In re McGoldrick
| Decision Date | 03 September 1941 |
| Docket Number | No. 9581.,9581. |
| Citation | 121 F.2d 746 |
| Parties | In re McGOLDRICK et al. McGOLDRICK v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Tyson Kinsell, of Portland, Or., and Ernest R. Ringo, of LaGrande, Or., for appellant.
Cochran & Eberhard, of LaGrande, Or., and Hamblen, Gilbert & Brooke, of Spokane, Wash., for appellee.
Before GARRECHT, HANEY, and STEPHENS, Circuit Judges.
On February 17, 1941, this court handed down its opinion in the above-entitled cause, affirming two orders of the United States District Court for the District of Oregon in proceedings under Section 75 of the Bankruptcy Act, as amended, 11 U.S. C.A. § 203.
Thereafter, this court upon its own motion vacated its opinion hereinabove referred to and ordered the matter set down for further argument.
We have now fully considered the matter in conjunction with the arguments of counsel upon the rehearing, and find no cause for making essential changes in our first opinion, although for clarity we have extended the facts and have changed the text and have made certain additions to it.
Proceedings under Section 75 of the Bankruptcy Act, as amended, 11 U.S.C.A. § 203. During 1927 Henry McGoldrick and Lettie M. McGoldrick, his wife, became indebted to the assignor of the appellee herein in the sum of $25,000, and gave as security for the debt a first mortgage on certain farm lands owned by them in Oregon. They became in default and on February 7, 1935, appellee instituted action in the Oregon state courts to foreclose the mortgage. On September 24, 1935, Henry McGoldrick filed his petition under § 75 of the Bankruptcy Act, which was approved and referred to a Conciliation Commissioner. The following month, in October, 1935, while the matter was pending before the Conciliation Commissioner, appraisers were appointed and the real property covered by the mortgage was appraised at $29,780, and the appraisement was approved by the court.
At this point it should be noted that § 75 contains no provision for appraisal during the course of the conciliation proceedings covered by subsections a to r. The transcript of the record does not disclose whether this appraisal was asked by any creditor or by the debtor. See Borchard et al. v. California Bank et al., 310 U.S. 311, 60 S.Ct. 957, 84 L.Ed. 1222.
The debtor failed to effect the voluntary adjustment with his creditors, and on April 1, 1936, Henry McGoldrick and Lettie M. McGoldrick amended the petition and asked to be declared bankrupts under subsection s of the Act. In this amended petition they prayed in the language of the statute, that all of their property, wherever located, whether pledged, encumbered or unencumbered be appraised, that their unencumbered exemptions be set aside to them, and that they be allowed to retain possession, under the supervision and control of the court of the remainder of their property under the terms of the Act.
On April 22, 1936, another petition was filed by the debtors, in which they offered to pay a cash rental for the property in the sum of $1,750, or a share of the crops on the mortgaged land, at the option of the appellee. This petition likewise contained the prayer for an appraisal of their property, and that they be allowed to retain possession.
The record does not disclose any appraisal of the property involved other than that filed in October, 1935, prior to the filing of the amended petition under subsection s.
On August 31, 1936, the Conciliation Commissioner entered an order granting the debtors' petition to retain possession of their property and pay $1,750 per year or a share of the crops on the mortgaged land. In November, 1936, a further order was entered by the Conciliation Commissioner, which recited that on August 31, 1936, the Commissioner had ordered that all proceedings in all courts, particularly Oregon state courts, looking to foreclosure of the mortgage, be stayed for a period of three years.
The $1,750 yearly rental has been paid by the debtors in accordance with the order of the Conciliation Commissioner.
On March 13, 1939, before the termination of the three-year period designated in the stay order, Lettie M. McGoldrick petitioned for an order extending the stay one year. The grounds for said petition are not shown by the record before us. The Commissioner filed his order on April 20, 1939, granting the petition. The appellee sued out a review of these proceedings, and on August 26, 1939, the District Court reversed the order of the Commissioner, holding that Section 75 of the Bankruptcy Act does not permit of a stay of proceedings for longer than three years. The order of the District Court held that proceedings were stayed until November 13, 1939, three years from the date of the entry of the order of the Commissioner staying proceedings. No appeal was taken from this order of the District Court.
On November 20, 1939, after the expiration of the three-year period, the appellee filed its petition for the appointment of a trustee to sell the mortgaged property, at public auction, free from liens, alleging that the debtors had not been able to refinance, and had not paid the appraised value of the property into court.
Lettie M. McGoldrick filed a "demurrer" to this petition raising the following questions:
(a) Pendency of the state foreclosure suit.
(b) Sufficiency of the facts of the petition to justify the relief sought.
(c) Jurisdiction of the court to make the order as to the debtor Henry McGoldrick, he having died during the pendency of the proceedings.
It should be noted that Mrs. McGoldrick did not raise the question as to the proposed method of sale, or as to the propriety of the proceedings in view of the fact that no appraisal of the property had been made after the petition under Section 75, sub. s.
The demurrer was overruled by the court on January 20, 1940, and the Conciliation Commissioner was appointed as trustee to make the sale of the property "at public auction free from liens", the proceeds to be applied first to costs of administration, and second to distribution in accordance with the Act.
On January 31, 1940, the court entered its order directing the manner and notice of the sale, and specifying that the sale should be made subject to a 90-day redemption period in the debtors by payment of the bid price plus 5%.
On March 11, 1940, Lettie M. McGoldrick filed a petition stating that she was unable to tender the appraised value, and asking for an extension of the moratorium for four more years, and praying that the sale order be vacated.
Again no question as to the manner of sale or as to the lack of a proper appraisal was raised by the debtor.
Appellee moved to dismiss the petition, alleging that the court had no power to grant a further moratorium. An order was entered by the court on April 8, 1940, denying the motion to dismiss and denying a further moratorium.
The sale was held on April 15, 1940, after various postponements, the appellee bidding in the property at the full amount of its lien. A return of sale was filed April 16th. Lettie M. McGoldrick objected to confirmation of the sale, setting up as grounds of objection:
(a) That the District Court was without jurisdiction to order the sale.
(b) That the order to show cause why the sale should not be confirmed was not served on Henry McGoldrick, since he was not living.
(c) That the court erred in overruling Mrs. McGoldrick's petition to set aside the order of sale and in denying the further moratorium.
(d) The pendency of the foreclosure proceedings in the state court.
The sale was confirmed by the District Court on May 7, 1940.
This appeal is from the two orders of the court last above referred to, that of April 8, 1940, denying the debtor's petition to set aside the sale order and for a further moratorium; and that of May 7, 1940, confirming the sale.
As to the April 8, 1940 order, the appellant's position as stated in her briefs is that the Act authorizes the courts "to extend the individual farmer's moratorium within reason", the theory being that the power to shorten carries with it the power to extend. The argument from that point is that the refusal of the court to grant the extension prayed for was an abuse of discretion.
As to the May 7, 1940, order, the following points are urged by the appellant in her brief:
1. That the court was without jurisdiction to appoint a trustee to sell the mortgaged premises. The argument here is that the court should have proceeded under the general bankruptcy provisions relating to the liquidation of assets. Appellant contends that the right of a secured creditor to procure an order for the sale of property subject to his lien at public auction is conditioned on the debtor's attempt to pay the appraised value of the property into court under the terms of the Act.
2. Pendency of the state foreclosure proceedings. It is here argued that the debtor invoked the jurisdiction of the federal court for purposes of the moratorium only, and that upon the expiration of the stay period the state court's jurisdiction again attached. She alleges prejudice in the procedure adopted in that it reduces her right of redemption from one year (the period under the state law) to ninety days. She also argues that the procedure prejudices the rights of general creditors and junior lienors.
3. Sale of property "free from liens". Appellant here argues that the Act makes no provision for sales of real property free from liens under the procedure chosen by the appellee. She contends that "the controlling principle drawn from the court decisions, would seem to be that if there is no benefit to the general estate, it is not proper to sell free from liens", and "that it is improper to invoke the doctrine merely to accommodate a mortgagee or unless there was a reasonable probability of a surplus for unsecured...
To continue reading
Request your trial
-
In re Manufacturers Trading Corp.
...87 L.Ed. 300; In re Batavia Metal Products, 7 Cir., 166 F.2d 7; In re Kansas City Journal-Post Co., 8 Cir., 144 F.2d 816; In re McGoldrick, 9 Cir., 121 F.2d 746, certiorari denied 314 U. S. 675, 62 S.Ct. 187, 86 L.Ed. 540; Kenyon v. Chain O'Mines, 10 Cir., 107 F.2d 160. In those cases the o......
-
Combined Metals Reduction Co., Matter of
...Co., 300 U.S. 131, 57 S.Ct. 382, 81 L.Ed. 557 (1937); Commercial Credit Corp. v. Skutt, 341 F.2d 177 (8th Cir. 1965); In re McGoldrick, 121 F.2d 746 (9th Cir. 1941). In Wayne Gas,supra, the Supreme Court seemingly stated that a bankruptcy court can vacate its decision even after an appeal t......
-
In re Borg, Bankruptcy No. 87-40134.
...Co., 300 U.S. 131, 57 S.Ct. 382, 81 L.Ed. 557 (1937); Commercial Credit Corp. v. Skutt, 341 F.2d 177 (8th Cir.1965); In re McGoldrick, 121 F.2d 746 (9th Cir. 1941)." Id. at The Court then quoted from the United States Supreme Court decision of Wayne United Gas Co. v. Owens-Illinois Glass Co......
-
Smith v. Federal Land Bank of Berkeley, 10666.
...under section 75, sub. s. Since a three-year stay under section 75, sub. s may not be made until after an appraisal (In re McGoldrick, 9 Cir., 121 F. 2d 746; Borchard v. California Bank, 310 U.S. 311, 60 S.Ct. 957, 84 L.Ed. 1222), and since such appraisal was not had, no right to a further ......