Bankers Life Co. v. Havel, 12239.

• Decision Date: 10 July 1942
• Docket Number: No. 12239.,12239.
• Citation: 129 F.2d 106
• Parties: BANKERS LIFE CO. v. HAVEL.
• Court: U.S. Court of Appeals — Eighth Circuit

129 F.2d 106 (1942)

BANKERS LIFE CO. v. HAVEL.

No. 12239.

Circuit Court of Appeals, Eighth Circuit.

July 10, 1942.

Emory M. Nourse, of Des Moines, Iowa, for appellant.

Louis J. Kehoe, of Washington, Iowa, for appellee.

Before SANBORN, THOMAS, and RIDDICK, Circuit Judges.

THOMAS, Circuit Judge.

The question presented on this appeal is whether a farmer-debtor having been adjudged bankrupt under § 75, sub. s of the Bankruptcy Act, 11 U.S.C.A. § 203, sub. s, is entitled as of right to a three-year stay of foreclosure proceedings against his farm when he has complied with all the orders of the court and the court has found that the emergency declared in the Act still exists.

Havel, the appellee, owned and operated an 80-acre farm situated in the southern judicial district of Iowa, on which the appellant Bankers Life Company held a past due mortgage for the principal sum of $8,000. In a foreclosure proceeding in the state court a certificate of purchase at sheriff's sale was issued to appellant June 23, 1939, upon a judgment of $10,774.64. Under Iowa law the debtor had a right of redemption which would not expire until the end of one year thereafter. Code of Iowa, 1939, § 11774. On March 5, 1940, he filed his petition for relief under § 75 of the Act. Failing to secure a composition with his creditors, after amendment to his petition he was adjudicated a bankrupt under § 75, sub. s. The farm was appraised at $8,000 on September 3, 1940, and on the following day an order was entered staying all pending proceedings for a period of three years, and the terms of rental were fixed by the Conciliation Commissioner. On appellant's application the farm was reappraised in August, 1941, at $9,600.

On September 22, 1941, appellant filed its application for a termination of the stay order to which appellee filed a resistance. The grounds stated in the application for termination of the stay were (1) that the debtor had failed to redeem the farm at its appraised value; (2) that his financial condition is beyond all reasonable hope of rehabilitation, and (3) that in the locality where the farm is situated the emergency defined in the Act had ceased to exist.

Upon a hearing before the Commissioner the application was denied; and the Commissioner found (1) that even if the debtor were required by the Act to redeem within a reasonable time, a reasonable time had not elapsed; (2) that the emergency still exists; and (3) that the debtor having complied with all the orders of the court the appellant does not have the right under the Act to have the stay order terminated, even though, as found in this instance, the evidence furnishes no reasonable hope or expectation that the debtor will be able to refinance or rehabilitate himself within the three-year period.

Upon review the court approved and confirmed the Commissioner's findings and order, and this appeal followed.

The appellant contends that the court erred in holding (1) that the emergency defined in the Act has not ceased to exist in the locality where the farm is situated; (2) that a reasonable time for redemption had not elapsed after the entry of the stay order; and (3) that the debtor is not required to redeem, if he complies with all the orders of the court, until the end of the three-year period.

The statute, supra, commits to the bankruptcy court the power to determine when the emergency defined in the Act ceases to exist. Paragraph (6) of subsection (s) reads: "This title...