Huber v. Moran

• Decision Date: 05 February 1944
• Docket Number: No. 12707.,12707.
• Citation: 140 F.2d 823
• Parties: HUBER et al. v. MORAN.
• Court: U.S. Court of Appeals — Eighth Circuit

140 F.2d 823 (1944)

HUBER et al. v. MORAN.

No. 12707.

Circuit Court of Appeals, Eighth Circuit.

February 5, 1944.

R. Brown, of Creston, Iowa (Geo. F. Buresh, of Cedar Rapids, Iowa, on the brief) for appellants.

E. Marshall Thomas, of Dubuque, Iowa, for appellee.

Before STONE, JOHNSEN, and VAN VALKENBURGH, Circuit Judges.

STONE, Circuit Judge.

Appellants are farmers proceeding under Section 75, sub. s, of the Bankruptcy Act, as amended, 11 U.S.C.A. § 203, sub. s, in connection with an Iowa farm which had been deeded to appellee to satisfy an indebtedness with a contract for repurchase. In the course of the proceeding (which began March 2, 1940), the property had been appraised at $11,000 and annual rental fixed at $1,200 (March 1, 1941, to March 1, 1942) and at $1,000 (from March 1, 1942, to March 1, 1943). Appellants filed an application for credit on rental of certain expenditures by them. January 14, 1943, an order was entered allowing the credit in part and denying it otherwise. There was no appeal from this order. Appellants sought further consideration of such credits and also consideration of a few additional claimed credit items. On May 15, 1943, the Court entered an order declining further consideration of the theretofore adjudicated items and allowing the additional items in part and denying the balance. An appeal from this order was, on motion, dismissed in this Court. Appellants filed a petition for reappraisement of this real estate by the Court and a petition for rehearing on the order of May 15, 1943. Appellee filed a motion for fixing of the rental for the farm year 1943. June 30, 1943, the Court entered an order (after full hearing) denying the petition for rehearing, fixing the value of the property at $15,600, the 1943 rental at $1,320 and the debt due appellee at $20,270.51. From that order, appellants bring this appeal. Heretofore, this appeal in so far as it relates to denial of the petition for rehearing has been, on motion, dismissed by this Court.

Three matters are argued in the brief and orally. The first has to do with the items involved in the petition for rehearing relating to credits. Since this portion of the appeal has been dismissed, no consideration can be given to that issue. The two other matters are the claimed excessiveness of the appraised value of the property and of the rental fixed for 1943. These are really questions of the sufficiency of the evidence to sustain the determinations of the trial Court as to each of these matters; but, as put forward here, present an attack upon the measure of value used by the Court.

The contention of appellants is that, under this section 75, "the fair and reasonable market value of land as intended by Congress was that value on which the farm would over a period of years earn a sufficient income to enable the farmer to permanently own his farm and home."¹ Section 75, sub. s provides that the appraisal shall be "at its then fair and reasonable market value" and provides for a "reappraisal" (75, sub. s(3). Obviously, the reappraisal is to ascertain the then "market value." "Market value" has an established legal meaning. That the Congress comprehended and intended this legal meaning and not that contended for by appellants is emphasized by the express requirements as to ascertainment of value in railroad reorganization proceedings under section 77 of the Act, 11 U.S.C.A. § 205. See Group of Institutional Investors v. Chicago, M., St. P. & Pac. R. Co., 318 U.S. 523, 539, 63 S.Ct. 727.²

The legal meaning of the "market value" of land or other property not having an established current open market is that it is "the amount that in all probability would have been arrived at by fair negotiations between an owner willing to sell and a purchaser desiring to buy." Olson v. United States, 292 U.S. 246, 257, 54 S.Ct. 704, 709, 78 L.Ed. 1236; De Laval Co. v. United States, 284 U.S. 61, 72, 52 S.Ct. 78, 76 L.Ed. 168; Whitlow v. Commissioner, 8 Cir., 82 F.2d 569, 574; Olson v. United States, 8 Cir., 67 F.2d 24, 29, 30; North American Teleg. Co. v. Northern Pac. Ry. Co., 8 Cir., 254 F. 417, 418. Such "market value" is necessarily a matter of estimate based upon elements having a bearing upon the judgment of such a seller and buyer. Olson v. United States, 292 U.S. 246, 256, 257, 54 S.Ct. 704, 78 L.Ed. 1236; Olson v. United States, 8 Cir., 67 F.2d 24, 29, 30; North American Teleg. Co. v. Northern Pac. Ry. Co., 8 Cir., 254 F. 417, 418. In appraisals of farm lands in proceedings under section 75, sub. s of this Act, this Court has applied this rule of determination of "market value" and has called attention to various elements having a bearing upon such value. Kauk v. Anderson, 8 Cir., 137 F.2d 331, 334, 335; Rait v. Federal Land Bank of St. Paul, 8 Cir., 135 F.2d 447, 451; Equitable Life Assur. Soc. v. Deutschle, 8 Cir., 132 F.2d 525, 527; Equitable Life Assur. Soc. v. Carmody, 8 Cir., 131 F.2d 318, 321. We hold that the measure of value in appraisals and reappraisals under section 75, sub. s, is, by that section, expressly required to be the market value as that term is legally established as above.

Next as to the sufficiency of the evidence to support the determinations of the Court as to the reappraised value and the rental for 1943. Appellants urge no difference between these two matters. Appellee presented three and appellants seven witnesses. Two of appellee's witnesses were long-experienced dealers in farm lands — one being also a farmer — living in the county where this farm is located. The other witness for appellee had lived all of his life in a village (Farley) near this farm; had farmed for ten or fifteen years in that vicinity; had sold farms in that neighborhood for thirty years; and was engaged in "real estate and dairy man." All of appellants' witnesses lived in Farley or on farms in that vicinity. One was an experienced real estate dealer, another experienced in real estate and livestock, a third was in a bank at Farley, three were farmers and one (a brother of appellants) works on this farm for appellants — two of these witnesses acted as appraisers in the original appraisal of this farm. All of the...