Eaves v. Glenn, 456

• Citation: 9 F. Supp. 647
• Decision Date: 26 October 1934
• Docket Number: No. 100.,No. 456,456,100.
• Parties: EAVES et ux. v. GLENN et al. HOLLUMS et al. v. SAME.
• Court: U.S. District Court — Northern District of Texas

9 F. Supp. 647

EAVES et ux. v. GLENN et al.

HOLLUMS et al. v. SAME.

No. 456, No. 100.

District Court, N. D. Texas, Amarillo and Lubbock Divisions.

October 26, 1934.

Jno. B. Daniel, of Temple, Tex., and E. M. Critz, of Coleman, Tex., for defendant Glenn.

Vickers, Campbell & Evans, of Lubbock, Tex., for plaintiff Hollums and others.

J. D. Thomas, of Farwell, Tex., for plaintiffs Eaves.

No. 456, Amarillo Division; No. 100, Lubbock Division.

JAMES C. WILSON, District Judge.

The facts of these cases are so similar, they will be disposed of in one opinion. Each of the plaintiffs, as farmers, filed their petitions, together with their schedules under section 75, as added to the Bankruptcy Act of 1898, as amended by recent acts of Congress (11 USCA § 203). Prior thereto, H. C. Glenn, the defendant, as receiver of the Temple Trust Company under appointment of the United States District Court for the Western District of Texas, brought suit against the plaintiffs herein on certain notes, in the state district court of Bell county, Tex., and to foreclose a lien on lands belonging to these plaintiffs. Judgments and foreclosures were had in those suits, and orders of sale were issued; in the case of Eaves, to W. W. Hall, sheriff of Palmer county, Tex., and in the case of John A. Hollums, to E. S. Randerson, sheriff of Floyd county, Tex., and the lands involved herein, belonging to plaintiffs, were sold by said sheriffs at public sale, and in each instance to the defendant H. C. Glenn, and all prior to the filing of said petitions in bankruptcy. At this juncture, while Eaves and Hollums still held possession of their lands, and prior to the delivery of any deeds by the sheriffs to H. C. Glenn as purchaser, plaintiffs filed said petitions in bankruptcy. Immediately thereafter these equity suits were filed by these plaintiffs, asking that the defendant Glenn and the sheriffs of said counties be restrained from delivering deeds to said properties and from in any manner dispossessing plaintiffs of such properties, which restraining orders, upon an ex parte hearing, were granted by this court as prayed for. Hearings on the injunctions were set down for Amarillo for the 13th of last month. The defendant Glenn presented a motion to dismiss in both cases, the principal ground being that the lands in question did not belong to plaintiffs at the time they filed their said petitions in bankruptcy, and could not legitimately be included in their schedules of assets; that the execution and delivery of deeds by the sheriffs to the defendant were not essential to the passing of title; that such act of the sheriff, in executing and delivering such deeds, is a purely ministerial act; that the fee-simple title to such properties, though such deeds had not been made or delivered, passed to defendant H. C. Glenn by virtue of the public sale, where he became, as the highest bidder, the purchaser of same; that, as a result of such public sale, titles to the properties involved were divested out of such plaintiffs and vested in the defendant as completely as if said deeds had been made and delivered prior to the filing of such petitions in bankruptcy; that, the titles having passed out of plaintiffs prior to the filing of such petitions in bankruptcy, this court is without jurisdiction of said properties.

After brief arguments on the motion to dismiss, I overruled same, and required the parties to introduce their evidence, announcing that I would really reserve ruling on the motion to dismiss until I heard the evidence. The introduction of evidence developed that there is really no controversy about the facts; those material to the decision of the case are substantially as above stated. Also the position of the defendant for a dismissal of the case on its merits is substantially as above stated on the motion to dismiss.

Plaintiffs take the position that the effect of the public sale, with the understanding between the sheriffs and the defendant Glenn, as purchaser, merely that a credit of the purchase price be entered upon the judgments, in the absence of the actual execution and delivery of the deeds, would not have the effect to divest plaintiffs of their titles and vest same in the defendant; that, under such circumstances, not only the possession, but the title as well, was in plaintiffs, and was so vested in them at the time of the filing of their petitions and their schedules as debtors.

Furthermore, it is the position of the plaintiffs, under paragraph (o) of section 75 and subdivisions of same numbered (1), (2), (3), (4), (5), and (6), 11 USCA § 203 (o) (1-6), that all proceedings under the foreclosure judgments of the state district court of Bell county, particularly to dispossess plaintiffs of their lands, were suspended; that no further proceedings to divest them of title or to oust them of the possession of their properties could be had, except upon petition made to, and granted by, this court, after a hearing and report by the conciliation commissioner; that, even conceding the correctness of defendant's position that the superior title to the property passed to the defendant by virtue of the public sale, the legal title, in the absence of the execution and delivery of the sheriff's deeds, remained in plaintiffs, and under said subdivisions of section 75 no further proceedings in court or otherwise could be maintained against the plaintiffs or their properties at any time after the filing of their said petitions in bankruptcy, and prior to the confirmation or other disposition of their composition or extension proposals.

No question is raised as to the constitutionality, or the validity of this act. Assuming that the act is valid and binding, it is a question here of determining the intent of Congress as gathered from the words of the amendment. On this basis, I think it clear that Congress intended that the filing of such a petition in bankruptcy by the farmer was to be a caveat to all the world that all legal proceedings against the farmer, either to divest him of the title to property, or of the possession of property, should cease upon the filing of such bankruptcy petition, and that thereafter the farmer's rights with respect to the title or possession of property, as well as the rights of all his creditors, should be submitted to, and passed upon by, the Bankruptcy Court, to the exclusion of all other courts. To my mind, paragraph (n) of section 75, 11 USCA § 203 (n), and paragraph (o), with its subdivisions numbered from (1) to (6), inclusive, settles this. Those provisions of the act are as follows:

"(n) The filing of a petition pleading for relief under this section shall subject the farmer and his property, wherever located, to the exclusive jurisdiction of the court. In proceedings under this section, except as otherwise provided herein, the jurisdiction and powers of the court, the title, powers, and duties of its officers, the duties of the farmer, and the rights and liabilities of creditors, and of all persons with respect to the property of the farmer and the jurisdiction of the appellate courts, shall be the same as if a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the farmer's petition or answer was filed.

"(o) Except upon petition made to and granted by the judge after hearing and report by the conciliation commissioner, the following proceedings shall not be instituted, or if instituted at any time prior to the filing of a petition under this section, shall not be maintained, in any court or otherwise, against the farmer or his property, at any time after the filing of the petition under this section, and prior to the confirmation or other disposition of the composition or extension proposal by the court:

"(1) Proceedings for any demand, debt, or account, including any money demand;

"(2) Proceedings for foreclosure of a mortgage on land, or for cancellation, rescission, or specific performance of an agreement for sale of land or for recovery of possession of land;

"(3) Proceedings to acquire title to land by virtue of any tax sale;

"(4) Proceedings by way of execution, attachment, or garnishment;

"(5) Proceedings to sell land under or in satisfaction of any judgment or mechanic's lien; and

"(6) Seizure, distress, sale, or other proceedings under an execution or under any lease, lien, chattel mortgage, conditional sale agreement, crop payment agreement, or mortgage."

There is no question raised here as to the jurisdiction of the state district court in the foreclosure proceedings, nor as to the validity of the order of sale issued by that court, nor is the legality of the sheriff's act in selling the properties in any manner questioned. As to where the titles to the properties are, under the undisputed facts as heretofore stated, we must look to the statutes and decisions of Texas. They are binding upon this court. As to whether the effect of public sales, made by the sheriffs, of these properties, though no deeds were executed or delivered prior to the...