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Small Business Administration v. McClellan, 364 U.S. 446 (1960)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Small Business Administration v. McClellan, 364 U.S. 446 (1960)
Small Business Administration v. McClellan No. 42 Argued November 9-10, 1960 Decided December 5, 1960 364 U.S. 446
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
Syllabus
When the Small Business Administration, created by the Small Business Act of 1953, with authority, inter alia, to lend government funds to small businesses, has joined a private bank in making a loan and the borrower becomes a bankrupt, the Administration’s interest in the unpaid balance of the loan is entitled to the priority provided for "debts due to the United States" under R.S. § 3466 and § 64 of the Bankruptcy Act -- even though the Administration has agreed to share with the bank any money collected on the loan. Pp. 447-453.
(a) The Small Business Administration is an integral part of the governmental mechanism -- not a separate legal entity -- and it is entitled to the priority of the United States in collecting loans made by it out of government funds. Sloan Shipyards Corp. v. United States Fleet Corp., 258 U.S. 549, and Reconstruction Finance Corp. v. Menihan Corp., 312 U.S. 81, distinguished. United States v. Remund, 330 U.S. 539, followed. Pp. 448-450.
(b) Since the Administration participated in making the loan and acquired a beneficial interest in it prior to the petition in bankruptcy, it is immaterial that formal assignment to the Administration of the note evidencing the debt was not made by the bank until after the filing of the petition. P. 450.
(c) The Administration did not forfeit its right to priority by agreeing to turn over to the bank part of any distribution obtained because of its priority. Pp. 451-453.
(d) Governmental priority in bankruptcy proceedings is not inconsistent with the basic purposes and provisions of the Small Business Act. P. 453.
272 F.2d 143, reversed.
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Chicago: U.S. Supreme Court, "Syllabus," Small Business Administration v. McClellan, 364 U.S. 446 (1960) in 364 U.S. 446 364 U.S. 447. Original Sources, accessed November 24, 2024, http://originalsources.com/Document.aspx?DocID=CHTQR15N9W99VZA.
MLA: U.S. Supreme Court. "Syllabus." Small Business Administration v. McClellan, 364 U.S. 446 (1960), in 364 U.S. 446, page 364 U.S. 447. Original Sources. 24 Nov. 2024. http://originalsources.com/Document.aspx?DocID=CHTQR15N9W99VZA.
Harvard: U.S. Supreme Court, 'Syllabus' in Small Business Administration v. McClellan, 364 U.S. 446 (1960). cited in 1960, 364 U.S. 446, pp.364 U.S. 447. Original Sources, retrieved 24 November 2024, from http://originalsources.com/Document.aspx?DocID=CHTQR15N9W99VZA.
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