Reimann v. United States

• Decision Date: 05 April 1963
• Docket Number: No. 17800.,17800.
• Citation: 315 F.2d 746
• Parties: Henry F. REIMANN and Eunice W. Reimann, husband and wife, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

315 F.2d 746 (1963)

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

No. 17800.

United States Court of Appeals Ninth Circuit.

April 5, 1963.

Ray W. Rigby and Gordon S. Thatcher, Rexburg, Idaho, for appellants.

Joseph D. Guilfoyle, Asst. Atty. Gen., Sherman L. Cohn, Edward Berlin, Department of Justice, Washington, D. C., and Sylvan A. Jeppesen, U. S. Atty., Boise, Idaho, for appellee.

Before POPE, BROWNING and DUNIWAY, Circuit Judges.

DUNIWAY, Circuit Judge.

This action arises under the Soil Bank Act, 7 U.S.C. §§ 1801-1837, and particularly § 1831 (d). The contract involved is a "Soil Bank Conservation Reserve Contract" entered into by appellant Henry F. Reimann as "producer" on November 24, 1958. Appellant Eunice W. Reimann is his wife, and did not sign the contract. The contract was approved for the Secretary of Agriculture on January 6, 1959. It is of the type authorized by § 1831(a). While it differs from an "Acreage Reserve Agreement," authorized under § 1821(a), it is in most respects similar and in many of its provisions identical to such a contract. We had occasion to consider the provisions of an "Acreage Reserve Agreement" at some length in Shay v. Agricultural Stabilization & Conservation State Comm., 9 Cir., 1962, 299 F.2d 516.

The contract relates to a farm owned by appellants as community property and located seven miles northeast of Ashton, Idaho. Under the contract, 276.8 acres were designated as conservation reserve acreage, to be established and maintained with a permanent cover of grass and legumes for a period of ten years, 1959-68, the maximum period authorized by § 1833(b). This was all of the cropland on the farm. The payments to be made to Reimann under § 1831(b) were annual payments of $4,567.20, and "cost-share payments" of $1,384.00, representing one-half his cost of seed and labor. The contract prohibited his harvesting wheat from the lands affected.

In August of 1958, Reimann had planted approximately 112 of these acres to wheat. In the spring of 1959, he seeded 170 acres to grass. During the spring of 1959, he received both oral and written notices from the county Agricultural Stabilization Committee stating that, to comply with the contract, he would have to destroy the wheat by July 31, 1959. He did not do so, and subsequently harvested the wheat, realizing approximately $7,600.00.

Shortly before July 31, Mrs. Reimann told the county committee that, because she was a producer and owner as well as her husband, and had not signed the contract, it was void and that the Reimanns intended to harvest their wheat.

The procedures outlined in the regulations of the Secretary (7 C.F.R. 750.172 ff., formerly 6 C.F.R. 485.172 ff.) and in § 1831(d) were followed, and the state committee determined that the harvesting of the crop was a knowing and willful violation of the contract, and that Reimann should forfeit the payments that he was to receive (i. e., $4,567.20 plus $1,384.00). The committee also purported to determine that Reimann was liable for a civil penalty, under § 1811, of one-half the foregoing amounts or $2,975.60. These determinations were against Henry F. Reimann alone, not against his wife.

The committee did not determine whether the violation was one "which would warrant termination of the contract" or that "the nature of the violation is such as to defeat or substantially impair the purposes of the contract" (§ 1831(d)). We held, in Shay, supra, that before a forfeiture or refund of all payments can be required, such determination should be made by the committee, and that a regulation (former 6 C.F.R. § 485.286) which purported to establish a flat rule that a knowing and willful violation requires forfeiture is invalid because in conflict with §§ 1831 (d) and 1821. Evidently the committee relied upon a similar regulation here (former 6 C.F.R. 485.294, now 7 C.F.R. 750.294). However, there is no need to remand for this reason, as we did in Shay, because the Reimanns conceded, in the court below, that the violation (if it was a violation) was such as to warrant termination.¹

In Shay, we also held that neither the Secretary, the committee, nor the court in an action brought under § 1831(d), has anything to do with whether the former is liable for the penalty prescribed by § 1811 for knowing and willful violations, that question being solely for the court in an action brought to recover the penalty in the name of the United States. The contract form, and the regulations, do appear to provide that the committee shall assess such a penalty. (7 C.F.R. 750.295, former 6 C.F.R. 485.295) In Shay, there was a separate action pending to recover the penalty, and we held that the committee could not assess the penalty, and that it was error for the court to affirm that action. Here, the government counterclaimed for the penalty, as it did in United States v. Maxwell, 8 Cir., 1960, 278 F.2d 206. The trial court considered the matter on the merits, and awarded judgment in favor of the United States on the merits. It gave no weight to the committee's assessment. We think that such a counterclaim is proper, and that the validity of the court's judgment on the counterclaim is properly before us.

Appellants make three points: (1) that the contract is an encumbrance upon the farm, and is void under Idaho law (Idaho Code Ann. § 32-912 (1948))² because Mrs. Reimann was not a signatory; (2) that the Reimanns acted in good faith, so that the penalty is not authorized; (3) that the court should have declared that the contract is terminated.

(1) The contract is not an encumbrance.

The government urges that the meaning and effect of the contract is a matter of federal law, so that the state statute does not apply. We are satisfied that the contract is governed by federal law, not state law. But we need not, and do not, decide whether we should adopt, for the purpose of this decision, the law of Idaho as being the federal law in relation to what authority a husband has, and as to what constitutes an encumbrance. (See Sam Macri & Sons, Inc. v. United States for Use of Oaks Constr. Co., 9 Cir., 1963, 313 F.2d 119, 124 n. 1, and cases there cited.) We assume, for the purposes of this case, that Idaho law should be the standard we adopt, since this is appellants' position. But we think that the court was correct in concluding that Reimann did not "encumber" the community real estate by executing the contract, and that the execution of the contract was within his powers of "management and control," expressly established by Idaho Code Ann. § 32-912.

The contract does not purport to sell, or to convey to anyone, any interest in the Reimann farm. Nor does it create an encumbrance, as that term has been defined by the Idaho Supreme Court in Fargo v. Bennett, 35 Idaho 359, 361, 206 P. 692, 693 (1922).³ The contract does not create an interest in the land; it is a purely personal agreement between Reimann and the Secretary of Agriculture, as representative of the United States. It does not follow the land — either by its express terms or under the statute and regulations that authorize it. On the contrary, both the contract and the regulations say that loss of control of the land by Reimann, including loss of control by sale of the land, would terminate the contract (7 C.F.R. 750.169(b) (1)), and his successor is not bound by it. For violation, the government's only remedies are personal remedies, for money, against Reimann (§§ 1811, 1831) and termination of the contract (§ 1831). Appellants are frank to say that they have found no Idaho case in point. Their extensive and...