Federal Land Bank of Springfield v. Hansen, 347.

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit
• Citation: 113 F.2d 82
• Parties: FEDERAL LAND BANK OF SPRINGFIELD et al. v. HANSEN.
• Docket Number: No. 347.,347.
• Decision Date: 20 June 1940

113 F.2d 82 (1940)

FEDERAL LAND BANK OF SPRINGFIELD et al.
v.
HANSEN.

No. 347.

Circuit Court of Appeals, Second Circuit.

June 20, 1940.

113 F.2d 83

Robert D. Jones, of Springfield, Mass., for appellants.

E. A. Mackey, of Franklin, N. Y., for appellee.

Before L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

The previous activities of Marie Hansen, the debtor herein, are recorded in our opinion in Federal Land Bank of Springfield v. Hansen, 2 Cir., 109 F.2d 139. After we affirmed the order of the district court refusing to dismiss the proceedings under Bankruptcy Act, § 75, sub. s, the debtor resumed her efforts to resuscitate her dairy farm. Under order of the district court dated May 22, 1939, she was to pay into court an annual rental of $480, in semiannual installments of $240, beginning on July 6, 1939, and thereafter on the 6th day of each January and July. Up to February 27, 1940, nothing at all had been paid into court, although the debtor claims that payments made on feed bills should be considered as partial payments of rent. On that day the Federal Land Bank of Springfield and Federal Farm Mortgage Corporation moved for leave to foreclose mortgages held by them on the farm and on livestock and farm machinery. On March 4, 1940, upon ex parte application by the debtor's attorney, the provisions of the order of May 22, 1939, directing semiannual rent payments, were suspended by the district court until June 1, 1940. The petitioners then amended their motion by adding a prayer that the order of March 4 be vacated. On March 16, 1940, the court entered its order denying petitioners' motion in its entirety, with leave to renew on June 1, 1940. The appeal is from this latest order of the district court.

Appellants' motion for leave to foreclose was made pursuant to Bankruptcy Act, § 75, sub. s (3), 11 U.S.C.A. § 203, sub. s (3), the last sentence of which provides: "If, however, the debtor at any time fails to comply with the provisions of this section, or with any orders of the court made pursuant to this section, or is unable to refinance himself within three years, the court may order the appointment of a trustee, and order the property sold or otherwise disposed of as provided for in this title." Appellants point to the failure of the debtor to comply with the rent order, and urge that in such a case it is mandatory upon the court to order the property sold.

We believe, however, that the steps to be taken upon the failure of the debtor to comply with an order are discretionary with the court. Many statements in the numerous opinions construing section 75, sub. s, indicate that this is so. In Wright v. Vinton Branch, 300 U.S. 440, 465, note 9, 57 S.Ct. 556, 563, 81 L.Ed. 736, 112 A.L.R. 1455, Mr. Justice Brandeis quoted from the House Report recommending passage of the new Frazier-Lemke Act H.R.Rep. No. 1808, 74th Cong., 1st Sess. (1935) 5, 6 as follows: "Under the new subsection s the property of the bankrupt is in the complete custody and control of the court, for all the purposes of liquidation. * * * The Supreme Court intimated that in the original subsection, the district court did not have sufficient discretion. In this subsection, the district court is given complete control and discretion." Similar statements appear in In re Miller, 6 Cir., 111 F.2d 28, 33; Federal Land Bank v. Strawn, 6 Cir., 102 F.2d 677, 678; Paradise Land & Livestock Co. v. Federal Land Bank, 10 Cir., 108 F.2d 832, 833; Borchard v. California Bank, 9 Cir., 107 F. 2d 96, 98, reversed on other grounds, 60 S. Ct. 957, 84 L.Ed. 1222. That the authority

113 F.2d 84

vested in the court by the last sentence of section 75, sub. s (3), in particular is discretionary is indicated by the use of the phrase "the court may order." "May" has no fixed purport, but it will usually be construed not to mean "shall." United States ex rel. Siegel v. Thoman, 156 U. S. 353, 15 S.Ct. 378, 39 L.Ed. 450. "May" will ordinarily be interpreted as discretionary when the word "shall" appears in close juxtaposition in other parts of the same statute. See the opinion of Judge Learned Hand in Jensen v. Lehigh Valley R. Co., D.C.S.D.N.Y., 255 F. 795. In section 75, sub. s, the word "shall" appears many times, while "may" is employed, with reference to action by the court or an officer thereof, only in the sentence now under discussion and in the last sentence of section 75, sub...