John Hancock Mut. Life Ins. Co. v. Casey
| Decision Date | 24 May 1943 |
| Docket Number | No. 3847.,3847. |
| Parties | JOHN HANCOCK MUT. LIFE INS. CO. v. CASEY. |
| Court | U.S. Court of Appeals — First Circuit |
G. K. Richardson, William E. Bennett, and Richardson, Wolcott, Patten & Bennett, all of Boston, Mass., for appellant.
Thomas J. Casey, of Boston, Mass., pro se (J. C. Johnston, of Boston, Mass., of counsel), for appellee.
Before MAHONEY and WOODBURY, Circuit Judges, and PETERS, District Judge.
Writ of Certiorari Denied May 24, 1943. See 63 S.Ct. 1176, 87 L.Ed. ___.
This appeal raises the question whether the district court, after approval of a petition under Chapter X of the Chandler Act, 52 Stat. 840, 883, 11 U.S.C.A. § 501 et seq., has power to take possession of mortgaged premises, collect the rents and enjoin the mortgagee from interfering therewith by foreclosure or otherwise.
As was stated by the Circuit Court of Appeals in the Second Circuit, in the case of In re Franklin Garden Apartments, Inc., 2 Cir., 1941, 124 F.2d 451, 454, since the decision in Continental Illinois Nat. Bank & Trust Co. v. Chicago, R. I. & P. R. Co., 294 U.S. 648, 675, 55 S.Ct. 595, 79 L.Ed. 1110, we have no doubt that the district court has such power. It seems to have been properly exercised in this case where the order of events was: the giving of a power of sale mortgage by the debtor covering hotel property in the City of Boston; the filing of mortgagor's petition under Chapter X; the taking possession by the mortgagee; the approval of the petition by the court, followed by orders of the court enjoining foreclosure, ordering relinquishment of possession by the mortgagee and the turning over of collected rents to a trustee who had been appointed.
The property was in custodia legis as of the date of the filing of the petition. We are of the opinion that the district court in its orders directing that possession and the collected rents should be turned over to the Trustee intended that the Trustee should take complete control of the premises and that he should collect not only the September rent which was specifically mentioned in the order to turn over but also all subsequent rents. These orders were fully authorized by Sections 256 and 257 of the Act, which was enacted after the decision of Tuttle v. Harris, 297 U.S. 225, 56 S.Ct. 416, 80 L.Ed. 654, under old 77-B, 11 U.S.C.A. § 207. The orders staying foreclosure proceedings were amply supported by authority of Sections 111-116,...
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