Garlington v. Wasson, 11936.

• Decision Date: 05 January 1948
• Docket Number: No. 11936.,11936.
• Citation: 164 F.2d 243
• Parties: GARLINGTON et al. v. WASSON et al.
• Court: U.S. Court of Appeals — Fifth Circuit

164 F.2d 243 (1947)

GARLINGTON et al. v. WASSON et al.

No. 11936.

Circuit Court of Appeals, Fifth Circuit.

November 14, 1947.

Rehearing Denied January 5, 1948.

Elmer McClain, of Lima, Ohio, Henry D. Akin and O. M. Street, both of Dallas, Tex., and Wm. Lemke, of Washington, D. C., for appellants.

Clyde E. Thomas, of Big Spring, Tex., for appellees.

Before SIBLEY, HOLMES, and McCORD, Circuit Judges.

SIBLEY, Circuit Judge.

The appeal is from a judgment which sustained the report of a special master and in accordance therewith denied motions to reopen and reinstate a case in bankruptcy known as No. 1864, brought on July 26, 1939, by J. S. Garlington and wife as farmer-debtors for relief under Section 75, 11 U.S.C.A. § 203; and also dismissed a later case filed by them under Section 75 on April 15, 1943, known as No. 1932.

Case No. 1864 proceeded before the Conciliator to the point that no plan for rehabilitation was agreed on between the farmer-debtors and their creditors, because of the disagreement of Wasson, a mortgagee of the farm who held the majority in amount of the debts. Amendment was made to proceed as bankrupts under Subsection s, but the case was not diligently prosecuted and the mortgagee got an order to permit him to foreclose in the State court, which he did; and afterwards in March, 1943, the district judge dismissed the bankruptcy proceeding. The Garlingtons brought the case by appeal to this court, where the judgment of dismissal was affirmed on Dec. 9, 1943. Garlington v. Wasson, 5 Cir., 139 F.2d 183. The opinion said that notwithstanding this dismissal a discharge from dischargeable debts could still be had by filing a new proceeding in bankruptcy. This language was interpreted by the Garlingtons as authorizing a new farmer-debtor petition under Section 75, and the special master reports that such a petition with schedules similar to those in No. 1864 was filed on April 15, 1943, being Case No. 1932. This petition was approved by the judge on April 26, 1943, and referred to the Conciliator, but no further action was taken by debtors or creditors until in January, 1946, when a motion was filed by the debtors to reopen Case No. 1864. Nothing has been done in Case No. 1932. The special master reported also that the Garlingtons were not farmers in 1943, or since, and had not been in possession of a farm for several years, and had scheduled no debts but the old ones, that the mortgagee Wasson, who had foreclosed in 1942, had no deficiency judgment, and the Garlingtons had a $10,000 U. S. war bond which with their cash and other liquid assets far exceeded all their debts. He reported also that this court had not meant that a new case under Section 75 could be substituted for the old one so as to carry it on, but only that an ordinary voluntary bankruptcy was open to the debtors to get a discharge from their dischargeable debts.

1. This is the plain meaning of our former opinion. The Case No. 1864 was dismissed for failure to prosecute it during more than the three years which Section 75, sub. s, allows for rehabilitation. We certainly did not mean that the time could be extended three more years by refiling the petition, but only that discharge from dischargeable debts could still be...