Kauk v. Anderson

• Decision Date: 14 July 1943
• Docket Number: No. 12511.,12511.
• Citation: 137 F.2d 331
• Parties: KAUK v. ANDERSON, State Treasurer.
• Court: U.S. Court of Appeals — Eighth Circuit

137 F.2d 331 (1943)

KAUK v. ANDERSON, State Treasurer.

No. 12511.

Circuit Court of Appeals, Eighth Circuit.

July 14, 1943.

F. E. McCurdy, of Bismarck, N. D., for appellant.

Robert A. Birdzell, of Bismarck, N. D. (Olaf M. Thorsen, of Bismarck, N. D., on the brief), for appellee.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

SANBORN, Circuit Judge.

The appellant is a farmer-debtor who was adjudged a bankrupt under § 75, sub. s, of the Bankruptcy Act, 11 U.S.C.A. § 203, sub. s, on May 31, 1940. He is the owner of a farm of 320 acres in Logan County, North Dakota. In 1930 he mortgaged this farm to the Bank of North Dakota to secure a loan of $3,500. The mortgage was assigned to the appellee, whose claims against the bankrupt, growing out of this mortgage loan, aggregate approximately $4,000 and interest. This controversy is due to a difference of opinion as to the value of the farm, the possession and title of which the debtor now seeks to reacquire free from encumbrances. 11 U.S.C.A. § 203, sub. s(3).

The farm was appraised (11 U.S.C.A. § 203, sub. s) at $1,600. The debtor paid that amount into court (11 U.S.C.A. § 203, sub. s(3) to effect redemption. The appellee requested a reappraisal or a valuation (11 U. S.C.A. § 203, sub. s(3). A hearing before a Conciliation Commissioner was had pursuant to this request, at which both parties presented evidence as to the value of the farm. The Commissioner determined the value to be $1,600. On petition of the appellee to review the order of the Commissioner, the District Judge modified the order by fixing the value of the farm at $4,040. The debtor has appealed from the order of the District Judge.

The debtor contends: (1) That the court of bankruptcy did not have power to order a reappraisement or to fix the value of the farm after the "redemption money" had been paid into court "within the time fixed by the court"; and (2) that the District Judge erred in increasing the value fixed by the Commissioner to $4,040.

The first contention is not before us, since it was not presented to the court below. Kimm v. Cox, 8 Cir., 130 F.2d 721, 737, and cases cited. Moreover, the record does not show that the bankruptcy court made any order attempting to limit the time within which the debtor was to pay the appraised value of the farm into court or the time within which a revaluation of the debtor's farm might be applied for. The Bankruptcy Act contemplates that the amount of the appraisal shall be paid into court by the debtor at the end of three years or prior thereto, and a creditor is given the right, on request, to a reappraisal or a valuation, after a hearing, in accordance with the evidence submitted. 11 U.S. C.A. § 203, sub. s(3). There is nothing before us to indicate that the appellee did not fully comply with the pertinent provisions of the Act.

The contention that the District Judge erred in disturbing the finding of value made by the Conciliation Commissioner raises the substantial question in this case.

The effect of the findings of fact of a referee or a conciliation commissioner, where the evidence is conflicting and the determination must rest upon the credibility of witnesses and the weight of evidence, has been considered by this Court in a number of cases. See: Maners v. Ahlfeldt, 8 Cir., 59 F.2d 938, 939; Rasmussen v. Gresly, 8 Cir., 77 F.2d 252, 254; Yutterman v. Sternberg, 8 Cir., 86 F.2d 321, 111 A.L.R. 736; Equitable Life Assur. Soc. of United States v. Carmody, 8 Cir., 131 F.2d 318, 322; Equitable Life Assur. Soc. of United States v. Deutschle, 8 Cir., 132 F.2d 525, 526; Rait v. Federal Land Bank of St. Paul, 8 Cir., 135 F.2d 447; Dunsdon v. Federal Land Bank of St. Paul, 8 Cir., 137 F.2d 84, opinion filed June 29, 1943.

The conciliation commissioner in a case such as this is the trier of the issue of value and is acting as a referee. His findings of fact must be accepted upon review unless clearly erroneous. They are clearly erroneous if they are based upon a substantial error in the proceedings or upon a misapplication of the controlling law, or if they are unsupported by any substantial evidence, or if they are contrary to the clear weight of all the evidence. Dunsdon v. Federal Land Bank of St. Paul, supra. The duty and responsibility of the conciliation commissioner is to impartially and competently try the issue of value upon the lawful evidence adduced by the parties, to fairly appraise the credibility of the witnesses and the weight of their evidence, and, upon the basis of the competent, credible evidence, to soundly determine the issue tried. The function of the district judge, in reviewing the determination of the conciliation commissioner, is to ascertain (1) whether a fair hearing was accorded, (2) whether all competent evidence offered was received and considered, (3) whether any incompetent evidence was received and relied upon, (4) whether there was substantial competent evidence to support the determination, and (5) whether it is contrary to the clear weight of all of the competent evidence adduced.

The district judge may not try the issue de novo upon the record and substitute his judgment of value for that of the conciliation commissioner. Dunsdon v. Federal Land Bank of St. Paul, supra. If the parties were accorded a fair hearing by the commissioner, if no prejudicial error was committed by him, if all competent evidence was considered, and no incompetent evidence was relied upon, and if he reached a determination justified by the evidence, his determination is, ordinarily, conclusive. This does not mean that, on review, the district judge is required to blindly and literally accept as substantial the testimony of expert witnesses which is opposed to physical facts or to common knowledge or to the dictates of common sense or which is obviously based upon pure speculation. Svenson v....