§761.9 Interest rates for direct loans.
§761.10 Planning and performing construction and other development.
§761.51 Establishing a supervised bank account.
§761.52 Deposits into a supervised bank account.
§761.54 Withdrawals from a supervised bank account.
§761.55 Closing a supervised bank account.
§761.102 Borrower recordkeeping, reporting, and supervision.
§761.104 Developing the farm operating plan.
§761.203 National reserves for Farm Ownership and Operating loans.
§761.204 Methods of allocating funds to State Offices.
§761.205 Computing the formula allocation.
§761.206 Pooling of unobligated funds allocated to State Offices.
§761.207 Distribution of loan funds by State Offices.
§761.208 Target participation rates for socially disadvantaged groups.
§761.209 Loan funds for beginning farmers.
Source: 72 FR 63285, Nov. 8, 2007, unless otherwise noted.
(a) The Administrator delegates the responsibility to administer Farm Loan Programs of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) to the Deputy Administrator for Farm Loan Programs subject to any limitations established in 7 CFR 2.16(a)(2) and 7 CFR 2.42.
(1) Delegates to each State Executive Director within the State Executive Director's jurisdiction the authority, and in the absence of the State Executive Director, the person acting in that position, to act for, on behalf of, and in the name of the United States of America or the Farm Service Agency to do and perform acts necessary in connection with making and guaranteeing loans, such as, but not limited to, making advances, servicing loans and other indebtedness, and obtaining, servicing, and enforcing or releasing security and other instruments related to the loan. For actions that do not result in a loss to the Farm Service Agency, a State Executive Director may redelegate authorities received under this paragraph to a Farm Loan Chief, Farm Loan Specialist, District Director, Farm Loan Manager, or Senior Farm Loan Officer, Farm Loan Officer, Loan Analyst, Loan Resolution Specialist, or Program Technician.
(2) May establish procedures for further redelegation or limitation of authority.
(c) Parts 761 through 767 describe the Agency's policies for its Farm Loan Programs. The objective of these programs is to provide supervised credit and management assistance to eligible farmers to become owners or operators, or both, of family farms, to continue such operations when credit is not available elsewhere, or to return to normal farming operations after sustaining substantial losses as a result of a designated or declared disaster. The programs are designed to allow those who participate to transition to private commercial credit or other sources of credit in the shortest period of time practicable through the use of supervised credit, including farm assessments, borrower training, market placement, and borrower graduation requirements. These regulations apply to loan applicants, borrowers, lenders, holders, Agency personnel, and other parties involved in making, guaranteeing, holding, servicing, or liquidating such loans.
(d) This part describes the Agency's general and administrative policies for its guaranteed and direct Farm Loan Programs. In general, this part addresses issues that affect both guaranteed and direct loan programs.
FSA Farm Service Agency, an Agency of the USDA, including its personnel and any successor Agency.
SW Soil and Water loan.
Act is the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.).
Conservation Contract review team is comprised by the appropriate offices of FSA, the Natural Resources Conservation Service, U.S. Fish and Wildlife Service, State Fish and Wildlife Agencies, Conservation Districts, National Park Service, Forest Service, State Historic Preservation Officer, State Conservation Agencies, State Environmental Protection Agency, State Natural Resource Agencies, adjacent public landowner, and any other entity that may have an interest and qualifies to be a management authority for a proposed conservation contract.
Forest Stewardship Management Plan means a property-specific, long-term, multi-resource plan that addresses private landowner objectives while recommending a set and schedule of management practices designed to achieve a desired future forest condition developed and approved through the USDA Forest Service or its agent.
Presidentially-designated emergency is a major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
U. S. Attorney is an attorney for the United States Department of Justice.
Part 15d of this title contains applicable regulations pertaining to civil rights and filing of discrimination complaints by program participants.
The Agency enforces conflict of interest policies to maintain high standards of honesty, integrity, and impartiality in the making and servicing of direct and guaranteed loans. These requirements are established in 5 CFR parts 2635 and 8301.
A person who applies for or receives a loan made or guaranteed by the Agency must comply with the restrictions on lobbying in 2 CFR part 418.
Except as provided in 7 CFR part 762, appeal of an adverse decision made by the Agency will be handled in accordance with 7 CFR parts 11 and 780.
(2) Appraisal reviews conducted on appraisals made in connection with the making and servicing of direct and guaranteed FLP and Non-program loans.
(b) Appraisal standards. (1) Real estate appraisals, technical appraisal reviews and their respective forms must comply with the standards contained in USPAP, as well as applicable Agency regulations and procedures for the specific FLP activity involved. Applicable appraisal procedures and regulations are available for review in each Agency State Office.
(2) When a chattel appraisal is required, it must be completed on an applicable Agency form (available in each Agency State Office) or other format containing the same information.
(2) The appraisal was not completed in the previous 12 months, but has been updated by the appraiser or appraisal firm that completed the appraisal, and both the update and the original appraisal were completed in accordance with USPAP.
(d) Appraisal reviews. (1) With respect to a real estate appraisal, the Agency may conduct a technical appraisal review or an administrative appraisal review, or both.
(2) With respect to a chattel appraisal, the Agency may conduct an administrative appraisal review.
(1) When an applicant or borrower challenges a real estate appraisal used by the Agency for any loan making or loan servicing decision, except primary loan servicing decisions as specified in §766.115 of this chapter, the issue for review is limited to whether the appraisal used by the Agency complies with USPAP. The applicant or borrower must submit a technical appraisal review prepared by a State Certified General Appraiser that will be used to determine whether the Agency's appraisal complies with USPAP. The applicant or borrower is responsible for obtaining and paying for the technical appraisal review.
(2) When an applicant or borrower challenges a chattel appraisal used by the Agency for any loan making or loan servicing decision, except for primary loan servicing decisions as specified in §766.115 of this chapter, the issue for review is limited to whether the appraisal used by the Agency is consistent with present market values of similar items in the area. The applicant or borrower must submit an independent appraisal review that will be used to determine whether the appraisal is consistent with present market values of similar items in the area. The applicant or borrower is responsible for obtaining and paying for the independent appraisal.
(a) Dollar limits. The outstanding principal balances for an applicant or anyone who will sign the promissory note cannot exceed any of the following at the time of loan closing or assumption of indebtedness. If the outstanding principal balance exceeds any of the limits at the time of approval, the farm operating plan must reflect that funds will be available to reduce the indebtedness prior to loan closing or assumption of indebtedness.
(6) Any combination of direct Farm Ownership loan, direct Conservation loan, direct Soil and Water loan, direct Operating loan, guaranteed Farm Ownership, guaranteed Conservation loan, guaranteed Soil and Water loan, guaranteed Operating loan, and Emergency loan-the amount in paragraph (a)(1)(ii) of this section plus $800,000.
(b) Guaranteed loan limit. The dollar limits of guaranteed loans will be increased each fiscal year based on the percentage change in the Prices Paid by Farmers Index as compiled by the National Agricultural Statistics Service, USDA. The maximum loan limits for the current fiscal year are available in any FSA office and on the FSA website at http://www.fsa.usda.gov.
(c) Line of credit advances. The total dollar amount of guaranteed line of credit advances and income releases cannot exceed the total estimated expenses, less interest expense, as indicated on the borrower's cash flow budget, unless the cash flow budget is revised and continues to reflect a feasible plan.
Interest rates for all direct loans are set in accordance with the Act. A copy of the current interest rates may be obtained in any Agency office.
(2) Insurance or other proceeds resulting from damage or loss to direct loan security.
(3) Must not incur any debts for materials or labor or make any expenditures for development purposes prior to loan closing with the expectation of being reimbursed from Agency loan funds.
(5) Is responsible for obtaining any required technical services from qualified technicians, tradespeople, and contractors.
(d) Construction and repair standards. (1) The construction of a new building and the alteration or repair of an existing building must conform with industry-acceptable construction practices and standards.
(2) All improvements to a property must conform to applicable laws, ordinances, codes, and regulations.
(3) The applicant or borrower is responsible for selecting a design standard that meets all applicable local and state laws, ordinances, codes, and regulations, including building, plumbing, mechanical, electrical, water, and waste management.
(4) The Agency will require drawings, specifications, and estimates to fully describe the work as necessary to protect the Agency's financial interests. The drawings and specifications must identify any specific development standards being used. Such information must be sufficiently complete to avoid any misunderstanding as to the extent, kind, and quality of work to be performed.
(5) The Agency will require technical data, tests, or engineering evaluations to support the design of the development as necessary to protect its financial interests.
(6) The Agency will require the applicant or borrower to provide written certification that final drawings and specifications conform with the applicable development standard as necessary to protect its financial interests. Certification must be obtained from individuals or organizations trained and experienced in the compliance, interpretation, or enforcement of the applicable development standards, such as licensed architects, professional engineers, persons certified by a relevant national model code organization, authorized local building officials, or national code organizations.
(e) Inspection. (1) The applicant or borrower is responsible for inspecting development work as necessary to protect their interest.
(2) The applicant or borrower must provide the Agency written certification that the development conforms to the plans and good construction practices, and complies with applicable laws, ordinances, codes, and regulations.
(3) The Agency will require the applicant or borrower to obtain professional inspection services during construction as necessary to protect its financial interests.
(4) Agency inspections do not create or imply any duty or obligation of the Agency to the applicant or borrower.
(f) Warranty and lien waivers. The applicant or borrower must obtain and submit all lien waivers on any construction before the Agency will issue final payment.
(g) Surety. The Agency will require surety to guarantee both payment and performance for construction contracts as necessary to protect its financial interests.
(8) The modification is certified in accordance with paragraph (d) (6) of this section.
(iii) The borrower agrees to the use of a supervised bank account for this purpose by executing the deposit agreement.
(b) The borrower may select the financial institution in which the account will be established, provided the institution is Federally insured. If the borrower does not select an institution, the Agency will choose one.
(c) Only one supervised bank account will be established for any borrower.
(d) If both spouses sign an FLP note and security agreement, the supervised bank account will be established as a joint tenancy account with right of survivorship from which either borrower can withdraw funds.
(e) If the funds to be deposited into the account cause the balance to exceed the maximum amount insurable by the Federal Government, the financial institution must agree to pledge acceptable collateral with the Federal Reserve Bank for the excess over the insured amount, before the deposit is made.
(1) If the financial institution is not a member of the Federal Reserve System, the institution must pledge acceptable collateral with a correspondent bank that is a member of the Federal Reserve System. The correspondent bank must inform the Federal Reserve Bank that it is holding securities pledged for the supervised bank account in accordance with 31 CFR part 202 (Treasury Circular 176).
(2) When the balance in the account has been reduced, the financial institution may request a release of part or all of the collateral, as applicable, from the Agency.
(2) To the Treasury of the United States as a joint payee.
(b) Loan proceeds may be deposited electronically.
(a) A supervised bank account, if possible, will be established as an interest bearing deposit account provided that the funds will not be immediately disbursed, and the account is held jointly by the borrower and the Agency if this arrangement will benefit the borrower.
(b) Interest earned on a supervised bank account will be treated as normal income security.
(4) The use of funds is consistent with the current farm operating plan or other agreement with the Agency.
(5) In the case of a deceased borrower, to continue to pay necessary farm expenses to protect Agency security in conjunction with the borrower's estate.
(4) Basic security funds, the Agency will apply the balance to the FLP loan as an extra payment or the borrower may apply the balance toward the purchase of basic security, provided the Agency obtains a lien on such security and its security position is not diminished.
(b) If the borrower is uncooperative in closing a supervised bank account, the Agency will make written demand to the financial institution for the balance and apply it in accordance with paragraph (a) of this section.
(4) Continue to pay expenses from the supervised bank account in conjunction with the borrower's estate.
This subpart applies to all direct applicants and borrowers, except borrowers with only Non-program loans.
(3) Immediately notify the Agency of any proposed or actual significant change in the farming operation, any significant changes in family income, expenses, or the development of problem situations, or any losses or proposed significant changes in security.
(c) If the borrower fails to comply with these requirements, unless due to reasons outside the borrower's control, the non-compliance may adversely impact future requests for assistance.
(3) Develop a plan of supervision to assist the borrower in achieving financial viability and transitioning to private commercial credit or other sources of credit in the shortest time practicable, except for CL.
(10) Graduation plan, except for CL.
(d) An assessment update must be prepared for each subsequent loan. The update must include a farm operating plan and any other items discussed in paragraph (b) of this section that have significantly changed since the initial assessment.
(e) The Agency reviews the assessment to determine a borrower's progress at least annually. The review will be in the form of an office visit, field visit, letter, phone conversation, or year-end analysis, as determined by the Agency. For streamlined CLs, the borrower must provide a current balance sheet and income tax records. Any negative trends noted between the previous years' and the current years' information must be evaluated and addressed in the assessment of the streamlined CL borrower.
(f) If a CL borrower becomes financially distressed, delinquent, or receives any servicing options available under part 766 of this chapter, all elements of the assessment in paragraph (b) of this section must be addressed.
(a) An applicant or borrower must submit a farm operating plan to the Agency, upon request, for loan making or servicing purposes.
(b) An applicant or borrower may request Agency assistance in developing the farm operating plan.
(c) The farm operating plan will be based on accurate and verifiable information.
(1) Historical information will be used as a guide.
(2) Positive and negative trends, mutually agreed upon changes and improvements, and current input prices will be taken into consideration when arriving at reasonable projections.
(ii) Exclude the production year with the lowest actual or county average yield if their yields were affected by disasters during at least 2 of the 3 years.
(d) Unit prices for agricultural commodities established by the Agency will generally be used. Applicants and borrowers that provide evidence that they will receive a premium price for a commodity may use a price above the price established by the Agency.
(e) For MLs, when projected yields and unit prices cannot be determined as specified in paragraphs (c) and (d) of this section because the data is not available or practicable, other documentation from other reliable sources may be used to assist in developing the applicant's farm operating plan.
(f) Except as provided in paragraph (g) of this section, the applicant or borrower must sign the final farm operating plan prior to approval of any loan or servicing action.
(g) If the Agency believes the applicant or borrower's farm operating plan is inaccurate, or the information upon which it is based cannot be verified, the Agency will discuss and try to resolve the concerns with the applicant or borrower. If an agreement cannot be reached, the Agency will make loan approval and servicing determinations based on the Agency's revised farm operating plan.
(4) Is receiving a limited resource interest rate on any loan.
(2) An updated farm operating plan.
(3) The reservation of loan funds for beginning farmers.
(b) The Agency does not allocate EM loan funds to State Offices but makes funds available following a designated or declared disaster. EM loan funds are available on a first-come first-served basis.
(c) State funding information is available for review in any State Office.
The Agency's National Office allocates funds for FO, CL, and OL loans to the State Offices on a fiscal year basis, as made available by the Office of Management and Budget. However, the National Office will retain control over the funds when funding or administrative constraints make allocation to State Offices impractical.
(a) Reservation of funds. At the start of each fiscal year, the National Office reserves a portion of the funds available for each direct and guaranteed loan program. These reserves enable the Agency to meet unexpected or justifiable program needs during the fiscal year.
(b) Allocation of reserved funds. The National Office distributes funds from the reserve to one or more State Offices to meet a program need or Agency objective.
(a) Formula allocation, if data, as specified in §761.205, is available to use the formula for the State.
(b) Administrative allocation, if the Agency cannot adequately meet program objectives with a formula allocation. The National Office determines the amount of an administrative allocation on a case-by-case basis.
(c) Base allocation, to ensure funding for at least one loan in each State, District, or County Office. In making a base allocation, the National Office may use criteria other than those used in the formula allocation, such as historical Agency funding information.
(2) The State Factor, which represents the percentage of the total amount of the funds for a loan program that the National Office allocates to a State Office.
(4) Sums the weighted criteria for each State to obtain the State factor.
The Agency periodically pools unobligated FO, CL, and OL loan funds that have been allocated to State Offices. When pooling these funds, the Agency places all unobligated funds in the appropriate National Office reserve. The pooled funds may be retained in the national reserve or reallocated to the States.
A State Office may distribute its allocation of loan funds to District or County level using the same allocation methods that are available to the National Office. State Offices may reserve a portion of the funds to meet unexpected or justifiable program needs during the fiscal year.
(a) General. (1) The Agency establishes target participation rates for providing FO, CL, and OL loans to members of socially disadvantaged groups.
(2) The Agency sets the target participation rates for State and County levels annually.
(3) When distributing loan funds in counties within Indian reservations, the Agency will allocate the funds on a reservation-wide basis.
(4) The Agency reserves and allocates sufficient loan funds to achieve these target participation rates. The Agency may also use funds that are not reserved and allocated for socially disadvantaged groups to make or guarantee loans to members of socially disadvantaged groups.
(1) State is equal to the percent of the total rural population in the State who are members of such socially disadvantaged groups.
(2) County is equal to the percent of rural population in the county who are members of such socially disadvantaged groups.
(1) State is equal to the percent of the total number of farmers in the State who are members of such socially disadvantaged groups.
(2) County is equal to the percent of the total number of farmers in the county who are members of socially disadvantaged ethnic groups.
(i) State is equal to the percent of farmers in the State who are women.
(ii) County is equal to the percent of farmers in the county who are women.
(2) In developing target participation rates for women, the Agency will consider the number of women who are current farmers and potential farmers.
Each fiscal year, the Agency reserves a portion of direct and guaranteed FO and OL loan funds for beginning farmers in accordance with section 346(b)(2) of the Act.
(iii) A grant awarded by the Sustainable Agriculture Research and Education (SARE) program of the National Institute of Food and Agriculture, USDA.
(3) An applicant who will use the loan funds to build conservation structures or establish conservation practices to comply with 16 U.S.C. 3812 (section 1212 of the Food Security Act of 1985) for highly erodible land.
(b) September 1 of each fiscal year the Agency will use available unsubsidized guaranteed OL loan funds to make approved direct FO loans to beginning farmers.


"the judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of a foreign state."
Whether a particular suit is one against the state within the meaning of the Constitution depends upon the same principles that determine whether a particular suit is one against the United States.
United States v. Lee, 106 U. S. 196, and other cases examined and held to decide that a suit against individuals to recover the possession of real property is not a suit against the state simply because the defendant holding possession happens to be an officer of the state and asserts that he is lawfully in possession on its behalf. The Eleventh Amendment gives no immunity to officers or agents of a state in withholding the property of a citizen without authority of law, and when such officers or agents assert that they are in rightful possession, they must make that assertion good, upon its appearing, in a suit against them as individuals, that the legal title and right of possession is in the plaintiff.
The judgment in this case does not conclude the state unless it becomes a party to the suit. Not having submitted its rights to the determination of the court, it will be open to the state to bring any action that will be appropriate to establish and protect whatever claim it has to the premises in dispute.
Wesley, a citizen of New York, brought this action in the circuit court of the United States against Tindal and Boyles, citizens of South Carolina, to recover the possession of certain real property in the City of Columbia, South Carolina, with damages for withholding such possession, as well as the value of the use and occupation of the premises.
The complaint alleged that on the 16th day of February, 1892, the plaintiff purchased from the commissioners of the sinking fund of South Carolina two certain parcels of land in the City of Columbia, in that state, on one of which is a building known as "Agricultural Hall," the lots being the same conveyed to the state by deed of J. B. Johnston, dated April 9, 1883, and duly recorded.
"in trust for the use of the plaintiff, his heirs and assigns, forever, and to permit the plaintiff to have and possess the same, and to enjoy the profits, and in trust to convey the same to the plaintiff, his heirs and assigns, or such person as he might direct and appoint."
That, upon the request of the plaintiff, J. W. Alexander, by deed dated the 11th day of February, 1893, conveyed the premises in fee simple to the plaintiff.
"being so possessed thereof, the defendants, on the 20th day of February, 1892, wrongfully entered into said premises and ousted the plaintiff, and that the defendants are, and ever since the said 20th day of February, 1892, have been, in possession of said premises, and have been and still are withholding the same from the plaintiff, although plaintiff has demanded from the defendants the possession thereof, to the damage of the plaintiff ten thousand dollars,"
and hat the value of the use and occupation of the premises was at least twenty-five hundred dollars per annum.
The plaintiff demanded judgment against the defendants for the possession of the premises, for ten thousand dollars as damages for withholding the same, for the value of the use and occupation of the premises after February 20, 1892 at the rate of twenty-five hundred dollars per annum, and for the costs and disbursements of the action.
"has no right, title, interest, or estate to or in the said premises, of any kind whatever, but that, in pursuance of law, the same is in the custody of this defendant as said Secretary of State."
"no right, title, interest, or estate of any kind to or in the said premises, but that, by the employment of the said J. E. Tindal as Secretary of State, this defendant has been and now is engaged, on behalf of the said state, in watching, guarding, and taking care of the said premises."
was entered in his favor. This was followed by an execution commanding the United States marshal or his deputies to deliver possession of the property to the plaintiff.
That judgment was affirmed by the circuit court of appeals. Tindal v. Wesley, 65 F. 731. The case is in this Court upon writ of certiorari directed to that court.
"Q. You and Mr. Muller went out of the state treasurer's office, and almost immediately returned. Now what occurred between the state treasurer, on the one hand, and Mr. Muller and yourself on the other?"
"A. We returned within five minutes -- I think, within two minutes. We called the state treasurer's attention to the fact that the bond which had been delivered by us for Alexander contained a clause which authorized him to anticipate of it at any time, and we told him, on behalf of Mr. Alexander, we desired to pay that bond and mortgage immediately. We then drew out the revenue bond scrip known as the 'Blue Ridge Railroad Scrip,' which we counted out to the amount of a few cents or dollars in excess of the amount due on the bond and mortgage from its date up to the date of this transaction, and we told Dr. Bates we tendered him that in payment of the bond and mortgage. We demanded no receipt; we demanded nothing."
"Q. And it was refused?"
"A. Yes, the advertisement was not referred to."
"Q. Was it not the purpose of the transaction to create an issue in the United States court, in order to test the validity of the revenue bond scrip -- was not that the object of the purchase?"
"A. The object of the purchase from the beginning was to create an issue as to the validity of the revenue bond scrip, but, as to the United States circuit court, we were not --"
"Q. Then, when you bought it, you did not intend to pay for it in good money?"
"A. We did, and considered the scrip as good money."
"Q. When you made the purchase, you made it with a view of compelling the state to take the deferred payment of it in revenue bond scrip?"
"Q. Did you happen to know whether the revenue bond scrip had any value in the market?"
"A. I don't know that it has."
"Q. Very little, if any?"
"A. Yes. I have never seen him personally."
"Q. Do you know him as a poor man?"
"Q. He and Mr. Wesley had no use for this property, that you know of, except to create the issue to which you have referred?"
"A. That was the sole object for which it was purchased. Mr. Wesley regarded the property as worth the money, and, even if he had to pay, he would not lose the money."
"Q. Mr. Wesley holds a large block of revenue bond scrip?"
The court excluded this testimony, and the defendants duly excepted to its ruling. That ruling is the subject of one of the assignments of error.
title without any reservation by the grantors of the right to retain possession until the whole purchase price was paid.
Throughout the argument of counsel for defendants, it is assumed that the purpose on the part of both Alexander and Wesley to tender revenue bond scrip in payment of the deferred installments was in itself a fraud that entitled the commissioners of the sinking fund to withhold possession after conveying the legal title. We cannot concur in this view. If, under the law of the state, the scrip referred to could be used in meeting any obligations due to it, how could it be regarded as a fraud to do what the law allowed to be done? Nor was it in any legal sense a fraud for Alexander or Wesley to form the purpose of tendering such scrip in payment in order that there might be a judicial determination of the question of its validity. If the deed had been obtained under assurances that the deferred installments of purchase price should be paid in money, and not in revenue bond scrip, it may be that the commissioners, in a proper proceeding, could have obtained a rescission of the contract. But upon that point it is unnecessary to express an opinion, as no such case is presented by the record. The case here is one in which the excluded testimony does not tend to show anything more than that Alexander, and, perhaps Wesley, did not, during the negotiations for the property or before the deed was obtained, disclose to the commissioners their purpose to use revenue bond scrip, if it could be done, in paying the deferred installments of purchase money.
The plaintiff insists that the question of fraud or no fraud in the alleged purchase from the commissioners of the sinking fund is not a question in which the defendants have any concern, and could only be raised by the state in a proceeding to which it was a party. We need not stop to consider this question, because we are of opinion that in no view of the case arising upon this record was error committed in excluding so much of the testimony of Lyles as is set forth in the bill of exceptions.
Eleventh Amendment. The circuit court held that the suit was not one against the state, and that view was approved by the circuit court of appeals.
It is not claimed, nor could it be claimed, that the commissioners of the sinking fund were without authority to sell the lands in controversy. By an Act of the general assembly of the state approved December 24, 1890, the commissioners were authorized to sell and convey all the right, title, and interest of the state (the same being a title in fee simple) in the building in the City of Columbia, with the lot on which it stands, known as "Agricultural Hall," and by the General Statutes of South Carolina it was made their duty to sell and convey, for and in behalf of the state, all such real and personal property of the state as was not in actual public use, the sales to be made from time to time, in such manner and upon such terms as they may deem most advantageous to the state. Acts of S.C. 1890, p. 707; Gen.Stat.S.C. 1882, 28, c. 5, § 63; 1 Rev.Stat.S.C. p. 35, § 85. It is true that by an Act approved December 24, 1892, the above Act of December 24, 1890, was repealed so far as it authorized and provided for the sale of the lot and building known as "Agricultural Hall," and the appropriation of the proceeds to Clemson College, and it was provided that if that property had not then been sold and conveyed, it should remain unsold, and, if sold, that the proceeds of sale should be covered into the treasury for the benefit of the state. Acts S.C. 1892, p. 88. But, as already stated, the sale and conveyance by the commissioners occurred before the passage of the repealing act, and were therefore not affected by it.
is made a part of the record by a bill of exceptions, except the above questions and answers in the testimony of Lyles. It must therefore be assumed from the record that the plaintiff, prior to the bringing of this action, had acquired from the commissioners the legal title to the premises in dispute, and was entitled to possession. The bill of exceptions presents no question as to the genuineness or the execution and delivery of the deed to Alexander conveying the premises in trust for Wesley, and in support of the verdict it must be taken that the conveyance referred to in the complaint as having been made by the commissioners of the sinking fund to Alexander was in fact properly executed and delivered to the grantee, and that, as alleged in the complaint, Alexander conveyed to Wesley in 1893.
But it appears from the statutes of South Carolina that the Secretary of State has charge of all the property of the state the care and custody of which is not otherwise provided for by law. Gen.Stat.S.C. 1882, p. 27, c. 5, § 60; 1 Rev.Stat.S.C. p. 34, § 82. He admits in his answer that the property in controversy is in his custody. Boyles, under the employment of the Secretary of State, watches, guards, and takes care of it. They are therefore in possession, within the meaning of the general rule that ejectment will not lie against a person out of possession. Tyler on Ejectment 411; Pope v. Pendergrast, 1 A. K. Marsh. 122. The defendants are the actual occupants of the premises. The contention, therefore, of the plaintiffs in error is that the circuit court erred in not holding, as it was asked to do, that, they having no personal interest in the property and being only custodians of it on behalf of the state, a suit to dispossess them and to give possession to the plaintiff was, in effect, a suit against the state.
"without submitting the rights of the state to the jurisdiction of the court, but respectfully insisting that the court has no jurisdiction of the subject in controversy,"
"The state does not complain that it was refused leave to intervene, but that the circuit court, without the intervention of the state, refused merely upon suggestion to dismiss the complaint against the defendants who were sued as individuals. The state was not a party to the record in the circuit court, and did not become a party by intervention, pro interesse suo or otherwise, but expressly refused to submit its rights to the jurisdiction of the court. This being so, the motion to dismiss may well be sustained on that ground. United States v. Lee, 106 U. S. 196, 106 U. S. 197; Georgia v. Jesup, 106 U. S. 458."
So that the question is directly presented whether an action brought against individuals to recover the possession of land of which they have actual possession and control is to be deemed an action against the state within the meaning of the Constitution, simply because those individuals claim to be in rightful possession as officers or agents of the state, and assert title and right of possession in the state. Can the court, in such an action, decline to inquire whether the plaintiff is, in law, entitled to possession, and whether the individual defendants have any right, in law, to withhold possession? And if the court finds upon due inquiry that the plaintiff is entitled to possession and that the assertion by the defendants of right of possession and title in the state is without legal foundation, may it not, as between the plaintiff and the defendants, adjudge that the plaintiff recover possession?
We are of opinion that the principles announced by this Court in cases heretofore decided furnish an answer to these questions.
The leading case upon the subject is United States v. Lee, 106 U. S. 196. It is true that the question there presented was whether the suit was one against the United States within the recognized rule that the government, without its consent, cannot be sued directly in any court by original process as a defendant. But it cannot be doubted that the question whether a particular suit is one against the state within the meaning of the Constitution must depend upon the same principles that determine whether a particular suit is one against the United States.
What was the case of United States v. Lee? By direction of the Executive Department of the government, proceeding, as was supposed, under legislative authority, Kaufman and Strong, as officers and agents of the United States, held possession of certain real estate in Virginia known as "Arlington," and constituting a national cemetery, in which were interred the remains of Union soldiers. An action was brought by Lee in a circuit court of the United States against Kaufman and Strong to recover possession. The action proceeded upon the ground that the legal title and right of possession were in the plaintiff. The Attorney General of the United States, without submitting the rights of the government to the jurisdiction of the court, suggested in writing that the property in dispute was held, occupied, and possessed by the United States as a military station, through its officers and agents having actual possession for the government, but without any personal interest in it, and therefore that the court had no jurisdiction of the subject of the controversy. Upon these grounds, he moved that all further proceedings be stayed and dismissed. The motion was denied. The same question was raised by the answers of Kaufman and Strong. There was a verdict and judgment against the defendants.
"The case before us is a suit against Strong and Kaufman as individuals, to recover possession of property. The suggestion was made that it was the property of the United States, and that the Court, without inquiring into the truth of this suggestion, should proceed no further, and in this case, as in that [United States v. Peters, 5 Cranch 115], after a judicial inquiry had made it clear that the property belonged to plaintiff, and not to the United States, we are still asked to forbid the court below to proceed further, and to reverse and set aside what it has done, and thus refuse to perform the duty of deciding suits properly brought before us by citizens of the United States."
so often and so clearly overruled in previous well considered decisions."
"conceding that the property in controversy in this case is devoted to a proper public use, and that this has been done by those having authority to establish a cemetery and a fort, the verdict of the jury finds that it is and was the private property of the plaintiff, and was taken without any process of law, and without any compensation. Undoubtedly those provisions of the Constitution are of that character which it is intended the courts shall enforce when cases involving their operation and effect are brought before them. The instances in which the life and liberty of the citizen have been protected by the judicial writ of habeas corpus are too familiar to need citation, and many of these cases -- indeed, almost all of them -- are those in which life or liberty was invaded by persons assuming to act under the authority of the government. Ex Parte Milligan, 4 Wall. 2. If this constitutional provision is a sufficient authority for the court to interfere to rescue a prisoner from the hands of those holding him under the asserted authority of the government, what reason is there that the same courts shall not give remedy to the citizen whose property has been seized without due process of law, and devoted to public use without just compensation?"
position assumed here is that, however clear his rights, no remedy can be afforded to him when it is seen that his opponent is an officer of the United States, claiming to act under its authority; for, as Mr. Chief Justice Marshall says, to examine whether this authority is rightfully assumed is the exercise of jurisdiction, and must lead to the decision of the merits of the question. The objection of the plaintiffs in error necessarily forbids any inquiry into the truth of the assumption that the parties setting up such authority are lawfully possessed of it, for the argument is that the formal suggestion of the existence of such authority forbids any inquiry into the truth of the suggestion. But why should not the truth of the suggestion and the lawfulness of the authority be made the subject of judicial investigation? In the case supposed, the court has before it a plaintiff capable of suing, a defendant who has no personal exemption from suit, and a cause of action cognizable in the court -- a 'case' within the meaning of that term as employed in the Constitution, and defined by the decisions of this Court. It is to be presumed in favor of the jurisdiction of the court that the plaintiff may be able to prove the right which he asserts in his declaration. What is that right as established by the verdict of the jury in this case? It is the right to the possession of the homestead of the plaintiff; a right to recover that which has been taken from him by force and violence, and detained by the strong hand. This right being clearly established, we are told that the court can proceed no further because it appears that certain military officers, acting under the orders of the President, have seized this estate and converted one part of it into a military fort and another into a cemetery."
such power is given, but it is absolutely prohibited, both to the executive and the legislative, to deprive anyone of life, liberty, or property without due process of law, or to take private property without just compensation. These provisions for the security of the rights of the citizen stand in the Constitution in the same connection and upon the same ground as they regard his liberty and his property. It cannot be denied that both were intended to be enforced by the judiciary as one of the departments of the government established by the Constitution. As we have already said, the writ of habeas corpus has been often used to defend the liberty of the citizen, and even his life, against the assertion of unlawful authority on the part of the executive and the legislative branches of the government. See Ex Parte Milligan, 4 Wall. 2; Kilbourn v. Thompson, 103 U. S. 168. No man in this country is so high that he is above the law. No officer of the law may set that law at defiance with impunity. All the officers of the government, from the highest to the lowest, are creatures of the law, and are bound to obey it."
That though the nature of the controversy is one peculiarly appropriate to the judicial function, though the United States is no party to the suit, though one of the three great branches of the government to which by the Constitution this duty has been assigned has declared its judgment after a fair trial, the unsuccessful party can interpose an absolute veto upon that judgment by the production of an order of the Secretary of War, which that officer had no more authority to make than the humblest private citizen."
We have made these extracts from the opinion of the Court in the Lee case because the reasons there assigned for the conclusion reached control the determination of the present case. If a suit by an individual against individuals to recover the possession of property is not a suit against the United States merely by reason of possession's being held by the defendants as agents of the United States, and under title asserted to be in the government, we cannot perceive how the present suit can be regarded as one against the state merely because the defendants assert a right of possession in the state through them as its officers and agents.
The essential principles of the Lee case have not been departed from by this Court, but have been recognized and enforced in recent cases.
opinion carefully stated, but held the officers liable as unauthorized trespassers, and turned them out of their unlawful possession."
"In these cases, he is not sued as an officer of the government, but as an individual, and the court is not ousted of jurisdiction because he asserts the authority of such officer. To make out that defense, he must show that his authority was sufficient in law to protect him. In this class is included United States v. Lee, 106 U. S. 196, where the action of ejectment was held to be in its essential character an action of trespass, with the power in the court to restore the possession to the plaintiff as part of the judgment, and the defendants Strong and Kaufman, being sued individually as trespassers, set up their authority as officers of the United States, which this Court held to be unlawful, and therefore insufficient as a defense."
See also Stanley v. Schwalby, 162 U. S. 255, 162 U. S. 271; Belknap v. Schild, 161 U. S. 10.
"is where the suit is brought against the officers of the state, as representing the state's action and liability, thus making it, though not a party to the record, the real party against which the judgment will so operate as to compel it to specifically perform its contracts,"
"is where a suit is brought against defendants who, claiming to act as officers of the state, and under the color of an unconstitutional statute, commit acts of wrong and injury to the rights and property of the plaintiff acquired under a contract with the state. Such suit, whether brought to recover money or property in the hands of such defendants, unlawfully taken by them in behalf of the state, or for compensation in damages, or, in a proper case, where the remedy at law is inadequate, for an injunction to prevent such wrong and injury, or for a mandamus, in a like case, to enforce upon the defendant the performance of a plain legal duty, purely ministerial, is not, within the meaning of the Eleventh Amendment, an action against the state,"
citing Osborn v. Bank, 9 Wheat. 738; Davis v. Gray, 16 Wall. 203; Tomlinson v. Branch, 15 Wall. 460; Litchfield v. Webster County, 101 U. S. 773; Allen v. Baltimore & Ohio Railroad, 114 U. S. 311; Board of Liquidation v. McComb, 92 U. S. 531; Poindexter v. Greenhow, 114 U. S. 270.
"The result was correctly stated to be that where a suit is brought against defendants who claim to act as officers of a state, and, under color of an unconstitutional statute, commit acts of wrong and injury to the property of the plaintiff, to recover money or property in their hands unlawfully taken by them in behalf of the state, or for compensation for damages, or, in a proper case, for an injunction to prevent such wrong and injury, or for a mandamus, in a like case, to enforce the performance of a plain legal duty, purely ministerial, such suit is not, within the meaning of the amendment, an action against the state."
acts of wrong and injury to the property of the plaintiff to recover money or property in their hands unlawfully taken by them in behalf of the state, or for compensation for damages, is not, within the meaning of the Constitution, an action against the state."
"It certainly can never be alleged that a mere suggestion of title in a state to property in possession of an individual must arrest the proceedings of the court and prevent their looking into the suggestion and examining the validity of the title."
by the supreme law of the land -- namely, upon just compensation made or secured.
"Another consideration is that, since the United States cannot be made a defendant to a suit concerning its property, and no judgment in any suit against an individual who has possession or control of such property can bind or conclude the government, as is decided by this Court in the case of Carr v. United States, 98 U. S. 433, already referred to, the government is always at liberty, notwithstanding any such judgment, to avail itself of all the remedies which the law allows to every person, natural or artificial, for the vindication and assertion of its rights. Hence, taking the present case as an illustration, the United States may proceed by a bill in chancery to quiet its title, in aid of which, if a proper case is made a writ of injunction may be obtained. Or it may bring an action of ejectment, in which, on a direct issue between the United States as plaintiff and the present plaintiff as defendant, the title of the United States could be judicially determined. Or, if satisfied that its title has been shown to be invalid, and it still desires to use the property, or any part of it, for the purpose to which it is now devoted, it may purchase such property by fair negotiation, or condemn it by a judicial proceeding in which a just compensation shall be ascertained and paid according to the Constitution."
106 U. S. 106 U.S. 222.