RESPONDENT: John Hancock Mutual Life Insurance Company
LOCATION: Eagle Coffee Shoppe
DOCKET NO.: 18
DECIDED BY: Warren Court (1958-1962)
CITATION: 364 US 301 (1960)
ARGUED: Oct 13, 1960
DECIDED: Nov 07, 1960
Facts of the case
Media for United States v. John Hancock Mutual Life Insurance Company
Audio Transcription for Oral Argument - October 13, 1960 in United States v. John Hancock Mutual Life Insurance Company
-- States, Appellant, versus John Hancock Mutual Life Insurance Company, et al.
George Cochran Doub:
Mr. Chief Justice, members of the Court.
This is an appeal from the -- a decision of the Supreme Court of Kansas refusing to recognize a federal right of redemption granted the United States in a federal statute, refusing to do -- sell in a mortgage foreclosure case where the United States held a junior lien and was wiped out by the foreclosure sale of the first mortgage.
Now, the appeal presents for the first time, the interpretation to be accorded 28 U.S.C. 2410 (c), and whether it's explicit ground of this redemption right was intended to apply when in conflict with state law and if so, is the directive of the federal statute balanced?
Now these questions were not determined in your recent decision in the Brosnan case.
There, you dealt with the scope of 2410 and drastically limited its application.
Here we deal with the interpretation of the statute where it was expressly invoked to subject the United States to process in a state court.
I'd like to call your attention to the language of the statute before dealing with the facts.
It's found in our main brief at page 33.
And just to remind you of the terms of the statute, in paragraph (a) it waives the sovereign immunity of the United States and provides that under the conditions defined in the statute, the United States maybe made a party in a suit to acquire a title or to foreclose a mortgage upon property in which the Government claims an interest.
And (b) paragraph defines how that service will be effective, machinery.
And the (c) paragraph with which we deal here, says that the judicial sale of the property will have the same effect as to discharging the Government's lien as state law might provide.
And then it contains this sentence on page 34, where a sale of real estate is made to satisfy a lien prior to that of the United States.
The United States shall have one year from the date of sale within which to redeem.
Now, you'll notice there is only one condition prescribed for the application of that clear and unequivocal directive.
And that is where that the sale is made to satisfy a lien prior to that of the United States.
Now, the facts in this case where these.
The Farmers' Home Administration, an agency of the Department of Agriculture, under a loan program for the benefit of livestock farmers who could not obtain loans elsewhere, may -- four loans to a farmer in Kansas.
Now, three of the loans were unsecured, one of the four notes involved was secured by a second lien subject to a $25,000 mortgage on the farm held by the John Hancock Insurance Company.
Now, I'd like to point out this, that there are 10 federal agencies making loans to assist farmers and -- and business.
They are all serving a public purpose.
They're not private loans for profit.
In other words, we -- this -- this little agency alone and the Department of Agriculture has made loans totaling 81 million as I am told.
But the loans, the Commodity Credit Corporation, the ICC, the RFC, Maritime Administrators, small business administration, about five others, totaling a billion and they all have authority to loan on second liens.
So the question here is one of considerable significance to the United States.
Now, the first lien money lender instituted a foreclosure proceeding on its defaulted first mortgage.
And unlike the situation in Brosnan, Kansas law required the junior leinors be made parties to the proceeding of the insurance company made service a process upon the United States under 2410, which was the only way to do so.
And it's conceded by the appellees in their brief at page 5 that 2410 was invoked.
John M. Harlan II:
Could there have been a valid foreclosure under Kansas law without making the United States a party, a valid foreclosure against (Inaudible)