United States v. Kay, 200.

• Decision Date: 05 April 1937
• Docket Number: No. 200.,200.
• Citation: 89 F.2d 19
• Parties: UNITED STATES v. KAY.
• Court: U.S. Court of Appeals — Second Circuit

89 F.2d 19 (1937)

UNITED STATES v. KAY.^*

No. 200.

Circuit Court of Appeals, Second Circuit.

April 5, 1937.

F. R. Serri, of Brooklyn, N. Y., for appellant.

Leo J. Hickey, U. S. Atty., of Brooklyn, N. Y. (Vine H. Smith and James G. Scileppi, Asst. U. S. Attys., of Brooklyn, N. Y., of counsel), for the United States.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

MANTON, Circuit Judge.

The appellant was charged in an indictment with violations of section 1467 (a) and (e), 12 U.S.C.A. (Home Owners' Loan Act, 48 Stat. 128, as amended, 12 U.S.C. A. § 1461 et seq.). There were twenty-five counts, three of which were withdrawn during the trial. Appellant was convicted on two counts, 5 and 15, based on section 1467 (a), which charged that the appellant "for the purpose of influencing the action of the Home Owners' Loan Corporation * * * unlawfully, knowingly, wilfully and feloniously" made a false statement in writing to the corporation consisting of overstatements of the amounts due on mortgages upon the properties of persons applying for loans. Of the twenty counts based upon section 1467 (e), appellant was convicted upon six; four of these counts, 8, 14, 20, and 24, charged her with contracting to receive fees other than those "authorized and required by the corporation," and counts 12 and 25, the unlawful receiving of such fees. The sentence imposed which was suspended on one of the eight counts, was imprisonment of a year and a day, the terms on all counts to run concurrently.

Notice of appeal and assignment of errors were filed June 1, 1936, and an order extending the time to file a bill of exceptions was granted June 30, 1936. Though this order is not included in the record, it is clear from later orders which purported to further prolong the period of extension that the bill of exceptions was not filed within the time specified by the order of June 30, and the appellant does not contend otherwise. The bill of exceptions was not settled and filed until October, 1936. The power to grant an extension resided with the trial judge, subject only to specific exceptions U. S. v. Adamowicz, 82 F.(2d) 288 (C.C.A.2), cert. den. 298 U.S. 664, 56 S.Ct. 748, 80 L.Ed. 1388, and this power could only be exercised within a period of thirty days after taking the appeal U. S. v. Ray, 86 F.(2d) 942 (C.C.A.2), cert. granted Feb. 8, 1937, 57 S.Ct. 435, 81 L.Ed. ___. This is the requirement of Rule 9 of the Supreme Court Rules of Practice and Procedure in Criminal Cases (28 U.S. C.A. following section 723a). Although the appellant obtained one valid extension within the permissible period, the bill of exceptions was not settled and filed in due time, and we are therefore foreclosed from considering the errors that are assigned respecting the bill of exceptions. This is true notwithstanding any contrary stipulations of the parties or the ineffectual orders of the trial judge made subsequent to June 30 granting extensions. Therefore, in accordance with rule 8 (28 U.S.C. A. following section 723a), our consideration on this appeal is limited to the sufficiency of the indictment and the judgment of the court below. U. S. v. Adamowicz, supra.

In contesting the validity of the indictment, appellant raises the question of the constitutionality of the Home Owners' Loan Act of 1933, and we must therefore inquire into the powers relied upon for its enactment and the extent to which those powers have been exercised. The act was intended to supplement the Federal Home Loan Bank Act (47 Stat. 725 12 U.S.C.A. § 1421 et seq. and notes) by supplying direct relief to home owners. For this purpose, the Home Owners' Loan Corporation was organized with a capital stock which was not to exceed $200,000,000, and which was wholly subscribed for by the Secretary of the Treasury on behalf of the United States. To further finance its activities, the corporation was authorized to issue bonds originally in the amount of $2,000,000,000 but later increased to $4,750,000,000, the bonds to bear interest at 4 per cent. and to be guaranteed both as to interest and principal by the United States.^* For a period of three years after June 30, 1933, the corporation was authorized to exchange its bonds, in a limited amount, for mortgages and to pay, within limits, any accrued taxes, assessments, necessary maintenance and repairs, and incidental costs in cash. The maximum interest payable by the home owner is 5 per cent. If the mortgagee refuses to accept the bonds and the home owner is unable to obtain a loan through ordinary channels, the corporation is authorized to make limited cash advances at interest not to exceed 6 per cent. The corporation carries the indebtedness as a first lien for 15 years, amortized monthly, quarterly, semiannually, or annually as necessity requires. Also, bonds may be exchanged and cash advanced to redeem foreclosed property. The act only deals with homes valued at not over $20,000 and no single loan, whether in bonds or cash, may exceed $14,000.

In creating this governmental agency and investing it with the described functions, Congress relied on its power to tax, borrow, and appropriate public money. The power "to lay and collect Taxes * * * and provide for the * * * general welfare of the United States * * *" is explicitly conferred (article 1, section 8, clause 1, U.S.Constitution), and necessarily contains the implied power of appropriation. See Field v. Clark, 143 U.S. 649, 695, 12 S.Ct. 495, 36 L.Ed. 294. The power "to borrow money on the credit of the United States" is granted without express limitation (article 1, section 8, clause 2). See Legal Tender Cases, 110 U.S. 421, 444, 4 S.Ct. 122, 28 L.Ed. 204. In taxing and making appropriations for the general welfare, Congress is not confined within the scope of the delegated powers but must merely act in furtherance of general or national as distinguished from local purposes. U. S. v. Butler, 297 U.S. 1, 65, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914. And the power to borrow can be subject to no other or greater limitation.

The character of the legislation enacted by Congress over a span of years indicates what has been accepted to be the expenditure of public funds for a public purpose. Appropriations have been made for vocational rehabilitation (48 Stat. 389), for state reforestration and the promotion of timber crops (43 Stat. 653 16 U.S.C.A. §§ 471, 499 note, 505, 515, 564 et seq.), for the education of the blind (20 Stat. 468 20 U.S.C.A. §§ 101 and note, 102, 104), for the support of rural schools (39 Stat. 929 20 U.S.C.A. § 11 et seq.), for the promotion of agricultural extension work (38 Stat. 372 7 U.S.C.A. § 341 et seq.), for the creation of a bureau of home economics (46 Stat. 1271), for cod subsidies (1 Stat. 229), and bounties for sugar producers (26 Stat. 583; see U. S. v. Realty Co., 163 U.S. 427, 16 S.Ct. 1120, 41 L.Ed. 215), for the promotion of the welfare and hygiene of maternity and infancy (...