Thank You For Submiting Feedback!
The Wheat Crop Insurance Regulations, promulgated pursuant to the Federal Crop Insurance Act, 7 U.S.C.S. § 1503, are binding on all who seek to come within the Act, regardless of actual knowledge of what is in the Regulations or of the hardship resulting from innocent ignorance.
Petitioner Federal Crop Insurance Corporation was created by the Federal Crop Insurance Act, 7 U.S.C.S. § 1503, as an agency of the Department of Agriculture. The Corporation promulgated wheat crop insurance regulations. Respondent farmers applied locally for insurance under the Act, after disclosing the facts to and receiving the assurance of local agents of the Corporation that the crop was insurable. Neither the farmers nor the local agents knew that under a duly promulgated regulation of the Insurance Corporation, the crop was not insurable. When the farmers’ crop was destroyed, the Corporation failed to pay the farmers for the loss. The farmers filed suit to recover, and the lower courts affirmed a jury verdict in the farmers' favor. Petitioner Corporation sought review of the decision.
Could the farmers recover under the insurance obtained from the petitioner corporation, notwithstanding the existence of a duly promulgated regulation of the Insurance Corporation that characterized the crop as uninsurable?
The U.S. Supreme Court reversed, holding that the controlling regulation precluded insurance for the farmers' crop. When the farmers entered into an arrangement with the government, they took the risk of having accurately ascertained the rules and regulations.