Federal Crop Insurance Corporation V. Merrill

United States Supreme Court

332 U.S. 380

FEDERAL CROP INSURANCE CORPORATION v. MERRILL

Argued: Oct. 16, 1947. --- Decided: Nov 10, 1947

We brought this case here because it involves a question of importance in the administration of the Federal Crop Insurance Act. 331 U.S. 798, 67 S.Ct. 1199.

The relevant facts may be briefly stated. Petitioner (hereinafter called the Corporation) is a wholly Government-owned enterprise, created by the Federal Crop Insurance Act, as an 'agency of and within the Department of Agriculture.' Sec. 503 of Chapter 30, Act of February 16, 1938, 52 Stat. 72, 7 U.S.C. § 1503, as amended, 7 U.S.C.A. § 1503. To carry out the purposes of the Act, the Corporation, 'Commencing with the wheat * * * crops planted for harvest in 1945' is empowered 'to insure, upon such terms and conditions not inconsistent with the provisions of this title as it may determine, producers of wheat * * * against loss in yields due to unavoidable causes, including drought * * *.' 52 Stat. 74, § 508(a), as amended, 55 Stat. 255, in turn amended by the Act of December 23, 1944, Chapter 713, 58 Stat. 918, 7 U.S.C.Supp. V, § 1508(a), 7 U.S.C.A. § 1508(a). In pursuance of its authority, the Corporation on February 5, 1945, promulgated its Wheat Crop Insurance Regulations, which were duly published in the Federal Register on February 7, 1945. 10 F.R. 1586.

On March 26, 1945, respondents applied locally for insurance under the Federal Crop Insurance Act to cover wheat farming operations in Bonneville County, Idaho. Respondents informed the Bonneville County Agricultural Conservation Committee, acting as agent for the Corporation, that they were planting 460 acres of spring wheat and that on 400 of these acres they were reseeding on winter wheat acreage. The Committee advised respondents that the entire crop was insurable, and recommended to the Corporation's Denver Branch Office acceptance of the application. (The formal application itself did not disclose that any part of the insured crop was reseeded.) On May 28, 1945, the Corporation accepted the application.

In July, 1945, most of the respondents' crop was destroyed by drought. Upon being notified, the Corporation, after discovering that the destroyed acreage had been reseeded, refused to pay the loss, and this litigation was appropriately begun in one of the lower courts of Idaho. The trial court rejected the Corporation's contention, presented by a demurrer to the complaint, that the Wheat Crop Insurance Regulations barred recovery as a matter of law. Evidence was thereupon permitted to go to the jury to the effect that the respondents had no actual knowledge of the Regulations, insofar as they precluded insurance for reseeded wheat, and that they had in fact been misled by petitioner's