135 F.2d 447 (8th Cir. 1943), 12401, Rait v. Federal Land Bank of St. Paul

Docket Nº:12401, 12452.
Citation:135 F.2d 447
Party Name:RAIT v. FEDERAL LAND BANK OF ST. PAUL et al.
Case Date:April 07, 1943
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 447

135 F.2d 447 (8th Cir. 1943)

RAIT

v.

FEDERAL LAND BANK OF ST. PAUL et al.

Nos. 12401, 12452.

United States Court of Appeals, Eighth Circuit.

April 7, 1943

Motion to Modify Denied May 24, 1943.

Page 448

[Copyrighted Material Omitted]

Page 449

William Lemke, of Fargo N.D. (E. A. Tannas, of Crosby, N.D., on the brief), for appellant.

John F. Ford, of St. Paul, Minn. (Robert J. Barry and A. L. Quilling, both of St. Paul, Minn., on the brief), for appellees.

Before SANBORN, WOODROUGH, and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

In a proceeding under section 75, sub. s, of the Bankruptcy Act, 11 U.S.C.A. § 203, sub. s, the farmer-debtor's land was appraised at $2, 160, which amount he paid into the court two months later, for the purpose of making a redemption. On request of the first and second mortgagees, whose liens against the property totalled over $11, 000, the conciliation commissioner held a hearing, and he similarly fixed the value at $2, 160. The secured creditors then filed a petition for review, and the district judge, on a review of the record, held that the evidence did not support the finding

Page 450

of the conciliation commissioner and that the latter's order should be modified to fix the value of the property at $4, 800. The farmer-debtor has appealed from the order of the district judge. 1

One of the contentions made here is that, where there has been a reappraisal of the property, in a proceeding under section 75, sub. s, or where the conciliation commissioner has fixed the value after a hearing, the district judge is without jurisdiction to review the valuation. We have previously assumed that the right to review an order of the conciliation commissioner approving a reappraisal or fixing the value of the property after a hearing has always existed under the general provisions of subsection c of section 39 of the Bankruptcy Act, 11 U.S.C.A. § 67, sub. c. 2 Compare Equitable Life Assur. Soc. of United States v. Carmody, 8 Cir., 131 F.2d 318. If there has heretofore been any real question in the matter, which we have failed to recognize, it has not been sufficiently settled, we believe, against appellant's contention, by the expressions in Pfister v. Northern Illinois Finance Corporation, 317 U.S. 144, 63 S.Ct. 133, 136, 87 L.Ed.-- . See also Nalder v. Federal Land Bank of Berkeley, 10 Cir., 131 F.2d 74; Donald v. Bankers Life Co., 5 Cir., 107 F.2d 810. We accordingly hold that, in a proceeding under section 75, sub. s, of the Bankruptcy Act, an order of the conciliation commissioner approving a reappraisal made of the farmer-debtor's property, or fixing the value of the property after a hearing, properly is subject to review by the district judge, under the general provisions of section 38, sub. c, of the Act

Like any finding of a referee in bankruptcy, however, a reappraisal approval by the conciliation commissioner or the value fixed after a hearing must not lightly be disturbed and should be set aside only when it is clearly erroneous. Order 47, General Orders in Bankruptcy, as effective February 13, 1939, 11 U.S.C.A.following section 53. The district judge manifestly must exercise a sound and conscientious restraint and should proceed with necessary regard for the restriction which Order 47 has placed upon his reviewing power. Equitable Life Assur. Soc. of United States v. Carmody, 8 Cir., 131 F.2d 318, 322. But where, from a review of the record and from such other proceedings as may be had before him, the district judge, on the basis of the principles referred to, is clearly convinced that the conciliation commissioner in such a situation has acted arbitrarily and without proper regard for the evidence, or that he has otherwise plainly and prejudicially erred, there can be no question as to his right to modify the conciliation commissioner's report or order, or to set aside and receive further evidence, or to recommit the matter to the conciliation commissioner with instructions. See Order 47, General Orders in Bankruptcy, 11 U.S.C.A.following section 53.

In the present situation, the secured creditors' petition for review alleged that the conciliation commissioner had erred in fixing a...

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