Stone v. United States

• Decision Date: 13 January 1961
• Docket Number: No. 16563.,16563.
• Citation: 286 F.2d 56
• Parties: Tom STONE, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

286 F.2d 56 (1961)

Tom STONE, Appellant, v. UNITED STATES of America, Appellee.

No. 16563.

United States Court of Appeals Eighth Circuit.

January 13, 1961.

Albert V. Hass, Chariton, Iowa, for appellant.

Conrad A. Amend, Asst. U. S. Atty., Des Moines, Iowa, for appellee; Roy W. Meadows, U. S. Atty., and Richard J. Wells, Asst. U. S. Atty., Des Moines, Iowa, on the brief.

Before VOGEL and BLACKMUN, Circuit Judges, and DAVIES, District Judge.

RONALD N. DAVIES, District Judge.

This is an appeal by the defendant, Tom Stone, from a summary judgment entered against him in the United States District Court for Southern Iowa. The action was commenced by the United States of America to recover damages from the defendant based upon monies erroneously paid to him for the 1955 marketing year as incentive payments under the National Wool Act of 1954 (7 U.S.C.A. § 1781 et seq.). The complaint was in four counts, the first two seeking recovery under the False Claim Act (31 U.S.C.A. § 231 and § 232) and the third and fourth counts, after amendment, seeking recovery based upon mistake of fact or law. Jurisdiction is conferred by 28 U.S.C.A. § 1345.

The trial court granted summary judgment for the plaintiff on Counts Three and Four and certified under Rule 54(b), F.R.Civ.P., 28 U.S.C.A., that final judgment be entered in favor of the plaintiff, thus making it appealable.

The defendant Stone had been in the wool producing business for many years prior to 1955 on farms owned or leased by him in Lucas County, Iowa. He had also been a wool buyer and operated a wool house in Chariton, Iowa, which he called the Tom Stone Cordage Company. Sometime during 1955 the defendant inquired of one Guilford F. Davis, the Lucas County A.S.C. office manager, what was necessary for him to do in order to qualify for payments under the wool program instituted by the United States Department of Agriculture. Davis informed defendant that he would have to sell his wool before March 31, 1956, and that his application for payments must be supported by sales invoices made out at the time of sale showing the quantity of wool, date of sale, price and the signature of the buyer. The defendant then inquired whether he could sell the wool shorn from sheep on his farms to his wool house, the Tom Stone Cordage Company. Davis advised the defendant that such sales would qualify provided bona fide evidence showed the sales from defendant's farms to the cordage company defendant owned.

On two occasions in 1955 defendant filed in Lucas County A.S.C. office applications for incentive payments (CCC Wool Form 46) and the original sales documents evidencing the wool sales as required by the regulations. (6 C.F.R. Sec. 472.600 et seq.; 20 F.R. 2011.) The transactions as shown by the sales tickets were sales in which the defendant acted both as seller and buyer. These purported sales do not, of course, constitute sales within the meaning of the Wool Act and regulations implementing the Act, nor does the defendant so contend, but he argues that summary judgment should not have been granted against him, insisting there were issues of fact for determination.

The National Wool Act of 1954 provided that the Secretary of Agriculture should support the prices of wool and mohair, respectively, to the producers thereof by means of loans, purchases, payments or other operations, through the Commodity Credit Corporation. 7 U.S. C.A. § 1782.

Defendant contends that when Congress chartered the Commodity Credit Corporation and gave it power to sue or be sued, governmental immunity was waived; and that when the Corporation engages in private litigation, the Court should view the controversy in the same manner it would between private litigants; and that if the United States substitutes itself as the real party in interest, no greater advantages would inure. It is then argued that the defense of estoppel was available to the defendant against the United States by reason of the alleged acts and advice of the representative of Commodity Credit Corporation upon which the defendant relied; and further, that the defendant should have been allowed to show that the United States had not been damaged to the full extent of the incentive payments and that defendant had an equitable right to retain the payments based upon his ultimate marketing of the same wool during the marketing year, which ultimate marketing met the requirements of the Wool Incentive Program and which would have entitled defendant to incentive payments had he made application instead of relying on plaintiff's agent.

The defendant's contention that Commodity Credit Corporation and the United States are not one and the same when the Corporation is involved in litigation is rejected on the basis of the holding in Rainwater v. United States, 356 U.S. 590, 591, 592, 78 S.Ct. 946, 948 2 L.Ed.2d 996.

"Commodity is an `agency and instrumentality of the United States, within the Department of Agriculture, subject to the general supervision and direction of the Secretary of Agriculture.\'³ It was created by Congress to support farm prices and to assist in maintaining and distributing adequate supplies of agricultural commodities. Its capital was provided by congressional appropriation. Any impairment of this capital, which at times has been great due to the nature of its activities,⁴ is replaced out of the public treasury; any gains are returned to that treasury. All of its officers and other personnel are employees of the Department of Agriculture and are compensated as such. Like other government corporations, Commodity is subject to the provisions of the Government Corporation Control Act which provides such close budgetary, auditing and fiscal controls that little more than a corporate name remains to distinguish it from the ordinary government agency.⁵ In brief, Commodity is simply an administrative device established by Congress for the purpose of carrying out federal farm programs with public funds." (Emphasis supplied.)

Moreover, as it was so aptly stated in Reconstruction Finance Corp. v. Tuolumne Gold Dredging Corp., D.C., 137 F.Supp. 855, 857, affirmed, Walter W. Johnson Co. v. R. F. C., 9 Cir., 230 F.2d 479, certiorari denied 352 U.S. 832, 77 S.Ct. 48, 1 L.Ed.2d 52:

"Courts

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