diminution of the value of the land". In view of the widespread, voluntary participation in the soil bank program, its objectives and results, it is apparent that the benefits derived by such participation outweigh the detriments.

Furthermore, by virtue of the Idaho statute quoted above, the husband has the management and control of the community property. He can farm the community property as he sees fit, market the crops, receive the proceeds therefrom and spend them without his wife's consent. He may also lease the property for a period not exceeding one year without his wife joining therein. Abbl v. Morrison, 1943, 64 Idaho 489, 134 P.2d 94. In that case the Supreme Court of the State of Idaho held that such a lease was not an encumbrance within the purview of Section 32-912 of the Idaho Code, but, practically speaking, was within the husband's authority as the manager of the community property. Here too this Court believes a soil bank conservation reserve contract executed solely by the husband, plaintiff Henry F. Reimann, was within his authority as manager of the community property. He voluntarily chose this means to receive income from and improve the community farm as an alternative to cultivating and harvesting crops. By so doing he in no way encumbered the community real property, but he did personally obligate himself as the manager of the community property to fulfill the terms of the contract.

The Court will next consider the civil penalty which the government seeks to recover by its counter-claim. Section 1811, Title 7 U.S.C.A. of the Soil Bank Act provides for such a penalty when any producer "knowingly and willfully grazes or harvests any crop from any acreage in violation of a contract". It also provides that such a penalty "shall be in addition to any amounts required to be forfeited...