Woodbury v. United States

• Citation: 192 F. Supp. 924
• Decision Date: 08 February 1961
• Docket Number: Civ. No. 9403.
• Parties: Ray B. WOODBURY, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Oregon

192 F. Supp. 924

Ray B. WOODBURY, Plaintiff, v. UNITED STATES of America, Defendant.

Civ. No. 9403.

United States District Court D. Oregon.

February 8, 1961.

King, Miller, Anderson, Nash & Yerke, Norman J. Wiener, Paul R. Meyer, Portland, Or., for plaintiff.

C. E. Luckey, U. S. Atty., Portland, Or., for defendant.

KILKENNY, District Judge.

Plaintiff claims the right to recover $853,676.82 from defendant under the Federal Tort Claims Act (Title 28 U.S. C.A. §§ 1346(b) and 2671 through 2680). The claim grows out of the plaintiff's interest in a housing development at Kodiak, Alaska, which development involved the plaintiff and several governmental agencies. In order to fully understand the issues, it is necessary to have a clear picture of the agencies involved.

Housing and Home Finance Agency and Housing and Home Finance Administrator (hereinafter called HHFA) was created by the Reorganization Plan No. 3 of 1947 (61 Stat. 954, 5 U.S.C.A. following section 133y-16). Under this plan the various functions of the government relating to housing were consolidated within HHFA. At present, HHFA consists of five constituent agencies or units dealing with various aspects of the national housing program:

(1) Federal Housing Administration (hereinafter referred to as "FHA"), an agency created by the President pursuant to authorization by Congress, which engages in programs of mortgage insurance.

(2) Federal National Mortgage Association, a statutory corporation (hereinafter referred to as "FNMA"), which provides a secondary market for the purchase and discounting of mortgages.

(3) Urban Renewal Administration, an agency concerned with programs of urban renewal and slum clearance.

(4) Public Housing Administration, an agency which deals with programs relating to federally financed housing.

(5) Community Facilities Administration (hereinafter referred to as "CFA"), an agency which engages in a variety of programs relating to housing and community facilities not covered by the other four constituent agencies. CFA was formerly called the Community Facilities and Special Operations branch (CF&SO), but the change in its name did not affect its functions or authority. Among the programs administered by CFA were those related to Alaska housing and prefabricated housing.

The agencies related to Urban Renewal and Public Housing had no connection with the Aleutian Homes project.

The Housing and Home Finance Administrator (hereinafter referred to as "Administrator") is the head of HHFA and is responsible for the general supervision and coordination of the statutory functions of the constituent agencies of HHFA.

The original interest of the government in prefabricated housing was contained in the Veterans Emergency Housing Act of 1946, 60 Stat. 207, Chap. 268, § 12(a). The government functions relating to this program of prefabricated housing were, at that time, vested in the Reconstruction Finance Corporation, a corporation (hereinafter referred to as "RFC"). The powers of RFC which were applicable to its functions in the field of prefabricated housing were set out in 15 U.S.C.A. § 603. The powers and functions of RFC which related to prefabricated housing were transferred to HHFA by Reorganization Plan No. 23 of 1950 (64 Stat. 1279, 5 U.S.C.A. following section 133z-15), as limited by statute. By Title 12 U.S.C.A. § 1723d the functions of HHFA under Section 2 of Reorganization Plan No. 22 of 1950, 5 U.S.C.A. following section 133z-15 were transferred to FNMA August 2, 1954.

Provisions for the making of loans for prefabricated housing were added as § 102a of the Housing Act of 1948 (62 Stat. 1268) by the Critical Defense Housing Areas Act of 1951 (65 Stat. 293, 12 U.S.C.A. § 1701g-1).

The powers given the Housing and Home Finance Administrator with respect to prefabricated housing, set forth in 12 U.S.C.A. § 1701g-2, include the following:

(A) All the powers and functions transferred to him by Reorganization Plan No. 23 of 1950.

(B) The powers, functions and duties set forth in 12 U.S.C.A. § 1749a, except subsection (c) (2) thereof.

(C) The power to "take any and all actions determined by him to be necessary or desirable in making, servicing, compromising, modifying, liquidating, or otherwise dealing with or realizing on loans thereunder. Such powers, functions, and duties may be exercised in the several States, the District of Columbia, and the Territories and possessions of the United States."

Included in the powers of the Administrator, set forth in § 1749a to which reference is made in § 1701g-2(1) as being applicable to the prefabricated housing program, are the following:

"(3) sue or be sued;

"(4) foreclose on any property or commence any action to protect or enforce any right conferred upon him by any law, contract, or other agreement, and bid for and purchase at any foreclosure or any other sale any property in connection with which he has made a loan pursuant to this subchapter. In the event of any such acquisition, the Administrator may, notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease and otherwise deal with, such property: Provided, That any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property;

"(5) enter into agreements to pay annual sums in lieu of taxes to any State or local taxing authority with respect to any real property so acquired or owned;

"(6) sell or exchange at public or private sale, or lease, real or personal property, and sell or exchange any securities or obligations upon such terms as he may fix;

"(7) obtain insurance against loss in connection with property and other assets held;

"(8) subject to the specific limitations in this subchapter, consent to the modification, with respect to rate of interest, time of payment of any installment of principal or interest, security, or any other term of any contract or agreement to which he is a party or which has been transferred to him pursuant to this subchapter; and;

"(9) include in any contract or instrument made pursuant to this subchapter such other covenants, conditions, or provisions as he may deem necessary to assure that the purposes of this subchapter will be achieved."

The Independent Offices Appropriation Act of 1955 passed on June 24, 1954, as Ch. 359, 68 Stat. 272 (83rd Cong.2d Sess., Public Law 428) established as of July 1, 1954, a revolving fund with which the Administrator could account for all assets and liabilities in connection with various programs, including:

"* * * functions transferred under Reorganization Plan No. 23 of 1950 (5 U.S.C. 133z-15, note), or authorized under Sections 102, 102a, 102b, and 102c of the Housing Act of 1948, as amended (12 U.S.C. 1701 g-1701g-3 Prefabricated Housing Program); * * * notes or other obligations purchased pursuant to the Alaska Housing Act, as amended (48 U.S.C. 484(a)); * * *" It was further provided:

"That said fund shall be available for all necessary expenses (including administrative expenses) in connection with the liquidation of the programs carried out pursuant to the foregoing provisions of law, including operation, maintenance, improvement, or disposition of facilities, and for disbursements pursuant to outstanding commitments against moneys herein authorized to be credited to said fund, repayment of obligations to the Treasury, and refinancing and refunding operations on existing loans * * *."

After non-payment of its note, the Aleutian Homes, Inc. project was included in the liquidating program administered by HHFA under the revolving fund established by this Act.

FHA was established in 1934 with powers as codified in 12 U.S.C.A. § 1702. It was transferred as a constituent agency to HHFA by Reorganization Plan No. 3 of 1947 (61 Stat. 954, 5 U.S.C.A. following section 133y-16). The powers to insure conventional mortgages on individual houses are contained in Title II, Section 203, of the National Housing Act of 1934 (48 Stat. 1248, Chapter 847, 12 U.S.C.A. § 1709). That section was amended by the Housing Act of 1954 (68 Stat. 591) to change the value ratio of loans which FHA is authorized to insure thereunder.

Under the provisions of the Alaska Housing Act, FHA was given authority to insure mortgages in Alaska in a dollar amount up to 50 percent higher than its authority with respect to mortgages on property located in the United States. Further it gave FHA authority to insure mortgages in Alaska without the requirement, applicable to housing in the states, that the commissioner find the project to be economically sound or an acceptable risk (63 Stat. 57, 65 Stat. 315, 12 U.S. C.A. § 1715d).

The creation of FNMA and the establishment of its powers is set out in 12 U.S.C.A. §§ 1716 through 1723d.

FNMA was transferred from the jurisdiction of RFC to HHFA to be "administered subject to the direction and control" of HHFA by Reorganization Plan No. 22 of 1950 (64 Stat. 1277, 5 U.S.C.A. following section 133z-15, as limited by statute. By Title 12 U.S.C.A. § 1723d the functions of HHFA under Section 2 of Reorganization Plan No. 22 of 1950 were transferred to FNMA August 2, 1954.

Likewise, it is necessary to know the names of the non-Federal government agencies and private organizations involved or in some way connected. They are:

A. Alaska Housing Authority. Agency of the Territory of Alaska concerned with housing problems in Alaska.

B. City of Kodiak, Alaska. The city through its officials, principally Mayor Lee C. Bettinger, took active interest in promoting a housing project for the City under private sponsors, and provided tax concessions for streets and other support for the project.

C. Hubbell and Waller. An...