Petition For A Writ 5

PETITION FOR A WRIT OF CERTIORARI ___________________ The Court of Appeal for the Ninth Circuit as well as other federal appellate courts have decided an important question of federal law that has not been, but should be, settled by this Court, or has decided an important federal question in a way that conflicts with relevant decisions of this Court. Petitioner Reuben Nieves, a homeowner, like millions in danger of being foreclosed non-judicially or who have been foreclosed non judicially, respectfully prays that a writ of certiorari be issued to review the judgment of the Ninth Circuit Court of Appeal. The issue is one of First Impression to this Court because this court has never decided whether a federally chartered bank corporation created under an act of Congress to provide an important governmental function could use a non judicial procedure that allows the taking of a property interest without a hearing thus violating the 5th Amendment. This Court has made numerous decisions which would have been relevant in determining whether non judicial procedures were applicable given the nature of these corporations. Specifically, the issue involves a provision in a mortgage contract which allows the bank( Wachovia Mortgage fsb), a corporation federally created and controlled by the director of the Office of Thrift Supervision to use a non-judicial foreclosure to redeem the property. It is an issue that goes to the core of the nature of federally chartered corporations created under special law providing an important governmental function. This case deals with the rights and obligations of these corporations even to put such a provision in a contract. It is an issue which, in the context of the current economic crisis and the massive foreclosures, sweeps the breadth of this nation like a plague destroying families and communities as it spreads, swelling the homeless population in its wake. This court is asked, as it was asked in the case of Fidelity Federal S & L Ass’n v Reginald De La Cuesta, 458 U.S. 141 (1982) , to decide upon an issue of great importance on another

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provision in a mortgage contract involving a right or immunity guaranteed by the Constitution that forms an essential element of plaintiff’s claim. An issue that is greater even than was decided in that case because it involves a constitutional right affecting the lives of millions of families across this nation.

Moreover, the

decision in the Ninth Circuit, as well as other appellate decisions regarding non judicial foreclosures contravene several Supreme Court decisions regarding the nature of corporations incorporated for a public purpose under an Act of Congress which would affect whether these corporations could use a non judicial foreclosure without violating the 5th Amendment due process clause. OPINIONS BELOW The Opinion of the Ninth Circuit Court of Appeal is attached as APPENDIX_________ The Opinion of the District Court is attached as APPENDIX_______ JURISDICTION The Ninth Circuit entered its judgment on _________. A petition for rehearing was denied on ___________, 2009 The Supreme Court has jurisdiction under 12 U.S.C. 1254(1) CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED I.

THE 5TH AMENDMENT to the Bill of Rights states : “No person shall be. . .deprived of life, liberty, or property, without due process of law.”

II. 12 U.S.C §§ 1461 Et seq.The HOME OWNERS’ LOAN ACT

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AN ACT To provide emergency relief with respect to home mortgage indebtedness, to refinance home mortgages, to extend relief to the owners of homes occupied by them and who are unable to amortize the debt elsewhere, to amend the Federal Home Loan Bank Act, to increase the market the obligations of the United States and for other purposes: III . Sec. 5[12 U.S.C. 1464] FEDERAL SAVINGS ASSOCIATION (a) In GENERAL—In order to provide thrift institutions for the deposit of funds and for the extension of credit for homes and other goods and services, the Director is authorized, under such regulations as the Director may prescribe— To issue charters therefore, giving primary consideration of the best practices of thrift institutions in the United States. The lending and investment powers conferred by this section are intended to encourage such institutions to provide credit for housing safely and soundly. (1)

(2) To issue charters therefore, giving primary consideration of the best practices of thrift institutions in the United States. The lending and investment powers conferred by this section are intended to encourage such institutions to provide credit for housing safely and soundly. IV. 12 cfr § 560. Applicability of law. Occupation of field. Pursuant to sections 4(a) and 5(a) of the HOLA, 12 U.S.C. 1463(a), 1464(a), OTS is authorized to promulgate regulations that preempt state laws affecting the operations of federal savings associations when deemed appropriate to facilitate the safe and sound operation of federal savings associations… V. 12 U.S.C. § 38. The National Bank Act The Act entitled “An Act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof,” approved June 3, 1864, shall be known as “The National Bank Act.”

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VI. 12 U.S.C. § 24. Corporate powers of associations Third. To make contracts. Fourth. To sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons. Fifth. To elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places. Sixth. To prescribe, by its board of directors, bylaws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed. Seventh. To exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking. . . VII. 28 USC § 453-OATHS OF JUSTICES AND JUDGES Each justice or judge of the United States shall take the following oath or affirmation before performing the duties of his office: “I,______, do solemnly swear (or affirm) that I will administer justice without respect to persons, and do equal right to the poor and to the rich, and that I will faithfully and impartially discharge and perform all the duties incumbent upon me as___under the Constitution and laws of the United States. So help me God”

STATEMENT OF THE CASE This is an action brought by plaintiff for declarative and injunctive relief from a 5th Amendment violation as applied from an impending non-judicial

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foreclosure for the non-payment of installment payments required under the loan agreement between REUBEN NIEVES, plaintiff and Wachovia Mortgage fsb, formally World Savings Bank fsb, defendants based, in part, on defendant’s election to use a non-judicial foreclosure procedure which would deny plaintiff procedural due process under the 5th amendment, and beyond the scope of a law of Congress. Plaintiff alleges that the provision in the mortgage agreement requiring plaintiff to transfer his interest to a trustee with a power of sale is therefore ultra vires. Plaintiff alleges that Wachovia Mortgage fsb, is an instrumentality of the Federal Government, and as a federally chartered bank serving a public purpose in accordance with a federal mandate. Plaintiff , a 66 year old disabled real estate professional, whose livelihood was damaged by the wrongful acts of all lenders including defendant who befouled the real estate market by their participation in the housing meltdown. Plaintiff alleges that Defendant, as federally chartered bank, serves a public purpose pursuant to the Home Owner Loan Act(HOLA) . This action is also based on the wrongful and reckless underwriting standards which defendant, in concert with all lenders who used stated income products, with adjustable rate mortgages and negative amortization and thereafter extended credit to people who could default upon the loan adjusting. The wrongful conduct of defendants had a “chilling effect” on the real estate market with the massive amounts of foreclosures that the lenders thrust unto the real estate market hugely discounting these homes and affecting the value of the surrounding homes to the point where homeowners could not refinance or sell their homes without incurring huge losses. Defendants’ actions undermined plaintiff’s ability to repay his mortgage debt to defendant. Plaintiff alleges that defendant’s wrongful conduct led to plaintiff experiencing extreme emotional distress, and loss of confidence as well as hypertension. Defendants’ wrongful conduct affected his credit worthiness, and he has been subjected to humiliation in that plaintiff has always prided himself in

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paying his debts. Plaintiff has been forced to seek food stamps and medi-Cal for the first time in his life. STATEMENT OF THE FACTS The facts are not in dispute. Defendants ,WACHOVIA MORTGAGE fsb is a federally created and controlled chartered bank incorporated in a banking system created under an Act of Congress—The Home Owner Loan Act (HOLA) to provide an important public function----residential mortgage lending. There is no dispute that a provision in the mortgage agreement provides that plaintiff irrevocably transfer his interest with a power of sale in favor of lender upon default of borrowers installment payments of the loan. There is no dispute that this procedure constitutes a non-judicial procedure which does not allow a hearing. PROCEDURAL HISTORY Plaintiff Reuben Nieves filed his complaint on May 7th, 2008 in the District Court-Sacramento Division. 2:08-cv-00988-MCE-GGH. On recommendation of the Magistrate the complaint was dismissed for “lack of subject-matter jurisdiction on August 08, 2008 whereby plaintiff appealed to the Ninth Circuit on August 12th, 2008. All briefs were submitted by all parties by January 28th, 2009. As of September 09th, 2009 the courts had not made any determination on the merits of plaintiff’s complaint. On August 25th, 2009 plaintiff sought an emergency preliminary injunction or stay pending appeal under rule 27-3 to stop a trustee sale of his property scheduled for September 10th, 2009. On September 09, 2009 the Ninth Circuit about 3:15 in the afternoon denied plaintiff’s motion without comment. Justice Harry Pregerson dissented and stated he would have granted the emergency motion for a stay of the foreclosure pending appeal. SUMMARY OF ARGUMENT

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Plaintiff brought this action under 28 USC 1331 alleging WACHOVIA MORTGAGE fsb[formally World Savings fsb], a federally chartered bank, incorporated a provision into his loan agreement which required plaintiff to irrevocably transfer his interest to a trustee with a power of sale in favor of the lender upon default of plaintiff’s installment payments on the loan. Plaintiff alleges that this is a non-judicial procedure which does not allow a hearing before plaintiff’s property interest is taken from him is a denial of procedural due process in violation of the 5th Amendment. Plaintiff alleges that by virtue of the character as a federally chartered corporation created under an act of Congress Home Owner Loan Act(HOLA) to provide and important public function the corporation is prohibited from applying this provision which would deny procedural due process. Plaintiff alleges that the lending functions of Wachovia Mortgage fsb are governmental and not proprietary. Furthermore, the denial of a preliminary injunction of the trustee’s sale by the Ninth Circuit was more than abuse of discretion and a clear indication of disparate and unfair treatment of which indicates an animus toward pro se informa pauperis litigants. ARGUMENT I. BANK’S USE OF NON-JUDICIAL FORECLOSURES IS NOT WITHIN THE SCOPE OF A LAW OF CONGRESS A. BANKS CAN BE A GOVERNMENTAL ACTOR IN VIOLATION OF THE 5TH AMENDMENT “… Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance” Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961) With that advice, we must pierce the corporate veil to determine the involvement of the federal government to this corporate entity.

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On June 24th, 2008 Judge Gregory G. Hollows issued his ORDER and FINDINGS AND RCOMMENDATIONS APPENDIX pg. 26, lns 16-22 in which he stated: The court dismissed plaintiff’s §1983 claim on the ground that defendants are not state actors and are not acting in conjunction with state actors or implementing state policy, and that national banking legislation does not confer a right protected by the Civil Rights Act. The court dismissed plaintiff’s last claim on the similar ground that defendants are not “federal instrumentalities having a symbiotic relationship” with the federal government but private entities whose conduct is not actionable under the federal constitution. Since no federal claims remained, the court also dismissed plaintiff’s remaining, pendant state law, claims. On August 6th, 2008 Judge Morrison C. England adopted Magistrate Hollows Recommendation and issued a final Order dismissing plaintiff’s complaint without leave to amend. See APPENDIX, p.59, ln 7 . Plaintiff contends that the loan agreement signed by plaintiff on Sept. 29, 2006, contains a provision Irrevocably granting and conveying the Property to the Trustee, in trust for Lender, with a power of sale subject to the terms of the Security Instrument for a default in the payments to the lender.(1st amended complaint, APPENDIX, pg. 14,lns 23-28.

As national banks and federal savings

banks, Defendants, and Does 1-10 have a symbiotic relationship with the federal government(1st amended complaint, APPENDIX, pg 9, lns 11-15. National banks and federal savings banks are agencies of the United States created to promote its fiscal policies. APPENDIX, p. 15, lns 6-7. National banks and federal savings banks benefit by not paying state taxes, avoiding state predatory lending laws through the concept of Federal preemption, allowing them to export high interest for the credit card thus avoiding the state usury laws. Federal Savings banks also have the same benefits and are no less instrumentalities of the federal government than national banks whose purpose is

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to promote its fiscal policies. Alexander Hamilton argued that the Central Bank was necessary to the nation in cases of emergency such as the financing of war, to extend credit for Agriculture, trade, and to support the growth of manufacturing in the United States. Hamilton believed that there was a symbiotic relationship between agriculture, commerce, and manufacturing, and that progress in each of these sectors was necessary for America’s economic development. (In the Report of Credit II, Dec. 1790) B. A PARTY MUST STATE FACTS SUFFICIENT TO STATE A EITHER A th 5 or 14th AMENDMENT DUE PROCESS CLAIM Non-judicial foreclosures have been the subject of a flurry of cases including the most current Apao v. San Diego Home Loans, Inc.,324 F3d 1091, Ninth Circuit (2002) a California corporation. Margaret Apao lost her home to a foreclosure and sale under Hawaii’s non-judicial foreclosure statute. The federal district court dismissed the complaint for failure to state a claim and that the sale was a purely private remedy. Apao appealed to the Ninth Circuit. The Ninth Circuit affirmed the district court’s decision on the grounds that previous decisions of appellate courts upheld the constitutionality of similar non-judicial procedures. The Ninth Circuit held in Apao that the case of Charmicor v. Deaner, 572 F2nd 694 “was controlling” although the plaintiff in Apao attempted to distinguish it. In Charmicor, the plaintiff claimed that the statute offended due process by failing to provide a pre-sale hearing and that it offends civil rights statutes and the equal protection clause by discriminating against appellant’s shareholders, who are black. The court in Charmicor noted that the “complaint failed to state a claim for relief under the civil rights statutes, because the record was utterly barren of any facts or allegations that could support a claim under the equal protection clause”, the Ninth Circuit affirmed. The court in these cases made no reference to Several Supreme Court’s decisions which examined the nature of corporations created under an act of Congress and were content with the notion that Congress could adopt the local customs on debtor creditor relations without further analysis. C. CONGRESSIONALLY CONFERRED POWERS

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MUST BE CONSISTENT WITH THE STATUTES AND THE FEDERAL CONSTITUTION The power of Congress is vast, but not unlimited. Congress has the power to confer authority to provide rules and regulations on any department or officer of the government consistent with the statutes and the Constitution and “within the letter and spirit of the Constitution”. Boske v Comingore, 177 U.S. 459(1900) This includes the Office of Thrift Supervision and the Office of the Comptroller of the Currency. It follows that the powers, enumerated and incidental, conferred on National Banks as well as Federal Savings Associations/Banks must be consistent with the statutes and the Constitution of the United States and “with the letter and spirit of the Constitution”. The power to foreclose is an ‘incidental” power because it is necessary to effectuate the enumerated powers of a bank in providing residential mortgage lending. While the power to foreclose judicially is consistent with the Constitution the power to foreclose non judicially is not because it does not allow a hearing. Those powers not consistent with the Constitution are therefore--unconstitutional. In First National Bank of Bay City v. Fellows, 244 U.S. 416 pgs 419,420 (1917) CHIEF JUSTICE WHITE quoting Justice Marshall said : with respect to the means by which the powers it confers [to national banks] …, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consistent with the letter and spirit of the Constitution, are constitutional " [underline and bold added]

D. NATIONAL BANKS ARE PUBLIC NOT PRIVATE CORPORATIONS In Easton v. Iowa,188 U.S.220 (1903) the Court said of national banks:

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. . .[W]e cannot concur in the suggestions that national banks, in respect to the powers conferred upon them, are to be viewed as solely organized and operated for private gain. The Court in Easton went on to say at 188 U.S. 220 at p. 230 that the principles enunciated in McCullough v Maryland, 17 U.S. 316(1819), and in Osborn v Bank of United States, 22 U.S.738 (1824), though expressed in respect to banks incorporated directly by acts of Congress, were still applicable to the later and present system of national banks. The Court cited with approval the holding of the latter as expressed by Chief Justice Marshall: The bank is not considered as a private corporation whose principal object is individual trade and individual profit, but as a public corporation created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals or companies having no political connection with the government, is admitted, but the bank is not such an individual or company. It was not created for its own sake or for private purposes. It has never been supposed that Congress could create such a corporation.[underline added] The court in Easton goes on to say: 'National banks are instrumentalities of the Federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt by a state to define their duties or control the conduct of their affairs is absolutely void, wherever such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the Federal government to discharge the duties for the performance of which they were enacted. Our conclusions, upon principle and authority, are that Congress, having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks,

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and has the sole power to regulate and control the exercise of their operations…[bold added] In view of the holding in Osborn which Justice Marshall held that banks were public and not private bank corporations, which was approved and held applicable to later national bank corporations not directly created by Congress by the Supreme Court in Easton, why should we now consider national banks private corporations? And why not consider them “agencies of the Federal government” as referred to in Easton? And why should the same reasoning not apply to federal savings banks such as WACHOVIA MORTGAGE, fsb? In Osborn at p. 22 U.S. 823 the court said of these national banks: The charter of incorporation not only creates it, but gives it Every faculty which it possesses. The power to acquire rights of any description, to transact business of any description, to sue on those contracts, is given and measured by its charter, and that charter is a law of the United States. Take the case of a contract, which is put as the strongest against the Bank. . . [H]as this being a right to make this particular contract? .. . .[T]his question, too, depends entirely on a law of the United States [underline added] The court in Osborn at p. 823, made it clear that federally chartered corporations could “. . .acquire no right, make no contract, bring no suit, which is not authorized by a law of the United States. It is not only itself the mere creature of law, but all its actions and all its rights are dependent on the same law”.[underline and bold added] In Runyan v. Lessee of Coster, 39 U .S. 122 , p. 129 (1840) the court said that a corporation “possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence. That corporations created by statute must depend for their powers and the mode of exercising them, upon the true construction of the statute.

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… The corporation must show that the law of its creation gave it authority to make such contracts.” . [underline and bold added] Did the law of its’ creation (HOMEOWNER BANK ACT [HOLA] ) give Wachovia the right to make this contract with this particular provision? Or should the question be: Can the law of its creation give Wachovia the right to make this contract with this particular provision? In an excerpt from Shoshone Mining Co. v. Rutter, 177 U.S. 505,509,510 ,citing Osborn, the court said: A corporation has no powers and can incur no obligations except as authorized or provided for in its charter. Its power to do any act which it assumes to do, and its liability to any obligation which is sought to be cast upon it, depend upon its charter, and when such charter is given by one of the laws of the United States there is the primary question of the extent and meaning of that law;[underline and bold added] Can it then be said that the provision in a mortgage contract requiring a mortgagor to transfer his rights to a trustee with a power of sale for the nonpayment of a mortgage is authorized by the federal charter? Is this not the right to foreclose on an owner without resort to judicial process and a hearing? Is this not the right to deprive a person of procedural due process? We must then ask the question: Is the act of the national or federal savings bank in foreclosing nonjudicially within the scope of a law of Congress? Can the government by way of a federal charter authorize a right to a bank to do what it is forbidden to do itself? It is fundamentally clear that the government can impart no greater power through a charter than they possess themselves. The power to deny a person of procedural due process is denied to the government under the 5th Amendment and is equally denied to the banks. As John Locke said nearly 300 years ago: “… Nobody can transfer to another more power than he has in himself “ [John Locke,

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TWO TREATISE OF GOVERNMENT, BOOK II]

The courts in Osborn and

Shoshone show us that the conduct of banks in pursuit of non-judicial foreclosures must be done under the authority of the federal charter which is a “law of the United States” and therefore “under color of federal law”. E. CONGRESS CANNOT AUTHORIZE OR DELEGATE A RIGHT OR POWER THAT IT CANNOT RIGHTFULLY EXERCISE ITSELF If all the acts, rights and obligations of corporations with federal charters must be done under the authority of the federal charter and a law of the United States, including rights created in contract, how can Congress authorize a provision that it could not exercise itself? The provision can only be validated by what it represents and the constitutional implications it may give rise to. In United States v Grimaud, 220 U.S. 506 (1911) the Supreme Court decided that very issue and the court citing Justice Marshall at 220 US pg. 517 said. It will not be contended that Congress can delegate to the courts, or to any other tribunals, powers which are strictly and exclusively legislative. But Congress may certainly delegate to others powers which the legislature may rightfully exercise itself. [underline bold & italics added] A similar holding was made by the Ninth Circuit in Furman Crain et al., v. The First National Bank of Oregon, Portland et al, 324 F. 2d 532(1963) In that case the Court said: While Congress cannot delegate to private corporations or anyone else the power to enact laws, it may employ them in an administrative capacity to carry them into effect. Berman v Parker, 348 U.S. 26, 75 S. Ct, 98, 99 L.Ed 27 (1954) F. THE PROVISION IN A RESIDENTIAL MORTGAGE CONTRACT IN FAVOR OF LENDER ALLOWING A POWER OF SALE UPON DEFAULT IS AN

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ULTRA VIRES PROVISION AND NULL AND VOID As the Supreme Court said in Concord First Nat’l Bank v Hawkins 174 U.S. 364 p. 371: The doctrine of ultra vires, by which a contract made by a corporation beyond the scope of corporate powers is unlawful and void and will not support an action, rests as the Court has often recognized and affirmed, upon three distinct grounds.: the obligation of anyone contracting with a corporation to take notice of the legal limits of its powers, the interest of the stockholders not to be subject risks which they have never undertaken, and above all, the interest of the public that the corporation shall not transcend the powers conferred upon it by law.[bold added] The powers of a corporation are enumerated and incidental. Runyan at p. 129 supra. If Congress cannot confer the powers to Wachovia then the provision is ultra vires and void. II. THE LENDING FUNCTIONS OF OF FEDERAL S&L/FEDERAL SAVINGS BANKS ARE GOVERNMENTAL In Federal Land Bank v. Bismarck Co. of St. Paul, 314 U. S. 95 (1941) the court was faced with determining whether the lending functions were proprietary or governmental. The court said: The argument that the lending functions of the federal land banks are proprietary, rather than governmental, misconceives the nature of the federal government with respect to every function which it performs. The federal government is one of delegated powers, and from that it necessarily follows that any constitutional exercise of its delegated powers is governmental. Graves v. New York ex rel. O'Keefe, 306 U. S. 466, 306 U. S. 477. It also follows that, when Congress constitutionally creates a corporation through which the federal government lawfully acts, the activities of such corporation are governmental. (cites)

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As part of their general lending functions, the land banks are authorized to foreclose their mortgages and to purchase the real estate at the resulting sale. They are "instrumentalities of the federal government, engaged in the performance of an important governmental function."(cites) In Federal Land Bank v. Board of Kiowa County., 368 U.S. 146 the court said : "the Federal Government performs no 'proprietary' functions. If the enabling Act is constitutional and if the instrumentality's activity is within the authority granted by the Act, a governmental function is being performed." In Conference of Federal Savings and Loan Associations et al v. Alan L. Stein et al. 604 F.2d 1256 (9th Circuit) (1979) the court related the history of HOLA and the reason for its’ creation: The Home Owners' Loan Act of 1933, 12 U.S.C. §§ 1461 Et seq. (HOLA), was the result of congressional dissatisfaction with state law and practice in the financing of home construction. The result was HOLA, a radical and comprehensive response to the inadequacies of the existing state systems. A Federal savings and loan system was created. The Federal Home Loan Bank Board (the Bank Board) was created with extremely broad powers to promulgate rules and regulations. 12 U.S.C. § 1464(a) provides in part: …[T]he Board is authorized, under such rules and regulations as it may prescribe, to provide for the organization, incorporation, examination, operation, and regulation of associations to be known as 'Federal Savings and Loan Associations' * * * and to issue charters therefore, giving primary consideration to the best practices of local mutual thrift and home-financing institutions in the United States." It is well settled that the enabling Act, Home Owner Loan Act (HOLA) is constitutional . Pittman v. Home Owners' Loan Corp., 308 U. S. 21. Like federal land banks, the lending functions of federal

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savings assn’s/federal savings banks, such as Wachovia Mortgage fsb, a federal instrumentality , should be treated as governmental, even when the activity is in pursuit of foreclosure because foreclosure is an essential part of the “general lending functions” which the court in Bismarck held was “governmental” . Federal Land Bank v. Bismarck Co. of St. Paul, 314 U. S. 95, p. 102 (1941) A. GOVERNMENT CANNOT EVADE ITS MOST SOLEMN CONSTITUTIONAL OBLIGATIONS BY SIMPLY RESORTING TO THE CORPORATE FORM Can Congress divest itself of its identity with a corporation created and participated in for a public purpose sufficiently to allow the corporation to use a procedure that does not allow a hearing? That question was asked and answered in Lebron v National Railroad Passenger Corporation. 513 U.S. pgs 374, 375 when the court said: c) There is a long history of corporations created and participated in by the United States for the achievement of governmental objectives. Like some other Government corporations, Amtrak's authorizing statute provides that it "will not be an agency or establishment of the United States Government," [cite] (d) Although § 541 is assuredly dispositive of Amtrak's governmental status for purposes of matters within Congress's control--e. g., whether it is subject to statutes like the Administrative Procedure Act-and can even suffice to deprive it of all those inherent governmental powers and immunities that Congress has the power to eliminate-e. g., sovereign immunity from suit-it is not for Congress to make the final determination of Amtrak's status as a Government entity for purposes of determining the constitutional rights of citizens affected by its actions. The Constitution constrains governmental action by whatever instruments or in whatever modes that action may be taken…

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(e) Amtrak is an agency or instrumentality of the United States for the purpose of individual rights guaranteed against the Government by the Constitution. This conclusion accords with the public, judicial, and congressional understanding over the years that Government-created and -controlled corporations are part of the Government itself.(cites) ; A contrary holding would allow government to evade its most solemn constitutional obligations by simply resorting to the corporate form, Bank of United States v. Planters' Bank of Georgia, 9 Wheat. 904, 907, 908 (other cites). Like Amtrak, defendant is federal instrumentality and member in a banking system created for a public purpose and controlled by the director of The Office of Thrift Supervision. Like Amtrak it is not for Congress to make the final determination of defendant’s status as a government entity for purposes of determining the constitutional rights of citizens affected by its actions. Plaintiff Reuben Nieves is a citizen whose constitutional rights are affected by its actions when a non judicial foreclosure is exercised by a federally chartered corporation like defendant Wachovia Mortgage, fsb. To paraphrase an old saying, “that with great power comes great obligations.” This is no less true when the federal government, by way of Congress , confers enumerated and incidental powers on a corporation it creates for an important governmental function. It must follow that with the immunities from taxation and state laws that frustrate the activities of corporations for which an act of Congress was enacted, the constitutional obligations of the government must also attach. For as Justice Scalia said in Lebron at p. 399: But it does not contradict those statements to hold that a corporation is an agency of the Government, for purposes of the constitutional obligations of Government rather than the "privileges of the government," when the State has specifically created that corporation for the furtherance of governmental objectives, and not merely holds some shares but controls the operation of the corporation through its appointees.

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In this case control of the operations is exercised by the director of the Office of Thrift Supervision an independent federal regulatory agency vested with plenary authority to administer the Home Owners' Loan Act of 1933 (HOLA), The Director of the OTS is appointed by the President, by and with the advice and consent of the senate. (12 USC §1462c)

In Fidelity Fed. S. & L. v. De la Cuesta,

458 U.S. 141 (1982) at p. 161 the court said: The broad language of § 5(a) expresses no limits on the Board's authority to regulate the lending practices of federal savings and loans. As one court put it, "[I]t would have been difficult for Congress to give the Bank Board a broader mandate." [cites] And Congress' explicit delegation of jurisdiction over the "operation" of these institutions must empower the Board to issue regulations governing mortgage loan instruments. B. THE POWER TO FORECLOSE IS AN INCIDENTAL POWER OF THE NATIONAL BANKS AS WELL AS FEDERAL SAVINGS BANKS The history of national banking legislation has been "one of interpreting grants of both enumerated and incidental `powers' to national banks” as well as federal savings associations[which includes savings banks]. Bank of America et al v City of San Francisco et al 309 F.3d 551 (Ninth Circuit) (2002) Consider this hypothetical. The California legislature would makes a law that as a matter of public policy foreclosures of any kind will not be permitted on a homeowner’s primary residence. The OTS is charged with the supervision of the Home Owner Loan Act like the Office of the Controller of Currency is ”charged with supervision of the National Bank Act” NationsBank of N.C.N.A. v Variable Annuity Life Ins. Co. 513 U.S. 252, 256(1995) The OTS and the OCC would promulgate rules allowing the banks to foreclose on the homes that have defaulted and in concert with the banks claim that the power to foreclose was an incidental power of national banks and also federal savings banks and therefore would

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preempt state law. The State would challenge that decision in court. Both Acts are silent on the necessity of banks foreclosures to secure the residential property in the event of default. The Acts, however, do bestow upon banks the authority to exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as necessary to carry on the business of banking. . .”12 .S.C.§24(Seventh). The OTS authority to preempt state laws affecting its lending practices lies in 12 cfr §560.2. Because these sections are not explicit on the limits of “incidental powers”, an inquiry as to whether the NBA or HOLA would support the use of either one or both methods of foreclosures(Judicial foreclosures and/or non-judicial foreclosure) would be necessary. The holding in United States v. Grimaud, 220 U.S. 506(1911) would apply. The NBA or HOLA could authorize the former but not the latter because the government could not exercise the power to foreclose non-judicially. Otherwise, as Justice Scalia said in Lebron at p. 375, “...It would allow the government to evade its’ most solemn obligations by simply resorting to the corporate form”. C. WACHOVIA MORTGAGE FSB CAN BE CONSIDERED AN AGENCY OF THE GOVERNMENT In Acron Investments, Inc. et al v Federal Savings and Loan Insurance Corporation , 363 F.2nd 236 (9th Circuit, 1966) the court was given the task to determine if the Federal Savings & Loan Insurance Corporation (FSLIC) was an “agency”. After reviewing all the relevant code sections the court concluded that the corporation was an “agency” under 28 USC 451 because the control of the government over the corporation was more than custodial or incidental. In Acron at paragraphs 27 & 28 the court said: …[T]he Reviser's Note under 18 U.S.C. § 6 states that "The phrase `corporation in which the United States has a proprietary interest' is intended to include those governmental corporations in which stock is not actually issued, as well as those in which stock is owned by the United States. It excludes those corporations in which the interest of the Government is custodial or incidental." (Emphasis added.) 28

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…Since the control which Congress and the United States exercise over the Corporation is clearly more than "custodial or incidental," it would appear that the Corporation fits within the definition of "agency" of 28 U.S.C. § 451 and thus within the terms of 28 U.S.C. § 1345. [bold added] Under that test Wachovia Mortgage fsb is an “agency” and, if there is any doubt , the Supreme Court in Fidelity Fed. S. & L. v. De la Cuesta, 458 U.S. 141 (1982) at p. 161 settled the issue of the government control over the “operations” of saving and loan associations as being more than custodial or incidental when the court said: The broad language of § 5(a) expresses no limits on the Board's authority to regulate the lending practices of federal savings and loans. As one court put it, "[I]t would have been difficult for Congress to give the Bank Board a broader mandate." Glendale Federal Sav. & Loan Assn. v. Fox, 459 F.Supp. 903, 910 (CD Cal.1978), final summary judgment granted, 481 F.Supp. 616 (1979), order reversing and remanding, 663 F.2d 1078 (CA9 1981), cert. pending, No. 81-1192. And Congress' explicit delegation of jurisdiction over the "operation" of these institutions must empower the Board to issue regulations governing mortgage loan instruments.[bold & underline added]

D. WACHOVIA MORTGAGE FSB CANNOT PUT A PROVISION IN A CONTRACT TO PUT ITSELF BEYOND THE REACH OF THE 5TH AMENDMENT

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Wachovia Mortgage cannot put itself beyond the reach of the constitution and the 5th Amendment by putting a provision in a contract. Oliver Wendell Homes stated in HUDSON COUNTY WATER CO. v. Mc CARTER, 209 U. S. 349 (1908).”One whose rights, such as they are, are subject to state restriction cannot remove them from the power of the state by making a contract about them. But the contract, the execution of which is sought to be prevented here was illegal when it was made. “The contract will carry with it the infirmity of the subject matter” [cites] The constraints of the government pass on to Wachovia Mortgage, fsb, and cannot be avoided by putting a provision in a contract to put themselves beyond the restrictions of the 5th Amendment. Wachovia Mortgage fsb is restricted by its nature as a federally created corporation, created under an act of Congress from using a non judicial foreclosure. III. THE NINTH CIRCUIT DENIAL OF A PRELIMINARY INJUNCTION WAS AN ABUSE OF DISCRETION An abuse of discretion occurs when the decision of the court “ is based on erroneous interpretations of the law, or is clearly unreasonable, arbitrary or fanciful.” Cybor Corp. v. FAS Technologies, Inc., 128 F.3d 1448,1460(Fed. Cir. 1998) On or about August 20th 2009, plaintiff was served with a notice of trustee sale scheduled for September 10th, 2009. Plaintiff timely filed for an emergency preliminary injunction or stay pending appeal but was denied on September 9th, 2009, one day before the scheduled trustee sale. Justice Harry Pregerson dissented and stated he would have granted the preliminary injunction. The result was that defendant was enabled to deny plaintiff due process by going through with the

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trustee sale. The denial of the preliminary injunction therefore was an abuse of discretion. Since the whole point of plaintiff’s appeal from the district court’s dismissal was a determination of the constitutionality of a trustee’s sale, and all the briefs were submitted, it was unreasonable, arbitrary, or fanciful for the court to deny plaintiff relief before the court determined the constitutionality of the very procedure on appeal. The result would lead to plaintiff losing his home to a trustee’s sale and the court would have facilitated the denial of due process before the determination of the court of the constitutionality of the trustee sale. In Fuentes v. Shevin, 407 U.S. 67, 92 at pgs. 80-82 (1972) the court held that due process requires notice and an opportunity to be heard prior to the deprivation of a property interest. In Soc.sec.rep.ser. 80, et al., Plaintiffs-appellees, v. Margaret M. Heckler, Secretary of Health and Human Services,et al. , Ninth Circuit. 725 F.2d 1489 the court said: It is hornbook law that "[t]he general purpose of a preliminary injunction is to preserve the status quo pending final determination of the action after a full hearing." 7 J. Moore & J. Lucas, Moore's Federal Practice p 65.04 at 65-36 (2d ed. 1983). It is similarly well accepted that "[t]he status quo is the last uncontested status which preceded the pending controversy." Westinghouse Electric Corp. v. Free Sewing Machine Co., 256 F.2d 806, 808 (7th Cir.1958The purpose of a preliminary injunction is to preserve the status quo . But the status quo was not preserved, and the constitutional promise that no one would be deprived of property without due process was kicked to the curb. The defendant Wachovia Mortgage fsb and its’ attorney had constructive notice of the potential constitutional injury through plaintiff’s brief s and motion for preliminary injunction, but chose to proceed anyway. CONCLUSION

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In closing, there is no law within the scope of Congress that can authorize a federally chartered bank to foreclose on a homeowner and terminate his property rights without allowing a judicial hearing. That is the undeniable conclusion drawn from the Supreme Court’s decisions in Easton, Osborn, and Shoshone. Wachovia Mortgage fsb, incorporated under the Home Owner Loan Act (HOLA) to provide an important governmental function—residential mortgage lending, the operations of which are controlled by the Office of Thrift Supervision whose director is an appointee of the President of the United States. It follows that Wachovia Mortgage activities are governmental and the Constitutional obligations still attaches. It also follows that all the acts of Wachovia Mortgage fsb must be “consistent” with the act of its incorporation as well as the Constitution of the United States; that the powers enumerated and incidental must be “consistent” with the Home Owner Loan Act and the Constitution. And, since the power to foreclose is an incidental power it to must be “consistent” as well. The power to foreclose judicially is consistent but not the power to foreclose non judicially. Additionally, the denial of a preliminary injunction was an abuse of discretion by the Ninth Circuit court of appeal and plaintiff asks this court to declare it so. The massive foreclosures that have occurred and will continue to occur is the by-product of the reckless conduct of the lending industry whose underwriting standards were compromised by their own greed. If left to continue, it will crush the economy as it is crushing the spirit of this nation. This court should declare that federally chartered corporations , like Wachovia Mortgage fsb, be prohibited from using non judicial foreclosures which

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violates the 5th Amendment . Constitutionally conferred powers to a bank should not be used to produce an unconstitutional result.

In closing, there is no law within the scope of Congress that can authorize a federally chartered bank to foreclose on a homeowner and terminate his property rights without allowing a judicial hearing. That is the conclusion drawn from the Supreme Court’s decisions cited by plaintiff.. Wachovia Mortgage fsb, incorporated under the Home Owner Loan Act (HOLA) to provide an important governmental function—residential mortgage lending, the operations of which are controlled by the Office of Thrift Supervision whose director is an appointee of the President of the United States. This court should declare that federally chartered banks like Wachovia Mortgage fsb, are prohibited from using non judicial foreclosures. The powers conferred, enumerated and incidental to Wachovia Mortgage fsb are conferred by Congress under the authority of the Constitution. Constitutionally conferred powers to a bank should not be used to produce an unconstitutional result. This court should declare that the denial of plaintiff’s emergency motion for preliminary injunction was an abuse of discretion. Respectfully submitted,

________________

Date:___________,2009

Reuben Nieves

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Statutes

12 U.S.C §§ 1461 Et seq.The HOME OWNERS’ LOAN ACT...........................3 12 U.S.C. § 24...........................................................................................................4 12 U.S.C. § 38. The National Bank Act..................................................................3 Sec. 5[12 U.S.C. 1464] FEDERAL SAVINGS ASSOCIATION..........................3 Other Authorities

Furman Crain et al., v. The First National Bank of Oregon, Portland et al, 324 F. 2d 532(1963).....................................................................................................14 John Locke, TWO TREATISE OF GOVERNMENT, BOOK II......................14 John Locke, TWO TREATISE OF GOVERNMENT, BOOK II].....................14 Rules

12 U.S.C. 1254..........................................................................................................2 Regulations

12 cfr § 560...............................................................................................................3

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Constitutional Provisions

5th Amendment...........................................................................................................5 7th Amendment...........................................................................................................7

Table of Contents

PAGE PETITION FOR A WRIT OF CERTIORARI .........................................................1 OPINIONS BELOW ..............................................................................................2 STATEMENT OF THE CASE ................................................................................3 STATEMENT OF THE FACTS ..............................................................................4 SUMMARY OF ARGUMENT.................................................................................5 ARGUMENT ...........................................................................................................6

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I. BANK’S USE OF NON-JUDICIAL FORECLOSURE AGAINST A HOMEOWNER IS NOT WITHIN THE SCOPE OF A LAW OF CONGRESS . . 1 A. BANKS CAN BE A GOVERNMENTAL ACTOR IN VIOLATION OF THE 5TH AMENDMENT ........................................................................................ 2 B. A PARTY MUST STATE FACTS SUFFICIENT TO STATE A EITHER A 5th or 14th AMENDMENT DUE PROCESS CLAIM ....................................... 3 C. NATIONAL BANKS ARE PUBLIC NOT PRIVATE CORPORATIONS. 4 D. THE REASONING OF OSBORN AND EASTON AND SHOSHONE IS APPLICABLE TO FEDERAL SAVINGS BANKS ........................................... 5

TABLE OF CONTENT (CONTINUED) E. THE RIGHTS AND POWERS OF CORPORATIONS ARE CIRCUMSCRIBED BY THE LAW OF IT’S CREATION ............................ 6 F. CONGRESS CANNOT AUTHORIZE OR DELEGATE A RIGHT OR POWER THAT IT CANNOT RIGHTFULLY EXERCISE ITSELF .................... 1

G. THE PROVISION IN A RESIDENTIAL MORTGAGE CONTRACT IN FAVOR OF LENDER ALLOWING A POWER OF SALE UPON DEFAULT IS AN ULTRA VIRES PROVISION AND NULL AND VOID .......................... 2 II. THE LENDING FUNCTIONS OF FEDERAL S&L/FEDERAL SAVINGS BANKS ARE GOVERNMENTAL ............................................... 3 A. LENDING FUNCTIONS OF CORPORATIONS CREATED BY THE GOVERNMENT FOR A PUBLIC PURPOSE ARE GOVERNMENTAL........... 4 B. GOVERNMENT CANNOT EVADE THE MOST SOLEMN OBLIGATIONS IMPOSED IN THE CONSTITUTION BY SIMPLY RESORTING TO THE CORPORATE FORM .................................................. 5

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C. THE POWER TO FORECLOSE IS AN INCIDENTAL POWER OF THE NATIONAL BANKS AS WELL AS FEDERAL SAVINGS BANKS............ 6 CONCLUSION ....................................................................................................... 1

TABLE OF AUTHORITIES Cases Acron Investments, Inc. et al v Federal Savings and Loan Insurance Corporation , 363 F.2nd 236 (9th Circuit, 1966)....................................................20 Apao v. San Diego Home Loans, Inc.,324 F3d 1091 (2002)..................................9 Burton v Wilmington Parking Authority 365 U.S. 715(1961)................................7 Bank of America et al v City of San Francisco et al 309 F.3d 551 (2002)...........19 Boske v Comingore, 177 U.S. 459(1900)...............................................................10 Charmicor v. Deaner, 572 F2nd 694.......................................................................9 Concord First Nat’l Bank v Hawkins 174 U.S. 364 p. 371:..................................15

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Conference of Federal Savings and Loan Associations et al v. Alan L. Stein et al. 604 F.2d 1256 (9th Circuit) (1979)........................................................................16 Cybor Corp. v. FAS Technologies, Inc., 128 F.3d 1448,1460(Fed. Cir. 1998).....22 Easton v. Iowa,188 U.S.220 (1903).......................................................................11 Federal Land Bank v. Bismarck Co. of St. Paul, 314...........................................15 Fidelity Federal S & L Ass’n v Reginald De La Cuesta, 458 U.S. 141 (1982).1,21 First National Bank of Bay City v. Fellows, 244 U.S. 416 pgs 419,420 (1917)...10 Fuentes v. Shevin, 407 U.S. 67, 92 at pgs. 80-82 (1972)......................................22 Furman Crain et al., v. The First National Bank of Oregon, Portland et al, 324 F. 2d 532(1963).....................................................................................................14 Lebron v National Railroad Passenger Corporation. 513 U.S. pgs 374,............17 McCullough v Maryland, 17 U.S. 316(1819),.......................................................11 ” NationsBank of N.C.N.A. v Variable Annuity Life Ins. Co. 513 U.S. 252, 256(1995)..............................................................................................................20 Osborn v Bank of United States, 22 U.S.738(1824),.......................................11, 12 Pittman v. Home Owners' Loan Corp., 308 U. S. 21............................................17 Runyan v. Lessee of Coster, 39 U.S. 14 Pet. 122 (1840)......................................12 Shoshone Mining Co. v. Rutter, 177 U.S. 505,509,510.........................................13 Soc.sec.rep.ser. 80, et al., Plaintiffs-appellees, v. Margaret M. Heckler, Secretary of Health and Human Services,et al. , Ninth Circuit. - 725 F.2d 1489 ...............................................................................................................................22 United States v. Grimaud, 220 U.S. 506(1911.......................................................20 Statutes 12 U.S.C §§ 1461 Et seq.The HOME OWNERS’ LOAN ACT...........................3

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12 U.S.C. § 24...........................................................................................................4 12 U.S.C. § 38. The National Bank Act..................................................................3 12 U.S.C. 1254..........................................................................................................2 12 U.S.C. 1254(1)............................................................................................2, 5, 27 Sec. 5[12 U.S.C. 1464] FEDERAL SAVINGS ASSOCIATION..........................3 Other Authorities John Locke, TWO TREATISE OF GOVERNMENT, BOOK II].....................14

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