Majority — Reed J.
delivered the opinion pf the Court.
The case is here on certificate from the Circuit Court of Appeals for the Ninth Circuit with a request for instructions needed in a pending cause. § 239, Jud. Code; 28 U. S. C. § 346 . The following'facts are stated: On August 10, Í934, the Federal Housing Administrator. issued a policy of insurance, under the provisions of the National Housing Act, Title 1, § 2,[1] to the California Bank, a banking corporation. On January 2, 1936, the California Bank, under the protection of this policy, made a loan to the Monterey Brewing Company.' The company paid part of the indebtedness but defaulted on the balance on February 2, 1937. On April 5, 1937, it filed a petition in bankruptcy and was adjudicated a bankrupt. Under the insurance contract the bank had to wait until 60 days after default before making claim upon the' Administrator. The 60 days expired two days before bankruptcy of the company. The bank, however, did not present its claim to the Administrator until July 3, 1937; the latter paid August 4, 1937, by draft drawn on the
1 “Sec. 2. The Administrator is authorized and empowered, upon such terms and conditions as he may prescribe, to insure banks . . . which are approved by him as eligible for credit insurance, against losses which they may sustain as a result of loans and advances of credit, and purchases of obligations representing loans and advances of credit, made by them ... for the purpose of financing alterations, repairs, and improvements upon real property. . In no' case shall the insurance granted by the Administrator under this section to any such financial institution exceed 20 per centum of the total amount of the loans, advances of credit, and purchases made by such financial institution for such purpose . . .” Act of June 27, 1934, c. 847, 48 Stat. 1246 .
The referee allowed it as a general claim only. The district court approved. In re Monterey Brewing Co., 24 F. Supp. 463 . On the appeal to the circuit court of appeals the following question, decisive of the controversy,[2] was certified:
“Where, prior to the filing of a petition for and adjudication in bankruptcy of the maker of a promissory note payable to a bank, the Federal Housing Administrator, under the provisions of the National Housing Act, insured the payee bank against the nonpayment of the note by its maker, upon which note the maker became in default more than sixty days prior to said filing and adjudication, and upon demand of the insured, bank made after the adjudication, the Federal Housing Administrator paid to the bank its claim arising from such default, and procured an assignment to the United States of the claim of the insured bank against the bankrupt which claim had not been presented or proved in bankruptcy by the insured bank, and presented such claim in the name of the United States to the trustee in bankruptcy having before him other allowed claims against the bankrupt, is such claim entitled to priority over such other claims under sec. 3466 of the Revised Statutes (31 U. S. C. A. § 191) by reason of the provisions of sec. 64 (b) (7) [11 U. S. C. A. § 104 (b) (7)]:” ‘
Section 64 (b) (7) conferred priority upon “debts owing to any person who by the laws of . . . the United States is entitled to priority: Provided, that the term
2 United States v. Mayer, 235 U. S. 55 , 66; cf. Wheeler Lumber Co. v. United States, 281 U. S. 572 , 577; Indian Motocycle Co. v. United States, 283 U. S. 570 , 573.
Although an amendment of -the National Housing Act authorized the Administrator to sue and be sued in any court of competent jurisdiction, state or federal,[4] it is not necessary in answering the present certificate to determine whether by this addition the Congress intended to give the Administrator the status of a corporation or other entity distinct from the United States and by such status to confer on or withhold from claims of the Federal Housing Administration against bankrupts the advantages of § 3466.[5] We can deal .only with a claim of the Federal Housing Administration assigned to the United States after the adjudication in bankruptcy of the obligor. It is assumed that such a claim belongs to and is made by the United States.[6]
3 Act of May 27, 1926, c. 406, 44 Stat. 667 , 11 U. S. C. § 104 (b) (7). This section has been amended by the Act of June 22, 1938, e. 575, § 64, 52 Stat. 874 .
4 Act of August 23, 1935, c. 614, § 344 (a), 49 Stat. 722 .
5 The purpose of the amendment was said to be “clarifying.” Sen. Rep. No. 1007 on H. R. 7617, 74th Congress, 1st Session, p. 24. The House Report merely stated its substance. H. R. Rep. No. 1822 on H. R. 7617, 74th Congress, 1st Session, p. 57. The Congressional Record is silent on this clause of the Banking Act of 1935. A corporation wholly owned by the United States is held without the advantages of § '3466. Sloan Shipyards v. U. S. Fleet Corporation, 258 U. S. 549 , 570.
6 Cf. Wagner v. McDonald, 96 F. 2d 273 , 274; In re Dickson’s Estate, 84 P. 2d 661 , 664; DuPont de Nemours & Co. v. Davis, 264 U. S. 456 ; Clallam County v. United States, 263 U. S. 341 ; North Dakota-Montana Wheat Growers Assn. v. United States, 66 F. 2d 573 , 576-577.
7 This is not in accord with the practice under Title I of the National Housing Act. The act is administered so as to create an insurance reserve for each approved financial institution of not to exceed the authorized percentage of the total amount of qualified paper. Cf. Regulations, Federal Housing Administration, Property Improvement Loans, 3 Federal Register 358, regulation number 17.
8 “The question of the financial condition of the borrower is left to the reasonable judgment of the insured institution as a credit matter. The borrower must furnish the lending institution a financial or credit statement, approved as to form by the Administrator, which in the judgment of the insured institution shows the borrower to be solvent, with reasonable ability to pay the obligation and in other respects a reasonable credit risk in view of the insurance provided by the National Housing Act.”
The regulation and the credit statement certainly do not supply the facts necessary to the conclusion that this particular form of credit statement was used. As the certificate does not show the State in which the note was executed, payable or enforceable, we are left to speculate as to the applicable law of indemnity. It is not clear that a voluntary guarantor can recover in every jurisdiction from the involuntary principal who has not requested the service.[9] But even if we assume that such a guarantor may recover upon an implied promise of reimbursement, the rule is not effective here. The statement of the case and the question certified show that the claim in bankruptcy of the Government is based upon the note, duly assigned to it after bankruptcy. As no proof was made of any claim for reimbursement, such a claim is not involved.[10]
The claim on the note, assigned to the United States subsequently to the maker’s bankruptcy, has priority, if at all, by virtue of the general provisions of § 3466, as recognized by § 64 (b) (7) of the Bankruptcy Act.[11]
9 Cf. Leslie v. Compton, 103 Kan. 92 ; 172 P. 1015 ; Marsh v. Hayford, 80 Me. 97 ; 13 A. 271 ; McPherson v. Meek, 30 Mo. 345 .
10 Cf. Insley v. Garside, 121 F. 699 , 702. Cf. also § 57 (i)'which provides that. “Whenever a creditor, whose claim against a bankrupt estate is secured by the individual undertaking of any person, fails to prove such claim, such person may do so in the creditor’s name, and if he discharge such undertaking in whole or in part he shall be subrogated to that extent to the rights of the creditor.” Act of July 1, 1898, c. 541, § 57, 30 Stat. 560 , 11 ü. S. C. § 93.
11 See note 3, supra.
12 The Government summarizes the legislative background as follows: “the Act of July 31,1789, Sec. 21, c. 5, 1 Stat. 29 , 42, first gave the United States priority but was limited to debts due on bonds for duties. The Act of May 2, 1792, Sec. 18, c. 27, 1 Stat. 259 , 263, allowed sureties who paid their debts to the United States to exercise their priority. The Act of March 3, 1797, Sec. 5, e. 20, 1 Stat. 512 , 515, extended the priority to all debts due from any person. The Act of March 2, 1799, Sec. 65, c. 22, 1 Stat. 627 , 676, applied to bonds'for duties. R. S., Sec. 3466 is derived from the Acts of 1797 and 1799.”
13 United States v. Fisher, 2 Cranch 358 ; Harrison v. Sterry, 5 Cranch 289 , 298-299; United States v. State Bank, 6 Pet. 29 , 35; Beaston v. Farmers' Bank, 12 Pet. 102 , 134; Lewis v. United States, 92 U. S. 618 , 621; Bramwell v. U. S. Fidelity & Guaranty Co., 269 U. S. 483 , 487; Price v. United States, 269 U. S. 492 , 500.
14 Beaston v. Farmers’ Bank, supra.
15 Mellon v. Michigan Trust Co., 271 U. S. 236 , 239.
16 Sloan Shipyards v. U. S. Fleet Corp., 258 U. S. 549 , 570. Even though private parties might have participated in stock ownership under the law. See p. 565.
We are of the view that § 3466 is inapplicable to general claims in bankruptcy transferred to the United States, or to which it has become subrogated on payment, after the filing of the petition, for the reason that the rights of creditors are fixed by the Bankruptcy Act as of the filing of the petition in bankruptcy. This-is true both as to the bankrupt and among themselves.[19] The assets at that time are segregated for the benefit of creditors.[20] The transfer of the assets to; someone for application.to “the debts of the insolvent, as the rights'
17 Mellon v. Michigan Trust Co., supra, 240.
18 United States v. Guaranty Trust Co., 280 U. S. 478 , 485-86.
19 White v. Stump, 266 U. S. 310 , 313; In re C. H. Earle, Inc., 2 F. Supp. 15 , affirmed on the opinion below, 65 F. 2d 1013 . Cf. Spokane County v. United States, 279 U. S. 80 , 93; United States; v. Oklahoma, 261 U. S. 253 , 260, as to receivership proceedings. ' The lower courts have divided upon the issue whether a Federal Housing -Administration claim is entitled to priority. Priority has been given in Wagner v. McDonald, 96 F. 2d 273 ; In re Wilson, 23 F. Supp. 236 ; In re T. N. Wilson, Inc., 24 F. Supp. 651 ; cf. In re Dickson’s Estate, 84 P. 2d 661 . Priority has been denied in In re Hansen Bakeries, Inc., 103 F. 2d 665 ; Federal Housing Administra tor v. Moore, 90 F. 2d 32 ; In re Stamford Auto Supply Co., 25 F. Supp. 530 ; In re Miller, 25 F. Supp. 336 ; cf. Paul v. Paul Lighting Fixture Co., 13 Ohio Op. 27 . The assignment was made prior to bankruptcy or insolvency in the Wagner and Dickson cases. In the Wilson and T. N. Wilson, Inc., cases the time of assignment is uncertain. In the remaining cases' it came after bankruptcy or insolvency.
20 Mueller v. Nugent, 184 U. S. 1 , 14; May v. Henderson, 268 U. S. 111 , 117.
The question certified should therefore be answered in the negative. _ „
_ Question answered no.
The Chief Justice and Mr. Justice Douglas took no part in the consideration or decision of this case.
21 Bramwell v. U. S. Fidelity & Guaranty Co., 269 U. S. 483 , 490.
Cases cited
- 24 F. Supp. 463 24 F. Supp. 463 p. 202