Beecher v. Federal Land Bank of Spokane, Wash., 10391.

• Decision Date: 30 December 1944
• Docket Number: No. 10391.,10391.
• Citation: 146 F.2d 934
• Parties: BEECHER v. FEDERAL LAND BANK OF SPOKANE, WASH., et al.
• Court: U.S. Court of Appeals — Ninth Circuit

146 F.2d 934 (1944)

BEECHER v. FEDERAL LAND BANK OF SPOKANE, WASH., et al.

No. 10391.

Circuit Court of Appeals, Ninth Circuit.

December 30, 1944.

Charles A. Christin, of San Francisco, Cal., for appellant.

Henry R. Newton, of Spokane, Wash., for appellee Federal Land Bank of Spokane.

C. D. Randall, of Spokane, Wash., and Herman Howe, of Seattle, Wash., for appellee Leavenworth State Bank.

Before DENMAN, STEPHENS, and HEALY, Circuit Judges.

DENMAN, Circuit Judge.

Beecher, a farmer debtor, appeals from eleven orders made in his proceeding under Section 75, sub. s, of the Bankruptcy Act, 11 U.S.C.A. § 203, sub. s.

After failure to secure the assent of his creditors to an offer of composition, S. P. Beecher, farmer debtor and here the appellant, filed an amended petition under section 75, sub. s, and was adjudicated a bankrupt. On March 4, 1940, the proceedings were referred to John Spiller, Conciliation Commissioner for Chelan County, Washington. The numerous appeals and motions to be considered in this cause arise out of subsequent proceedings before the commissioner and the district court.

Pursuant to the procedure laid down by the Act, the commissioner on appellant's motion filed March 30, 1940, entered an order appointing three appraisers. These qualified, appraised the property scheduled, and filed an appraisal report. The report showed that bankrupt owned an orchard property appraised at nine thousand dollars, about eight hundred acres of pasture appraised at seven hundred and fifty dollars, and some personal property.

Appellee Federal Land Bank of Spokane is a secured creditor as to nearly all the orchard property under purchase at a sheriff's sale held April 29, 1939, and Leavenworth State Bank is a creditor with a lien on all the orchard property under a state court decree entered January 6, 1940.

After notice to the creditors, and on application of appellant for an order (1) vesting in appellant the possession of the orchard property for three years under the supervision of the court; (2) staying all judicial or official proceedings against the orchard property for three years; and (3) fixing the rental value of the orchard property. The commissioner granted the application and fixed the rental of the orchard at 50% of the net proceeds of the sale of fruit raised thereon, and determined the date of payment of the rental. He also directed appellant to file monthly statements of receipts and expenditures.

The farmer debtor did not seek review of this order, which in response to his application vested in him possession for three years of the major part of his property, including the entire orchard unit. With the use of the farm machinery and an automobile, he farmed the orchard for three years and two months, until, under circumstances later considered, the property was placed in the hands of a receiver.

Appellant again applied to the commissioner for a second order of possession, rental and stay as to property not covered by his first application. The commissioner on March 31, 1941, made such an order concerning the farm machinery and automobile and personal property which had been in his possession and use, and repeating provisions of his first order, but antedating the second order to the date of the first order. Appellant did not petition for review of this second order of the commissioner within the ten days provided in Section 39, sub. c, of the Bankruptcy Act, 11 U.S.C.A. § 67, sub. c, and the District Court denied its review later petitioned. From this denial of review appellant appeals.

In view of the fact that appellant in fact had had the use and possession of all that he asked for in his second application from the time of the commissioner's first order we cannot hold that the court abused its discretion in denying the review sought after the ten days allowed by the statute. Pfister v. Northern Illinois Finance Corporation, 317 U.S. 144, 63 S.Ct. 133, 87 L.Ed. 146.

Appellant also appeals from an order of October 23, 1942, determining the rental due for 1940 and 1941 under the order of April 30, 1940. On July 7, 1942, appellant filed a report showing receipts and expenditures from the orchard property for 1940 and 1941. No money was paid into court as rental. On September 8, 1942, appellee Federal Land Bank of Spokane filed a petition for a hearing on the report and a determination of the amount of rental which was payable for 1940 and 1941. After a hearing and the presentation of evidence, the court determined the amount due under the rental order of April 30, 1940, to be $2964.63, and directed its payment within fifteen days. This order was entered on October 23, 1942. It was not complied with by appellant. On November 30, 1942, he served notice of appeal.

It is somewhat difficult to follow appellant's contention with regard to this order. Apparently it has to do with alleged retroactive fixing of rental. In any case, the order here under appeal did no more than fix the exact amount of rental due for 1940 and 1941 under the commissioner's order of April 30, 1940. That order fixed the rental on the orchard property at 50% of the net proceeds. It is apparent that, despite a contention to the contrary, it was affirmed save in a single respect having to do with intervals between rental payments by the district court order of November 2, 1940, which was never appealed and which became final.

Nothing more abstruse is involved here than the computation necessary to carry out the provisions of the April 30, 1940 order, which made the rental determinable by setting out an exact percentage for its basis. No complaint is made that the amount found by the court is erroneous. The order of October 23, 1942, respecting rentals is affirmed.

Appealed from also is an order dated April 30, 1943, restraining payments of moneys to appellant by the Leavenworth Fruit and Cold Storage Company, as well as another order directing that these moneys be paid over into the registry of the court. The facts as disclosed by the record on which these orders were entered will be summarized.

By order of the conciliation commissioner entered April 30, 1940, and confirmed by the District Court on November 2, 1940, the appellant was directed to submit to the court monthly a complete and accurate account of all moneys received by him from the sale of produce and also a complete and accurate account of expenditures, including sums paid for materials, labor, picking and storage cost, harvesting and marketing of fruit raised on the orchard property; and he was ordered to pay as rental for this property 50% of the net proceeds realized from the sale of such produce.

On April 12, 1943, appellee Leavenworth State Bank filed its petition alleging the entry of the above order, and alleging further that appellant had made no reports required by the order of April 30, 1940, and that he had paid no rental for 1942 though the crop of that year had been sold through the Leavenworth Fruit and Cold Storage Company, all expenses had been paid, and the storage company had in its possession about six thousand dollars realized from the sale of fruit grown on the orchard property. The petition prayed that appellant be required to submit a report as to receipts and expenditures for 1942, that Leavenworth Fruit and Cold Storage Company be restrained from paying any of the money to appellant pending a hearing, and that it be required to pay the sum held into court.

On this petition a show cause order was made fixing a date for hearing the petition, and requiring appellant prior to that date to file his report of expenditures and receipts for 1942, or to show cause why he failed to do so. On representation by the appellant that fifteen hundred dollars of the money impounded was necessary for the immediate spraying and pruning of the orchard, and for supplies and water rent, the court on April 16, 1943, modified the temporary restraining order and permitted that sum to be paid forthwith to appellant.

On April 30, 1943, the appellant filed an answer to the show cause order and Leavenworth Fruit and Cold Storage Company also filed its answer showing that it had in its possession, after the payment to appellant of the sum allotted for spraying and pruning, $2609.77 owing to appellant for the sale of fruit raised in 1942 on the orchard property.

On the return day of the show cause order, the court found after a hearing that appellant had failed to file his report and that no valid reason for the failure to file had been shown. It ordered that the Leavenworth Fruit and Cold Storage Company retain the moneys until the further order of court and disburse them only upon order of the court. The court subsequently made an order that the money be paid into the court's registry.

As is conceded by appellant, the court's impounding the funds was an effort to induce appellant to file an accounting, so that the percentage based rental might be accurately determined and apportioned to the different lots going to make up the appellant's orchard property. The objection taken is simply to the jurisdiction of the court to withhold moneys from the bankrupt to aid in the securing of figures necessary to the computation of rental already due.

Section 75, sub. s(2), provides that "* * * rental shall be paid into court," and that the debtor's possession of his property during the stay period is "in the custody and under the supervision and control of the court." This appears to afford statutory warrant for the issuance of such an order. The order of April 30, 1943, respecting the impounding of funds, is affirmed.

To be considered next is an appeal from an order of the District Court denying several motions and petitions made to the court. These motions and petitions consist of the following: (1) a motion to the court of the bankrupt to dismiss pending petitions of the creditors to the court or refer them to the conciliation commissioner; (2) a ...