Wright v. Vinton Branch of Mountain Trust Bank

85 F.2d 973, 1936 U.S. App. LEXIS 4296
CourtCourt of Appeals for the Fourth Circuit
DecidedOctober 6, 1936
DocketNos. 4016, 4019, 4023, 4036, 4051, 4069
StatusPublished
Cited by6 cases

This text of 85 F.2d 973 (Wright v. Vinton Branch of Mountain Trust Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wright v. Vinton Branch of Mountain Trust Bank, 85 F.2d 973, 1936 U.S. App. LEXIS 4296 (4th Cir. 1936).

Opinion

PARKER, Circuit Judge.

These are six appeals from the same district in cases wherein relief was sought under the amended Frazier-Lemke Act (Bankr.Act § 75(s), Act Aug. 28, 1935, § 6, 49 Stat. 942, 943, 11 U.S.C.A. § 203 (s). The learned judge below, for reasons set forth in his opinion in Re Sherman (D.C.) 12 F.Supp. 297, denied the relief prayed in each of the cases on the ground that the act was violative of rights guaranteed by the Constitution, and the debtors have appealed. The appeals were heard together in this court and together they present but one question, i. e. the constitutional validity of the amended Frazier-Lemke Act.

In Louisville Bank v. Radford, 295 U.S. 555, 55 S.Ct. 854, 865, 79 L.Ed. 1593, 97 A.L.R. 1106, the original Frazier-Lemke Act (Bankr.Act § 75 (s) was held violative of the Fifth Amendment to the Constitution of the United States, in that it deprived the holder of an antecedent Kentucky mortgage of the following rights with respect to his security, viz.:

“(1) The right to retain the lien until the indebtedness thereby secured is paid.
“(2) The right to realize upon the security by a judicial public sale.
“(3) The right to determine when such sale shall be held, subject only to the discretion of the court.
“(4) The right to protect its interest in the property by bidding at such sale whenever held, and thus to assure having the mortgaged property devoted primarily to the satisfaction of the debt, either through receipt of the proceeds of a fair competitive sale or by taking the property itself.
“(5) The right to control meanwhile the property during the period of default, subject only to the discretion of the court, and to have the rents and profits collected by a receiver for the satisfaction of the debt.”

The amended act by its terms applies to existing mortgages as well as to those subsequently executed and those here involved were in existence at the time of its passage. As pointed out by the learned judge below, the rights of the secured creditor under the laws of Virginia are not materially different, for the purposes of this inquiry,‘from the rights recognized by the law of Kentucky (Code Va. § 5167); and we agree with him that these rights, as specified in paragraphs 3 and 5 of the above quotation, are violated by the amended act, i. e. the right to determine when the mortgage sale shall be held, subject only to the discretion of the court, and the right to control meanwhile the property; subject only to the discretion of the court, and to have the rents and profits collected by a receiver for the satisfaction of the debt.

The amended act provides that any farmer who fails to obtain the acceptance of a majority in number and amount of all creditors whose claims are affected by a composition or extension proposal, or who feels aggrieved by the composition or extension, may ask that he be adjudged a bankrupt, that his property be appraised, that the exemptions allowed by state law be' allotted to him, and that he be allowed to retain possession under the supervision and control of the court of the remainder of his property. The act then prescribes the duty of the court in the premises in subsections (1), (2), and (3), of section 75 (s), as amended, which are the ones material to the inquiry before us, and which for convenience of reference are inserted in the margin.

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Bluebook (online)
85 F.2d 973, 1936 U.S. App. LEXIS 4296, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wright-v-vinton-branch-of-mountain-trust-bank-ca4-1936.