Bank of America Nat. Trust & Savings Ass'n v. Cuccia
Decision Date | 30 December 1937 |
Docket Number | No. 8187.,8187. |
Citation | 93 F.2d 754 |
Court | U.S. Court of Appeals — Ninth Circuit |
Parties | BANK OF AMERICA NAT. TRUST & SAVINGS ASS'N v. CUCCIA. |
Louis Ferrari, of San Francisco, Cal., and Edmund Nelson and Hugo A. Steinmeyer, both of Los Angeles, Cal., for appellant.
Paul Leiter, of Los Angeles, Cal., for appellee.
Before DENMAN, MATHEWS, and HANEY, Circuit Judges.
At the former hearing, counsel did not discuss the question whether the orders sought to be reviewed were orders made in a controversy arising in bankruptcy, within the meaning of section 24a of the Bankruptcy Act, as amended, 11 U.S.C.A. § 47 (a), or were orders made in a proceeding in bankruptcy, within the meaning of section 24b of the act, as amended, 11 U.S.C. A. § 47 (b). The question was before us and had to be decided. We held, 9 Cir., 90 F.2d 100, 102, that the orders were made in a proceeding, not in a controversy, and that, therefore, they were not appealable under section 24a. By its petition for rehearing, appellant challenged the correctness of our ruling. Desiring argument on the question, we granted a rehearing.
As heretofore stated, 90 F.2d 100, 101, the proceeding commenced by appellee on August 4, 1934, was dismissed on October 14, 1935. Thereafter, on October 17, 1935, appellant purchased at foreclosure sale a tract of land which appellee had, prior to August 4, 1934, conveyed to a trustee, in trust, to secure payment of a promissory note, held by appellant, for $11,850, with interest. 90 F.2d 100, 101, footnote 3. See, also, Bank of America National Trust & Savings Ass'n v. Adair, 9 Cir., 90 F.2d 750, 751. After the proceeds of the sale were credited on appellee's note, there still remained an unpaid balance of $4,934.68. 90 F.2d 750, 752.
Notwithstanding appellant's purchase of the above-mentioned land, appellee continued in possession thereof. To obtain possession, appellant on October 30, 1935, commenced an action in a state court of California, which on December 2, 1935, entered its judgment, ordering and adjudging that appellee was guilty of unlawful detainer, that appellant be "restored" to possession of the land, and that execution issue as provided by law. Execution did issue, but nothing came of it. Appellee remained and still remains in possession of the land.
Appellee's petition asking leave to file a new petition under section 75 of the Bankruptcy Act, as amended, 11 U.S.C.A. § 203, was filed on March 16, 1936. It stated, in substance, that, since the foreclosure sale above referred to, appellee had discovered "new facts" which he believed would justify the court in granting him leave to file a new petition under section 75; namely, that the Federal Land Bank of Berkeley would lend him $7,500 on the above-mentioned land; that appellant had received for a right of way through the land approximately $3,000, and for crops raised on it in 1935 approximately $1,600; that appellee was entitled to both sums so received by appellant; that, if permitted to file a new petition, appellee would be in a position to make his creditors, including appellant, a composition offer of approximately 99 per cent. of the total indebtedness then or theretofore owing by appellee, including what he owed appellant before, as well as after, the foreclosure sale; that appellee was informed and believed that such composition offer would be satisfactory to his creditors, including appellant, but that appellant had obtained a judgment — meaning, evidently, the state court judgment above referred to — authorizing appellant to dispossess appellee and remove him from the land on March 16, 1936; that appellee's new petition, if permitted to be filed, could not be heard before April 6, 1936; and that, unless, pending such hearing, appellee was granted relief from the effect of the judgment, his composition offer would be of no avail, and he would suffer great and irreparable injury.
The petition prayed:
Thereupon, on March 16, 1936, the District Court made an ex parte order reading as follows:
Although it contained the word "enjoined," this order, obviously, was not an injunction, nor was it an order granting an injunction, permanent or interlocutory. It was a temporary restraining order, incidental to and constituting part of an order reinstating — or, as appellant contends, granting leave to commence — a proceeding in bankruptcy. Whether this was a reinstatement of an old proceeding or the commencement of a new one is immaterial.
Appellee's new petition was filed on March 16, 1936. It stated that appellee was engaged primarily in farming operations, that he was insolvent or unable to meet his debts as they matured, and that he desired to effect a composition under section 75 of the Bankruptcy Act, as amended. It is apparent, however, from both petitions — the new petition and the petition asking leave to file it — that what appellee sought was not merely a composition of his then existing debts, but a reconveyance of the land which appellant had purchased at foreclosure sale. This he proposed to effect, not by compulsion, or as a matter of right, but by negotiation. He did not in either of his petitions question appellant's title to the land or its right to immediate possession thereof, nor did he claim that he himself had any such right or title. What he asked was that his admittedly unlawful possession be not interfered with until it could be determined whether his creditors, including appellant, would or would not accept his proposal.
Appellant's motion to vacate the restraining order was filed on March 25, 1936. It stated that appellant was and had been since October 17, 1935, the owner and entitled to possession of the above-mentioned land; that it had obtained the state court judgment above referred to; that the land was planted to grape vines, which required cultivation, pruning, and care; and that, unless appellant was able to secure possession of the land, the vines would deteriorate, and appellant would suffer loss by reason thereof. Whether such loss would occur before appellee's new petition could be heard or his composition proposal submitted, the motion did not state; nor did it state whether appellant would or would not accept a composition proposal.
The motion to vacate the restraining order was heard and denied, without prejudice, on March 30, 1936. The District Judge, in denying the motion, stated from the bench:
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