U.S v. Helz 314 F.2d 301

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Westlaw Delivery Summary Report for PATRON ACCESS,Date/Time of Request: Client Identifier: Database: Citation Text: Lines: Documents: Images: Monday, November 28, 2011 10:09 Eastern PATRON ACCESS FEDFIND 314 F.2d 301 143 1 0 Civil. FHA mortgage. U.S. v. Helz 314 F.2d 301 C.A.Mich. 1963. The material accompanying this summary is subject to copyright. Usage is governed by contract with Thomson Reuters, West and their affiliates. Page 1 314 F.2d 301 (Cite as: 314 F.2d 301) United States Court o
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  Westlaw Delivery Summary Report for PATRON ACCESS,- Date/Time of Request: Monday, November 28, 2011 10:09 EasternClient Identifier: PATRON ACCESSDatabase: FEDFINDCitation Text: 314 F.2d 301Lines: 143Documents: 1Images: 0 Civil. FHA mortgage. U.S. v. Helz 314 F.2d 301 C.A.Mich. 1963. The material accompanying this summary is subject to copyright. Usage is governed by contract with Thomson Reuters,West and their affiliates.  United States Court of Appeals Sixth Circuit.UNITED STATES of America, Plaintiff-Appellant,v.Mary HELZ, Defendant-Appellee.No. 14771.March 7, 1963.Action by United States against wife for bal-ance due on FHA notes executed by husband andwife for improvements on Michigan home ownedby them as tenants by the entireties. The husbandhad been discharged in bankruptcy. The UnitedStates District Court for the Eastern District of Michigan, Southern Division, Frank A. Picard, J.,rendered judgment dismissing the complaint. TheUnited States appealed. The Court of Appeals,Darr, Senior District Judge, held that under federallaw the wife could not assert defense of covertureand the United States was entitled to personal judg-ment against the wife.Reversed with directions.West Headnotes [1]Federal Courts 170B 372 170BFederal Courts170BVIState Laws as Rules of Decision170BVI(A)In General 170Bk372k. Diversity of Citizenship Jur-isdiction.Most Cited Cases(Formerly 106k359)In diversity cases, law of state governs remed-ies. [2]Federal Courts 170B 387 170BFederal Courts170BVIState Laws as Rules of Decision170BVI(B)Decisions of State Courts as Au- thority170Bk387k. Federal Constitution andLaws.Most Cited Cases(Formerly 106k361)In cases arising under federal statutes, remediesare governed by directive of statutes or, if no dir-ective, then by rules fashioned by federal courts; arule set up by decision of federal court may adoptstate law or may fashion governing rule of law ac-cording to its own standards. [3]Federal Courts 170B 410 170BFederal Courts170BVIState Laws as Rules of Decision170BVI(C)Application to Particular Matters 170Bk409Conflict of Laws170Bk410k . ParticularQuestions. Most Cited Cases(Formerly 106k361)In cases affecting government and credit of government, federal law should apply; this is truein cases arising under National Housing Act. Na-tional Housing Act, § 2 as amended12 U.S.C.A. §1703. [4]Federal Courts 170B 407.1 170BFederal Courts170BVIState Laws as Rules of Decision170BVI(C)Application to Particular Matters 170Bk407Bills, Notes, and Bonds; Mort-gages, Pledges and Liens170Bk407.1k. In General.Most Cited Cases(Formerly 170Bk407, 170k407, 106k361)Federal law and not local law of Michigan wasapplied when United States sued wife for balancedue on FHA notes executed by wife and husbandfor improvements on home owned by them as ten-ants by entireties. National Housing Act, § 2 asamended12 U.S.C.A. § 1703. [5]Bankruptcy 51 3412 51BankruptcyPage 1314 F.2d 301 (Cite as: 314 F.2d 301) © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.  51XDischarge51X(D)Effectof Discharge 51k3412k. Effect as to Co-Debtors, Guar-antors, and Sureties.Most Cited Cases(Formerly 51k428) Husband and Wife 205 85(3) 205Husband and Wife205IVDisabilities and Privileges of Coverture205IV(C)Contracts 205k85Bills and Notes205k85(3)k . Joinder of Husband. Most Cited CasesUnder federal law, wife sued by United Statesfor balance due on FHA notes executed by husbandand wife for improvements on Michigan homeowned by them as tenants by entireties could notassert defense of coverture, and United States wasentitled to personal judgment against wife eventhough her husband had been discharged in bank-ruptcy. National Housing Act, § 2 as amended12U.S.C.A. § 1703. *302 Sherman Cohn, Dept. of Justice, Washington,D.C. (William H. Orrick, Jr., Asst. Atty. Gen., Mor-ton Hollander, Sherman L. Cohn, Attys., Dept. of Justice, Washington, D.C., Lawrence Gubow, U.S.Atty., Detroit, Mich., on brief), for appellant.Eliot Charlip, Detroit, Mich., for appellee.Before MILLER, Circuit Judge, BOYD, DistrictJudge, and DARR, Senior District Judge.DARR, Senior District Judge.The defendant-appellee, Mary Helz, and herhusband executed two notes to a banking institutionfor the purpose of securing money to improve theirhome, owned by them as tenants by the entirety.Prior to the making of the loans appellee and herhusband executed credit applications on FederalHousing Administration forms, each of whichstated that ‘this application is submitted to obtaincredit under the terms of Title I of the NationalHousing Act.’ 48 Stat. 1246, as amended,12 U.S.C.§ 1703.The notes were unsecured, the payment beinginsured by the terms of Title I of the NationalHousing Act. These notes were defaulted and thebank assigned them to the United States on behalf of the Federal Housing Administration (FHA) in re-turn for payment by the FHA of the amounts dueunder Title I of the insurance program.Appellee's husband was discharged in bank-ruptcy on December 6, 1960.On February 15, 1961, the United States, onbehalf of FHA, instituted the present action againstappellee, individually, to recover the amounts stillowing on the promissory notes, plus interest.Appellee, admitting the execution of the notesand that they were given ‘for the purpose of obtain-ing an unsecured FHA home improvement loan,’moved to dismiss the complaint on the authority of Fetter v. United States, 269 F.2d 467 (C.A.6). TheDistrict Court dismissed the complaint withoutopinion. The United States appealed from the judg-ment.The Government concedes that under Michiganlaw, which was involved in the Fetter case, no judg-ment on the notes could be entered against appellee,a married woman. The Fetter case settles this caseshould it be that Michigan law applies, but the Gov-ernment presents in this case a question that wasnot raised or decided in the Fetter case.The basic contention of the Government is thatthe relief sought should be governed by federal lawand that the federal law should be determined bythe Court, under the circumstances here presented,as requiring a judgment to be entered against ap-pellee.[1][2]Indiversity cases, since *303 Erie R. Co.v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.1188,the law of the state governs the remedies. Incases arising under federal statutes, remedies aregoverned by the directive of the statutes or, if noPage 2314 F.2d 301 (Cite as: 314 F.2d 301) © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.  directive, then by rules fashioned by the federalcourts. A rule set up by a decision of the federalcourt may adopt the state law or may fashion thegoverning rule of law according to its own stand-ards.[3]In cases affecting government money andthe credit of the government, the authorities set upthe principle that federal law should apply. Thisprinciple is true in cases arising under the NationalHousing Act. As an example, the Court said in thecase of United States v. View Crest Garden Apts.,Inc., 268 F.2d 380 (C.A.9)1959, cert. denied361 U.S. 884, 80 S.Ct. 156, 4 L.Ed.2d 120:‘Now the federal policy to protect the treasuryand to promote the security of federal investmentwhich in turn promotes the prime purpose of theAct- to facilitate the building of homes by the useof federal credit- becomes predominant. Local ruleslimiting the effectiveness of the remedies availableto the United States for breach of a federal duty cannot be adopted.'See also:Board of Commissioners of JacksonCounty v. United States, 308 U.S. 343, 60S.Ct.285, 84 L.Ed. 313;Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838;United States v. Allegheny County, 322 U.S. 174,64 S.Ct. 908, 88 L.Ed. 1209;United Statesv. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604,91L.Ed. 2067;United States v. 93.970 Acres of Land, 360 U.S. 328, 79 S.Ct. 1193, 3 L.Ed.2d 1275;cf.Bank of America Nat. Trust & Sav. Ass'n v. Par-nell, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93.[4][5]We reach the conclusion that federal lawshould apply in the case, not the local law of Michigan, and that in fashioning such federal lawwe rule that the old common law defense of cover-ture to an action on a note executed by a marriedwoman under the National Housing Act, is not avalid defense. Under such federal law the Govern-ment is entitled to a personal judgment against ap-pellee, in accord with the prayer of the complaintunless appellee makes other defense.This ruling is not to be construed as in any waypassing upon the question whether real estate inMichigan owned by the appellee and her husbandas tenants by the entirety is subject to execution un-der a judgment obtained in this action or is exemptfrom such execution by reason of the Michigan lawapplicable thereto. We are not concerned at thistime as to how or in what manner the Governmentcan satisfy its judgment, should it obtainone.Propst v. Fisher, Administrator, C.A. 6, 313 F.2d248.The judgment of the District Court is reversedwith directions that further procedure will be in ac-cord with this opinion.C.A.Mich. 1963.U.S. v. Helz314 F.2d 301END OF DOCUMENTPage 3314 F.2d 301 (Cite as: 314 F.2d 301) © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
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