1. Under R.S. § 3466, which provides that
"whenever the estate of any deceased debtor . . . is
insufficient to pay all the debts due from the deceased, the debts
due to the United States shall be first satisfied,"
a claim asserted in a state probate proceeding by an official of
the Farm Credit Administration for and on behalf of the United
States, on account of unpaid emergency feed and crop loans made
pursuant to the Acts of February 23 and June 19, 1934, is entitled
to priority. Pp.
330 U. S.
541-545.
2. A debt owed the Farm Credit Administration is a debt owed the
United States within the meaning of R.S. § 3466. Pp.
330 U. S.
541-542.
3. The priority given by R.S. § 3466 to debts due to the United
States is unaffected by the fact that a claim based upon such a
debt is filed in the name of an agency of the United States or an
authorized officer of such an agency. Pp.
330 U. S.
542-543.
4. There is no irreconcilable conflict between making emergency
loans to distressed farmers and granting priority to the collection
of such loans pursuant to R.S. § 3466. Pp.
330 U. S.
543-545.
5. Only the plainest inconsistency would warrant an implied
exception to the priority established by R.S. § 3466. Pp.
330 U. S.
544-545.
70 S.D. ___, 23 N.W.2d 281, reversed.
A claim by an official of the Farm Credit Administration for and
on behalf of the United States against the estate of an insolvent
decedent in a state probate proceeding was denied priority under
R.S. § 3466 by a probate court. The State Supreme Court affirmed.
70 S.D. ___, 23 N.W.2d 281. This Court granted certiorari. 329 U.S.
703.
Reversed, p.
330
U. S. 545.
Page 330 U. S. 540
MR. JUSTICE MURPHY delivered the opinion of the Court.
We are faced here with the problem of whether, in a state
probate proceeding, a claim asserted by the Farm Credit
Administration through certain of its officials for and on behalf
of the United States is entitled to priority under § 3466 of the
Revised Statutes, 31 U.S.C. § 191.
The Governor of the Farm Credit Administration, pursuant to the
Acts of February 23, 1934, [
Footnote 1] and June 19, 1934, [
Footnote 2] extended emergency feed and crop loans
totalling $370.00 to Wilhelm Buttke, a South Dakota farmer. Most of
these loans remained unpaid. On December 26, 1941, Buttke died
intestate, leaving an estate insufficient to pay all of his debts.
Respondent was appointed administrator of the estate. On March 2,
1942, an authorized agent of the Governor of the Farm Credit
Administration filed in the County Court of Roberts County, South
Dakota, a claim against the estate for $523.80, the amount of the
unpaid indebtedness plus interest. This claim was made "for and on
behalf of the United States of America," and a priority therefor on
behalf of the United States was asserted under § 3466 of the
Revised Statutes.
The County Court denied preference to this claim. But it did
allow the claim in the amount of $79.53, which represented the
pro rata share of a common creditor's claim. This decision
was affirmed by the Circuit Court of the Fifth Judicial Circuit of
South Dakota and by the Supreme Court of South Dakota. 23 N.W.
Page 330 U. S. 541
2d 281. The latter court felt that the Acts of February 23,
1934, and June 19, 1934, created an exception to § 3466, and that
the claimed priority should accordingly be refused on the authority
of
United States v. Guaranty Trust Co., 280 U.
S. 478. We granted certiorari because of the important
problems thereby raised. 329 U.S. 703.
The relevant portion of § 3466 of the Revised Statutes provides
that
". . . whenever the estate of any deceased debtor, in the hands
of the executors or administrators, is insufficient to pay all the
debts due from the deceased, the debts due to the United States
shall be first satisfied. . . ."
Initially, it is suggested that § 3466 is inapplicable, since
the claim in issue is not a debt due to the United States. The
claim grows out of the seven notes executed by the deceased to "the
Governor of the Farm Credit Administration, or order at Washington,
D.C." These notes stated that they were "given as evidence of a
loan made by the Governor of the Farm Credit Administration." On
the premise that the Farm Credit Administration is an entity
separate and distinct from the United States Government, the
argument is made that obligations due the Farm Credit
Administration fall outside the priority established by § 3466. We
cannot agree.
The Farm Credit Administration is plainly one of the many
administrative units of the United States Government, established
to carry out the functions delegated to it by Congress. It bears
none of the features of a government corporation with a legal
entity separate from that of the United States, whatever difference
that might make as to the application of § 3466.
Cf. Sloan
Shipyards Corp. v. United States Fleet Corp., 258 U.
S. 549. It had its inception in 1933 as an independent
agency, assuming the functions of the Federal Farm Board and the
Federal Farm Loan Board. Executive Order No. 6084. In 1939,
Page 330 U. S. 542
it was transferred to the Department of Agriculture and placed
under the general supervision and direction of the Secretary of
Agriculture. Reorganization Plan No. 1, § 401(a), 53 Stat. 1429, 4
Fed.Reg. 2730. Its functions, personnel, and property were then
consolidated in 1942 with those of certain other agencies to form
the Food Production Administration of the Department of
Agriculture. Executive Order No. 9280, 7 Fed.Reg. 10179. At no time
has the Farm Credit Administration been other than an
unincorporated agency of the United States Government,
administering and lending funds appropriated by Congress out of the
United States Treasury and returning the money to the Treasury upon
repayment. In short, it is an integral part of the governmental
mechanism. And the use of a name other than that of the United
States cannot change that fact.
United States v. Fontenot,
33 F. Supp. 629;
In re Wilson, 23 F. Supp.
236;
Federal Reserve Bank of Dallas v. Smylie, 134
S.W.2d 838;
Helms v. Emergency Crop & Seed Loan
Office, 216 N.C. 581, 5 S.E.2d 822.
See also North
Dakota-Montana Wheat Growers' Assn. v. United States, 66 F.2d
573. Hence, any debt owed the Farm Credit Administration is a debt
owed the United States within the meaning of § 3466.
Moreover, the priority given by § 3466 to a debt due to the
United States is unaffected by the fact that a claim based upon
that debt is filed in the name of an agency of the United States or
an authorized officer of such an agency. It is enough that there is
an obligation owed the United States. Whether the claim is filed in
the name of the United States or in the name of an officer or
agency is immaterial; in the latter instance, the claim is
necessarily filed on behalf of the United States and the legal
effect is the same as if it had been filed in that name. Nothing in
the language or policy of § 3466 justifies any other conclusion. It
follows that the method of filing in
Page 330 U. S. 543
this case cannot be questioned. The claim was filed in the name
of the Governor of the Farm Credit Administration "for and on
behalf of the United States of America" -- an explicit recognition
of the legal realities involved.
The main contention, however, is that the purpose of the
statutes under which the loans were made is inconsistent with §
3466, thereby rendering it inapplicable. The Acts of February 23,
1934, and June 19, 1934, authorized feed and crop loans to farmers
in drought and storm-stricken areas of the nation. It is said that
the prime purpose of these Acts was to restore the credit of the
farmers, and that to give effect to § 3466 would impair that
credit. Reliance is placed upon
United States v. Guaranty Trust
Co., supra. This Court there held that § 3466 was inapplicable
to the collection of loans made by the Government to railroad
carriers to rehabilitate and maintain their credit status; it was
felt that to give priority under such circumstances would defeat
the purpose of the legislation by impairing the credit of the
railroads.
See also Cook County National Bank v. United
States, 107 U. S. 445.
But it is manifest that the purpose of the Acts of February 23,
1934, and June 19, 1934, was to give emergency relief to distressed
farmers, rather than to restore their credit status. These were but
two of a series of emergency seed and crop loan statutes [
Footnote 3] enacted at various times
from 1921 to 1938, a period when farmers were the victims of
repeated crop failures and adverse economic conditions. Their
credit was often impaired, but their most urgent need was for money
to purchase feed and to plant crops; without such money, distress
and unemployment
Page 330 U. S. 544
might have been their lot. It was to meet that urgent need that
Congress passed these statutes.
More specifically, the two Acts under consideration were
designed to make loans available to those farmers who were unable
to secure credit from the Production Credit Associations, organized
pursuant to the Farm Credit Act of 1933. [
Footnote 4] It was recognized that many farmers could
not qualify for loans from those Associations. Some method of
lending aid and assistance to those who had no credit and no money
with which to buy feed for their livestock and seeds for their
crops was essential in the absence of a more direct form of
Government relief. S.Rep. 148, 73d Cong., 2d Sess.; H.Rep. 521, 73d
Cong.2d Sess. As was said by Representative Kerr,
"Let it be remembered that the Government is not seeking to make
an investment; this is simply an endeavor to finance the farmers of
this country who are utterly unable to finance themselves."
78 Cong.Rec.1959.
See United States v. Thomas, 107 F.2d
765, 766;
Person v. United States, 112 F.2d 1, 2.
We conclude that there is no irreconcilable conflict between
giving emergency loans to distressed farmers and giving priority to
the collection of these loans pursuant to § 3466. Such priority
could in no way impair the aid which the farmers sought through
these loans, nor could it embarrass the farmers in their daily
operations. Moreover, these loans called for a first lien on crops
growing or to be grown, or on livestock. The conditions prevailing
in 1934 made this type of security uncertain, and there is no
indication that Congress meant such a lien to be the sole security
to which the Government could look for repayment.
We reiterate what was said in
United States v. Emory,
314 U. S. 423,
314 U. S. 433:
"Only the plainest inconsistency
Page 330 U. S. 545
would warrant our finding an implied exception to the operation
of so clear a command as that of § 3466." In this case, as in that,
we think such inconsistency is wholly wanting.
United States v.
Guaranty Trust Co., supra, is therefore inapposite.
Reversed.
MR. JUSTICE DOUGLAS would affirm the judgment on the authority
of
United States v. Guaranty Trust Co., 280 U.
S. 478.
[
Footnote 1]
48 Stat. 354.
[
Footnote 2]
48 Stat. 1021, 1056.
[
Footnote 3]
41 Stat. 1347; 42 Stat. 467; 43 Stat. 110; 44 Stat. 1245, 1251;
45 Stat. 1306, as amended by 46 Stat.3; 46 Stat. 78, as amended by
46 Stat. 254; 46 Stat. 1032, as amended by 46 Stat. 1160; 46 Stat.
1276; 47 Stat. 5, 47 Stat. 795; 48 Stat. 354; 48 Stat. 1056; 49
Stat. 28; 50 Stat. 5; 52 Stat. 27.
[
Footnote 4]
48 Stat. 257.