First Nat Bank Trust Co of Bridgeport, Conn v. Beach

• Decision Date: 17 May 1937
• Docket Number: No. 621,621
• Citation: 301 U.S. 435,57 S.Ct. 801,81 L.Ed. 1206
• Parties: FIRST NAT. BANK & TRUST CO. OF BRIDGEPORT, CONN., v. BEACH
• Court: U.S. Supreme Court

301 U.S. 435

57 S.Ct. 801

81 L.Ed. 1206

FIRST NAT. BANK & TRUST CO. OF BRIDGEPORT, CONN.,

v BEACH.

No. 621.

Argued April 27, 28, 1937.

Decided May 17, 1937.

Mr. Arthur B. Weiss, of Bridgeport, Conn., for petitioner.

Mr. Sydney P. Simons, of Bridgeport, Conn., for respondent.

Mr. Justice CARDOZO delivered the opinion of the Court.

The question is whether respondent, who has filed a petition under section 75 of the Bankruptcy Act, as amended (11 U.S.C. § 203 (11 U.S.C.A. s 203)) for the composition or extension of his debts, is a farmer as there defined.

The facts are stipulated as follows: Beach was the owner of a farm with five houses and a barn on it where he had lived from his birth, occupying one of the houses with his wife and children as his homestead. The farm had been in the ownership of his family for two centuries and over. For a time he had been engaged in mercantile pursuits, but in 1930, owing to heavy financial losses, he began working on the farm again, and has given most of his time to it ever since. The land had an apple orchard of 200 trees which gave him 1,500 bushels of choice apples in 1931. He got little out of the orchard from 1933 to 1935, the trees during those years being affected by a blight. He sold pears from a few pear trees, and cultivated a large garden of about one acre, planting and raising all kinds of vegetables, fruits, and flowers, more than enough to provide for his family. He raised hay and sold it, repaired the houses, cleaned out one of the wells, laid several miles of stone walls and two miles of barbed wire fence, carted stone from time to time to enable him to rebuild his fences, and raised and sold potatoes. He was occupied principally in raising poultry and eggs, having 200 chickens in 1933, and about 50 from 1935 to the time of the trial. He kept three sheep for food; one horse for carting and hauling; and a miscellaneous assortment of farm tools, none purchased since 1921. His total income per annum from 1930 to 1935 was $4,000 of which $2,200 was derived from renting three-quarters of the farm to various persons for grazing and cultivation. One of these tenants conducted a dairy, and bred, grazed and milked a herd of cows. The earnings from the sale of poultry and eggs were $200, from the sale of hay $75, and $25 from the sale of vegetables and flowers. Rentals from other real estate, not claimed to be farm property, made up the remainder of his income, $1,500. The farm in its entirety was subject to a mortgage of $100,000, held by a bank, and now under foreclosure.

When section 75 of the Bankruptcy Act was adopted in March, 1933, subsection (r) defined a farmer as follows: 'For the purpose of this section and section 74, the term 'farmer' means any individual who is personally bona fide engaged primarily in farming operations or the principal part of whose income is derived from farming operations, and includes the personal representative of a deceased farmer; and a farmer shall be deemed a resident of any county in which such farming operations occur.' Act of March 3, 1933, c. 204, 47 Stat. 1467, 1470, 1473, 11 U.S.C. § 203(r).

The definition was amplified on May 15, 1935, by the following amendment: 'For the purposes of this section, section 4(b), and section 74 (section 22(b), and section 202), the term 'farmer' includes not only an individual who is primarily bona fide personally engaged in producing products of the soil, but also any individual who is primarily bona fide personally engaged in dairy farming, the production of poultry or livestock, or the production of poultry products or livestock products in their unmanufactured state, or the principal part of whose income is derived from any one or more of the foregoing operations, and includes the personal representative of a deceased farmer; and a farmer shall be deemed a resident of any county in which such operations occur.' Act of May 15, 1935, c. 114, § 3, 49 Stat. 246, 11 U.S.C. § 203(r) (11 U.S.C.A. § 203(r).

A petition for relief under the section as thus amended was filed by the debtor on November 14, 1935, and was opposed by the mortgagee, the petitioner here. The District Court held that the debtor was not a farmer within the meaning of the statute, and so dismissed the proceeding. An appeal was allowed by the Circuit Court of Appeals for the Second Circuit, which reversed the judgment of dis- missal, one judge dissenting. In re Beach, 86 F.(2d) 88. The reversal went upon the ground that the principal income of the debtor was derived from farming operations, if rents from the farm tenants ($2,200) were included in the reckoning, as the court held that they should be. We granted certiorari (300 U.S. 650, 57 S.Ct. 513, 81 L.Ed. —-), an important question being involved as to the meaning of an act of Congress.

The only effect of the 1935 amendments of the statute, in so far as they have to do with the definition of a farmer was do make it clear that farming operations include dairy farming and the production of poultry and livestock products in their unmanufactured state as well as the cultivation of the products of the soil. There had been decisions to the contrary. In re Palma Bros. (D.C.) 8 F.Supp. 920; In re Stubbs (D.C.) 281 F. 568; House Report, No. 455, 74th Congress, 1st session, p. 2; Senate Report, No. 498, 74th Congress, 1st session, p. 4. For the purpose of the case at hand the amendments may be laid aside and the simpler phraseology of the section as it stood at the beginning may be accepted as the test. Was respondent a farmer because 'personally bona fide engaged primarily in farming operations' or because 'the principal part of his income was derived from farming operations'?

We do not try to fix the meaning of either of the two branches of this definition, considered in the abstract. The two are not equivalents. They were used by way of contrast. Occasions must have been in view when the receipt of income derived from farming operations would make a farmer out of some one who personally or primarily was engaged in different activities. A catalogue of such occasions might err for excess or for defect if made up in advance. Hypothetical situations are laid before us, and the argument is pressed that the definition will breed absurdity if applied to this one of them or that. We refuse to be led away from the limitations of the concrete case. The words 'primarily engaged,' as we find them in the first branch of the definition, do not constitute a term of art. The words 'income derived from farming...