Abe Fortas

“ Yazell's leviable assets have been exhausted. The desire of the Federal Government to collect on its loans is understandable. Perhaps even in the case of a disaster loan, the zeal of its representatives may be commended. But this serves merely to present the question-not to answer it. Every creditor has the same interest in this respect; every creditor wants to collect. [16] The United States, as sovereign, has certain preferences and priorities, [17] but neither Congress nor this Court has ever asserted that they are absolute. ”

“ Next, it seems clear (1) that the SBA was aware and is chargeable with knowledge that the contract would be subject to the Texas law of coverture; (2) that both the SBA and the Yazells entered into the contract without any thought that the defense of coverture would be unavailable to Mrs. Yazell with respect to her separate property as provided by Texas law; and (3) that, in the circumstances, the United States is seeking the unconscionable advantage of recourse to assets for which it did not bargain. ”

“ Specifically, the question presented is whether, in the circumstances of this case, the Federal Government, in its zealous pursuit of the balance due on a disaster loan made by the Small Business Administration, may obtain judgment against Ethel Mae Yazell of Lampasas, Texas. At the time the loan was made, Texas law provided that a married woman could not bind her separate property unless she had first obtained a court decree removing her disability to contract. ”

“ Clearly, in the case of these SBA loans there is no 'federal interest' which justifies invading the peculiarly local jurisdiction of these States, in disregard of their laws, and of the subtleties reflected by the differences in the laws of the various States which generally reflect important and carefully evolved state arrangements designed to serve multiple purposes. ”

“ The Court observed in Clearfield that the difficulty of determining which state rule to apply could be a persuasive argument in favor of a federal rule. Ibid. No such difficulty exists here, of course.↑ The Financial Assistance Manual of the Small Business Administration, SBA-500, is replete with admonitions to follow state law carefully. Thus § 401.03 reads: 'Compliance with Applicable Laws. When the United States disburses its funds, it is exercising a constitutional function or power and its rights and duties are governed by Federal rather than local law. ”

“ The Government quotes the decision out of context, omitting the following italicized words: the Court stated that 'Like private individuals and businesses, the Government enjoys the unrestricted power * * * to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases.' Mrs. ”

“ Weingarten, Creditors' Rights, 10 Wayne L.Rev. 184 (1963) .↑ Brief for the United States, p. 15, n. 10. The States are, in addition to Texas and Michigan: Alabama, Arizona, California, Florida, Georgia, Idaho, Indiana, Kentucky, Nevada, and North Carolina. With the exception of Michigan, see n. 22, supra, none of these States other than Texas has a coverture rule applicable to facts such as those presented by this case.↑ In California a wife has full capacity to contract. Cal.Civ.Code § 158. Her separate property is liable for her own debts, as are her earnings. ”

“ Yazell before a notary public, which was required by Texas law as a part of the institution of coverture. The notary attested, in the words of the applicable Texas statute, that 'Ethel Mae Yazell, wife of Delbert L. Yazell * * * whose name is subscribed to the (chattel mortgage) * * * having been examined by me privily and apart from her husband * * * acknowledged such instrument to be her act and deed, and declared that she had willingly signed the same * * *.' See Tex.Rev.Civ.Stat.Ann. Art. 6608. See also Art. ”

“ Miller, 229 F.2d 839 (C.A.3d Cir.) (Pennsylvania prohibition of garnishment of future debts of garnishee to debtor) .↑ In Texas, the value of the homestead that is exempt from execution is $5,000, as of the time of its designation as a homestead and without reference to the value of any improvements, Tex.Rev.Civ.Stat.Ann. Art. ”