Bacon v. Federal Land Bank of Columbia

109 F.2d 285, 1940 U.S. App. LEXIS 3889
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 22, 1940
DocketNo. 9094
StatusPublished
Cited by5 cases

This text of 109 F.2d 285 (Bacon v. Federal Land Bank of Columbia) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bacon v. Federal Land Bank of Columbia, 109 F.2d 285, 1940 U.S. App. LEXIS 3889 (5th Cir. 1940).

Opinion

SIBLEY, Circuit Judge.

The judgment appealed from is one dated January 5, 1939, entered on a -petition for relief as a farmer filed under Bankruptcy Act, Sect. 75, 11 U.S.C.A. § 203, which reinstated the withdrawn petition, held it not to be within the purview of Section 75, and disapproved and dismissed it. A brief recital of uncontested facts will help to an understanding of the points made.

Mrs. Lucia Bacon, wife of R. J. Bacon, died intestate, domiciled in Georgia, April 29, 1933. There was no administration on her estate in the Court of Ordinary. On April 9, 1934, her heirs at law, some being of age, and some minors represented by their father R. J. Bacon, brought a bill in a State court to enjoin a pending proceeding to partition three hundred acres of land in which Mrs. Bacon’s estate had a one-seventh interest, and to set apart and administer her share to her heirs, and to this end a receiver was prayed. R. J. Bacon was “appointed receiver for said realty, to be governed by the orders of this court.” On March 25, 1938, R. J. Bacon as receiver petitioned this court to construe and order the receivership to extend to the full administration of the estate of Mrs. Bacon, alleging that at her death she owned personal property, including all the stock of a Florida corporation, Baconton Land Company, which was dissolved in 1935, and its assets remaining were certain livestock, a $5,000 second mortgage on the Baconton Plantation in Georgia, and thirty acres adjoining; that the family lived on the said plantation, and Mrs. Bacon had farmed it during her life, and Baconton Land Company did after her death, and the receiver was continuing the farming operations, for which he prayed the court’s approval and an order to continue. The court on the same day made an ex parte order which stated that Bacon had been appointed receiver with the intention that he be Mrs. Bacon’s personal representative, and he having so acted, the order of appointment was enlarged to include all the assets of Mrs. Bacon and the assets of Baconton Land Company, and the farming operations were ordered to continue until further order. On the same day Bacon as receiver petitioned the State court, stating that he was farming seventy-five acres, on which Mrs. Bacon at her death was as a farmer raising poultry and livestock, and it was a part of the Baconton Plantation which was all subject to a first mortgage thereon, under a power in which a sale was advertised by the mortgagee Federal Land Bank of Co[287]*287lumbia, and the prayer was for authority to apply for relief under Section 75 of the Bankruptcy Act. The requested authority was granted.

On March 30, 1938, Bacon as receiver, exhibiting these orders and claiming to be the “personal representative” of Mrs. Lucia Bacon, petitioned the bankruptcy court for relief under Section 75, asserting that Mrs. Bacon at her death was a farmer engaged primarily in the production of poultry and livestock from which her principal income was derived, that he as receiver was still carrying on the operations by raising livestock, and desired to effect a "composition or extension of time to pay off the securities which are a lien on the property and equities of the estate as shown in Exhibit D, and the debts of said estate, under Section 75 of the Bankruptcy Act.” The annexed schedules showed as assets a town lot, thirty acres of land, second mortgage for $5,000 on the Baconton Plantation with possession as mortgagee of seventy-five acres, thirty sheep, fifteen cattle, five turkeys, a cream separator, and a nine year old Buick automobile. Exhibit D named as creditors Federal Land Bank of Columbia, having a claim of $24,000, secured by title to the Baconton Plantation, to which Mrs. Bacon’s equities, derived from Baconton Land Company, “are subject but she did not assume the debt”; a debt for purchase money of the cream separator of $20 due by Baconton Land Company; an open account of $26 owed by Mrs. Bacon, and some taxes due on town lot and personal property.

On March 31, 1938, the supervising Conciliation Commissioner reported that at the death of Mrs. Bacon in 1933, raising poultry and livestock was not farming as defined by Section 75, and she was not a farmer, and that a court receiver farming under the orders of an equity court was not a farmer under the Act, and recommended disapproval of the petition. Before the judge acted on this report, on April 4, 1938, Bacon “withdrew and dismissed” his case, with the approval of the judge, but we find no order signed by the judge. The dismissal was pursuant to an agreement made with the attorneys for the Federal Land Bank that this should be done, that the Bank should sell and buy in the land, and should resell it on favorable terms to a person to be named by Bacon. The land was so sold and bought in, but the directors of the Bank repudiated the whole agreement and brought a suit in equity to annul the agreement, to set the sale aside, and restore the status. On a trial this conclusion was announced, but the court thinking the reinstatement of the bankruptcy petition was necessary to restore the status, postponed entering a decree till that should be done. The same judge then, the parties being present, took up the bankruptcy case. The Federal. Land Bank had filed a motion to disapprove and dismiss the debtor’s petition. Bacon as receiver moved to amend it by alleging that besides poultry and livestock “pecans, peanuts, cotton, corn and general farm produce” were grown by Mrs. Bacon through her solely owned corporation, Ba- ’ conton Land Company; and by alleging the sheep on hand- were worth $100 and the cattle $500, and the cream separator $30, certain books $500, turkeys $12, and the automobile $200, and he moved to dismiss the Bank’s motion. During the hearing on these motions Bacon produced an order of the State court dated September 30, 1938, ratifying the receiver’s dismissal of the debtor’s petition and cancelling his authority to file it, on the basis of the agreement with the Federal Land Bank touching the lands. Bacon thereupon contended the bankruptcy court had no authority to reinstate. The district judge, however, held his approval of the dismissal was gotten on a misapprehension as to there being a valid agreement with the Bank, that he had in the equity case decided there was no valid agreement, so he entered an order reinstating the petition to its status as of the date of dismissal, and then considering the petition as amended, he held it not within the purview of Section 75, and again dismissed it. A decree was after-wards entered in the equity case cancelling the agreement with the attorneys of the Bank and the sale under it.

The appellant argues for the maintaining of the agreement with the Bank and against the right of the equity court to cancel it and to order the bankruptcy court to reinstate, especially in view of the custody of the assets through a receiver by the State court. Since the decree in equity is not appealed from we have no concern with its merits. The court apparently had jurisdiction of the parties and subject matter, no question appears to have been raised about the propriety of suing the receiver without his court’s consent, but if raised and overruled the ruling is not here for review. The equity court did not assume to instruct the-[288]*288bankruptcy court to reinstate, but only suspended its decree that the bankruptcy court might deal with the bankruptcy case in view of the developments. Only the action of the bankruptcy court is here on appeal.

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Bluebook (online)
109 F.2d 285, 1940 U.S. App. LEXIS 3889, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bacon-v-federal-land-bank-of-columbia-ca5-1940.