B-86873, JULY 12, 1949, 29 COMP. GEN. 11

B-86873, JULY 12, 1949, 29 COMP. GEN. 11

PROPERTY ACQUIRED UNDER INSURED MORTGAGE TRANSACTIONS - DISPOSITION OF EXCESS SALE PROCEEDS THE PROCEEDS OF SALE OR PROPERTIES ACQUIRED BY THE FEDERAL HOUSING COMMISSIONER UNDER INSURED MORTGAGE TRANSACTIONS IN EXCESS OF THE EXPENSES INCIDENT TO SUCH SALES MAY NOT BE PAID TO MORTGAGORS FROM AND AFTER AUGUST 10, 1948, THE EFFECTIVE DATE OF AMENDMENT TO SECTION 207 OF THE NATIONAL HOUSING ACT, AS CONTAINED IN THE HOUSING ACT OF 1948, WHICH, IN EFFECT, REPEALED THE RIGHT OF MORTGAGORS UNDER THE ORIGINAL SECTION 207 TO RECEIVE SUCH EXCESS PROCEEDS AND PROVIDED INSTEAD THAT UNPAID EXCESS PROCEEDS BE RETAINED AND DEPOSITED TO THE HOUSING INSURANCE FUND, REGARDLESS OF WHEN THE INSURANCE TRANSACTIONS WERE ENTERED INTO.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY, JULY 12, 1949.

REFERENCE IS MADE TO YOUR LETTER OF JUNE 6, 1949, IN WHICH YOU CALL ATTENTION TO THE AMENDMENT TO SECTION 207 OF THE NATIONAL HOUSING ACT, 48 STAT. 1252, 12 U.S.C. 1713 (H) (1), CONTAINED IN THE HOUSING ACT OF 1948, 62 STAT. 1268, WHEREIN THE WORDS "PAID TO THE MORTGAGOR OF SUCH PROPERTY" ARE REPLACED BY THE WORDS "RETAINED BY THE ADMINISTRATOR AND CREDITED TO THE HOUSING INSURANCE FUND," EFFECTIVE AUGUST 10, 1948, SO THAT THE SECTION NOW READS, IN PART, AS FOLLOWS:

(H) * * * IF THE NET AMOUNT REALIZED FROM THE MORTGAGE, AND ALL CLAIMS IN CONNECTION THEREWITH, SO ASSIGNED, TRANSFERRED, AND DELIVERED, AND FROM THE PROPERTY COVERED BY SUCH MORTGAGE AND ALL CLAIMS IN CONNECTION WITH SUCH PROPERTY, AFTER DEDUCTING ALL EXPENSES INCURRED BY THE ADMINISTRATOR IN HANDLING, DEALING WITH, ACQUIRING TITLE TO, AND DISPOSING OF SUCH MORTGAGE AND PROPERTY AND IN COLLECTING SUCH CLAIMS, EXCEEDS THE FACE VALUE OF THE DEBENTURES ISSUED AND THE CASH ADJUSTMENT PAID TO THE MORTGAGEE PLUS ALL INTEREST PAID ON SUCH DEBENTURES, SUCH EXCESS SHALL BE DIVIDED AS FOLLOWS:

(1) IF SUCH EXCESS IS GREATER THAN THE TOTAL AMOUNT PAYABLE UNDER THE CERTIFICATE OF CLAIM ISSUED IN CONNECTION WITH SUCH PROPERTY, THE COMMISSIONER SHALL PAY TO THE HOLDER OF SUCH CERTIFICATE THE FULL AMOUNT SO PAYABLE, AND ANY EXCESS REMAINING THEREAFTER SHALL BE RETAINED BY THE COMMISSIONER AND CREDITED TO THE HOUSING INSURANCE FUND * * *.

YOU ASK IN EFFECT WHETHER, IN VIEW OF THE AMENDMENT TO THE LAW, PAYMENT OF EXCESS AMOUNTS REALIZED FROM THE SALE OF PROPERTIES CONVEYED TO THE FEDERAL HOUSING COMMISSIONER IN CONNECTION WITH INSURED MORTGAGE TRANSACTIONS ENTERED INTO PRIOR TO AUGUST 10, 1948, THE EFFECTIVE DATE OF THE AMENDMENT, MAY BE MADE TO THE MORTGAGORS, OR WHETHER, AFTER AUGUST 10, 1948, ANY SUCH UNPAID EXCESS PROCEEDS ARE TO BE RETAINED AND DEPOSITED TO THE HOUSING INSURANCE FUND, REGARDLESS OF WHEN THE INSURANCE TRANSACTION WAS ENTERED INTO.

NORMALLY, AN AMENDATORY STATUTE WILL BE CONSTRUED PROSPECTIVELY, AND NOT RETROSPECTIVELY UNLESS REQUIRED IN EXPRESS TERMS OR BY NECESSARY IMPLICATION. 16 COMP. GEN. 1051, AND CASES THEREIN CITED. BUT IN DETERMINING THE EFFECT OF AN AMENDATORY ACT ON TRANSACTIONS AND EVENTS COMPLETED PRIOR TO ITS ENACTMENT, IT IS NECESSARY TO DISTINGUISH BETWEEN PROVISIONS ADDED TO THE ORIGINAL ACT BY THE AMENDMENT AND PROVISIONS OF THE ORIGINAL ACT REPEALED BY THE AMENDMENT. PROVISIONS ADDED BY THE AMENDMENT WHICH AFFECT SUBSTANTIVE RIGHTS WILL NOT BE CONSTRUED TO APPLY TO TRANSACTIONS AND EVENTS COMPLETED PRIOR TO THE ENACTMENT. BUT IN ACCORDANCE WITH THE RULE APPLICABLE TO REPEALING ACTS, IN THE ABSENCE OF A SAVING CLAUSE OR SOME OTHER CLEAR INDICATION TO THE CONTRARY, ALL RIGHTS DEPENDENT UPON THE REPEALED PROVISIONS OF THE ORIGINAL ACT WHICH HAD NOT VESTED OR BEEN PROSECUTED TO COMPLETION PRIOR TO THE ENACTMENT OF THE AMENDMENT ARE DESTROYED. SUTHERLAND, STATUTORY CONSTRUCTION, SECTION 1936, AND CASES THEREIN CITED. THE FACT THAT AN INDIVIDUAL HAS ACQUIRED CERTAIN RIGHTS OR ANTICIPATES CERTAIN BENEFITS UNDER A STATUTE CANNOT AFFECT A LEGISLATIVE DETERMINATION THAT THE STATUTE IS REPEALED, SINCE THERE CAN BE NO VESTED RIGHT IN THE EXISTING PUBLIC LAW. NEWTON V. MAHONING COUNTY, 100 U.S. 548.

THE PERTINENT LANGUAGE OF THE HOUSING ACT OF 1948, SUPRA, 62 STAT. 1274, IS AS FOLLOWS:

(P) SECTION 207 (H) IS AMENDED BY STRIKING OUT, IN PARAGRAPH NUMBERED (1), THE WORDS "PAID TO THE MORTGAGOR OF SUCH PROPERTY," AND INSERTING IN LIEU THEREOF THE FOLLOWING: "RETAINED BY THE ADMINISTRATOR AND CREDITED TO THE HOUSING INSURANCE FUND.'

ON PAGE 34, HEARINGS BEFORE THE COMMITTEE ON BANKING AND CURRENCY, UNITED STATES SENATE, ON S. 866, 80TH CONGRESS (THE FORERUNNER OF THE HOUSING ACT OF 1948), THE IDENTICAL LANGUAGE IS EXPLAINED AS FOLLOWS:

THIS SUBSECTION ELIMINATES THE PRESENT STATUTORY REQUIREMENT THAT WHERE FHA TAKES OVER A RENTAL-HOUSING PROJECT AS A RESULT OF DEFAULT OF THE MORTGAGOR AND, THROUGH ITS EFFORTS, ULTIMATELY REALIZES A PROFIT ON THE TRANSACTION, SUCH PROFIT MUST BE TURNED OVER TO THE MORTGAGOR. IT IS NOT BELIEVED THAT THE DEFAULTING MORTGAGOR CORPORATION IS ENTITLED TO SUCH A GRATUITY BUT THAT SUCH PROFIT, IF ANY, SHOULD ACCRUE TO THE INSURANCE FUND TO OFFSET LOSSES INCURRED IN OTHER CASES.

THE RIGHT OF THE MORTGAGOR TO RECEIVE SUCH EXCESS AMOUNTS EXISTED SOLELY BECAUSE OF THE ORIGINAL PROVISIONS OF SECTION 207. EXCEPT FOR THAT SECTION, SUCH EXCESS WOULD HAVE BEEN, PROBABLY, CREDITABLE TO MISCELLANEOUS RECEIPTS, BUT IN ANY EVENT IT WOULD HAVE BEEN RETAINED BY THE UNITED STATES. THE EFFECT OF THE AMENDMENT, THEREFORE, WAS TO REPEAL THE RIGHT OF THE MORTGAGOR TO RECEIVE SUCH EXCESS. THERE IS NO SAVING CLAUSE OR OTHER CLEAR INDICATION THAT PRIOR RIGHTS WERE TO BE RETAINED, AND, BEING A REPEAL, THE AMENDMENT THUS DESTROYED ALL RIGHTS DEPENDENT UPON THE REPEALED PROVISION WHICH HAD NOT VESTED OR BEEN PROSECUTED TO COMPLETION. THEREFORE, IT IS PLAIN THAT, FROM AND AFTER AUGUST 10, 1948, NO PART OF THE PROCEEDS OF THE SALE BY THE UNITED STATES OF PROPERTY ACQUIRED BY THE FEDERAL HOUSING COMMISSIONER UNDER AN INSURANCE CONTRACT MADE PURSUANT TO THE ACT MAY BE PAID TO THE FORMER MORTGAGOR, REGARDLESS OF WHEN THE INSURANCE TRANSACTIONS WERE ENTERED INTO.