Federal Land Bank of Columbia v. Gaines

CoNNOR, J. The transactions between the plaintiff and the defendant as disclosed by the statement of facts agreed appearing in the record were conducted in strict accord with the provisions of the act of Congress known as the Federal Farm Loan Act. In accordance with these provisions, the defendant, who had applied for and accepted membership in the Columbus National Farm Loan Association, applied through said association to the plaintiff for a loan of one thousand dollars, offering as security for said loan her note for one thousand dollars, secured by a mortgage on twenty-seven acres of land in Polk County, North Carolina. This application was endorsed by the association, and approved by the plaintiff. Upon the delivery to it of the note and mortgage duly executed by the defendant, the plaintiff transmitted to the Columbus National Farm Loan Association funds to be disbursed by said association to the defendant on account of the loan. The said association has disbursed only the sum of $54.23 of said funds. The balance of said funds are on deposit in the Polk County Bank and Trust Company, and are not available for closing the loan. The defendant has received no consideration for her note and mortgage, except the sum of $54.23, unless it shall be held that the Columbus National Farm Loan Association received the funds from the plaintiff as the agent of the defendant. *282 As we construe the provisions of the Federal Farm Loan Act, the Columbus National Farm Loan Association was not the agent of the defendant in the transactions disclosed by the statement of facts agreed. The Federal Farm Loan Act provides for the organization of National Farm Loan Associations as intermediaries between borrowers and Federal Land Banks. All applications for loans from a Federal Land Bank must be made through a National Farm Loan Association. No loan can be made by a Federal Land Bank directly to the borrower. When the application for a loan has been received by a Federal Land Bank, through a National Farm Loan Association, and approved, the act requires that funds to close the loan shall be transmitted by the Land Bank to the Association, for disbursement to the borrower. Under the provisions of the act, the National Farm Loan Association is a public agent, designated by the act as the intermediary between the bank and the borrower. It was so held in Fed. Land Bank v. Shingler, 174 Ga., 352, 162 S. E., 815, and in Bjorkstam v. Fed. Land Bank, 138 Wash., 456, 244 Pac., 981. There is no error in the judgment in this case. It is Affirmed.