Wilson v. Louisville Joint Stock Land Bank of Louisville

105 F.2d 302, 1939 U.S. App. LEXIS 3315
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 12, 1939
DocketNos. 6897, 6898
StatusPublished

This text of 105 F.2d 302 (Wilson v. Louisville Joint Stock Land Bank of Louisville) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wilson v. Louisville Joint Stock Land Bank of Louisville, 105 F.2d 302, 1939 U.S. App. LEXIS 3315 (7th Cir. 1939).

Opinion

SPARKS, Circuit Judge.

Appellant, a farmer-debtor, appeals from two orders of the District Court in a proceeding under section 75 of the Bankruptcy Act, 11 U.S.C.A. § 203:

1. Entered January 14, 1939, directing the appointment of a trustee of his estate; ordering the surrender of possession of his farm; dissolving an injunction there[303]*303to fore entered to prevent the sheriff from delivering his deed to the farm; and directing the marshal to remove the debtor from the property and put the purchaser in possession upon presentation of the deed to the property.

2. Entered January 19, 1939, denying appellant’s petition for appraisement of his farm and for an injunction to restrain the sheriff from executing and delivering the deed to it and removing him from it.

Foreclosure proceedings were instituted by appellee in July, 1932, on the real estate here involved, default having occurred in payments due under the mortgage January 1, 1930. Because of change of venue and change of Judge, the foreclosure proceedings were so delayed that decree was not entered until April, 1936, followed by sale of the property May 23, 1936. At the same time a mechanic’s lien was foreclosed by cross complaint filed in the mortgage foreclosure proceedings, and to avoid removal of the chicken house there involved from the premises, appellee settled with the lienee by payment of $500. During the pendency of these proceedings appellant had instituted proceedings under section 75 which were ultimately dismissed. On May 20, 1937, appellant filed the debtor proceedings here involved, and obtained an injunction restraining the sheriff from executing and delivering the deed. On August 26, 1937, the conciliation commissioner entered an order providing for the rental of the eighty-acre farm to the debt- or for $250 for the period ending December 1, 1938. The rental was to'be paid in three installments of $50 on or before November 1, 1937, $75 on or before May 1, 1938, and $125 on or before November 1, 1938. The order further provided that the debtor should work the farm in proper manner, in accordance with the practices of good husbandry; that no waste should be committed; that the buildings, fences' and other improvements should be kept in as good a state of repair as they then were in; appointed a trustee who was to collect the rents from the debtor who was permitted to occupy the premises; and stayed all proceedings against the debtor during such time as he complied with all the provisions of the order.

On November 15, 1938, fifteen days after the final installment of rent was due, appellee filed its petition before the commissioner setting up, inter alia, the facts that appellant had paid only $60 of the total of $250 rent provided by the order under which he was permitted to remain in possession of the farm; that he had paid no taxes since 1930; that appellee had to keep up insurance on the improvements since the debtor failed to do so; that the debtor did not have the necessary equipment or stock with which to farm the land properly and had cultivated only a small part of it, producing practically nothing on it; and that he would not be able to refinance his debt within three years, nor had his proceeding been filed in good faith, but only for the purpose of retaining possession of the real estate. Appellee also showed that the rent actually paid during the two farming seasons included in the period was less than the amount of taxes levied against the land for the two years. Appellee therefore prayed that the real estate be released from the bankruptcy proceeding and that the debtor be granted no further right to occupy the land after December 1, 1938 (the expiration of the period of the lease of August 26, 1937).

By the time of the hearing before the commissioner on appellee’s petition, the debtor had paid an additional $90 on the rent, leaving a balance due and unpaid of $100 which remained due and unpaid until the day before hearing in this court, April 21, 1939. The commissioner found that the debtor had made no repairs or improvements on the property, paid no taxes, had only planted a few acres of the land in corn, and that not until July, so that it grew only about half the normal height and made no ears; that the debtor would not be able to rehabilitate himself and would not be able to repurchase the land. He therefore recommended that the debt- or surrender possession of the property immediately, and that appellee cancel its claim for the balance of $100 due on the rent for any work done on the place; that a successor trustee be appointed and the estate be administered under the Bankruptcy Act.

Upon hearing on appellant’s petition for review of the report of the commissioner, a continuance for which was prayed by appellant and denied by the court, the court adopted the recommendations of the commissioner and entered the order from which the first appeal is taken, that the debtor surrender possession, and the sheriff proceed with the execution and delivery of the deed and the marshal with the removal of the debtor from the premises. A few [304]*304days later, the debtor filed his’ petition for appraisement of the property and an order restraining the sheriff from executing and delivering the deed, and the marshal from removing him from the premises, and that the court proceed with the administration of the proceeding in bankruptcy, all of which was denied by the court by the second order from which appeal was taken-.

Upon hearing of the cause by this court on April 21, appellant sought to present to us certain affidavits to prove that on April 20, $100 had been tendered to the commissioner in payment of the final installment on the rent due November 1, 1938, for. the period ending December 1, 1938. The $100 constituted part of the proceeds of a check for $103.76 issued to appellant for soil conservation. Appellant had previously attempted to assign his claim to this check to the commissioner, but the Conservation Committee had refused to recognize the assignment for the reason that it was contrary to regulations promulgated under the Act which provided for assignment of such claims only to pay or secure an indebtedness incurred in financing a crop in 1938, and not for any preexisting indebtedness, quoting from N. C. R. — 201 for the 1938 Agricultural Conservation Program.

We are of opinion that the tender on April 20, 1939, of payment of rent due November 1, 1938, for a period ending December 1, 1938, in no way militates against the validity of an order entered January 14, terminating the debtor proceeding for failure to comply with the terms and conditions of the order of August, 1937, under which the debtor was permitted to remain in possession o’f the foreclosed premises. Not only was the full amount of rent not paid, which failure cannot be excused by tender almost six months after it became due, but also, there was convincing evidence that the debtor was not farming the land in a manner conducive to good husbandry, nor was he making any attempt to keep improvements on the farm in any kind of repair, as was also required by the order under which he retained possession.

The record also discloses convincing evidence that the debtor was not a good subject for rehabilitation, and that there was no likelihood that he would be in any better financial position at the end of three years than’he was when the order was entered. Appellant’s conception of section, 75 (s) of the Bankruptcy Act, 11 U.S.C.A. § 203 (s), appears to be that it confers upon a farmer-debtor an absolute right to retain possession of his farm until March 4, 1940.

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Related

Wilson v. Alliance Life Ins. Co.
102 F.2d 365 (Fifth Circuit, 1939)
In Re Henderson
100 F.2d 820 (Fifth Circuit, 1938)
Barton v. Gehman
91 F.2d 548 (Third Circuit, 1937)
Cowherd v. Phœnix Joint Stock Land Bank
99 F.2d 225 (Eighth Circuit, 1938)

Cite This Page — Counsel Stack

Bluebook (online)
105 F.2d 302, 1939 U.S. App. LEXIS 3315, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wilson-v-louisville-joint-stock-land-bank-of-louisville-ca7-1939.