State of North Dakota v. Towner County, 12703.
| Decision Date | 19 April 1944 |
| Docket Number | No. 12703.,12703. |
| Citation | 142 F.2d 48 |
| Parties | STATE OF NORTH DAKOTA v. TOWNER COUNTY. |
| Court | U.S. Court of Appeals — Eighth Circuit |
C. E. Brace, Asst. Atty. Gen. (Alvin C. Strutz, Atty. Gen., and P. O. Sathre, Asst. Atty. Gen., on the brief), for appellant.
Lloyd B. Stevens, State Atty., of Cando, N. D., for appellee.
Before GARDNER, WOODROUGH, and VAN VALKENBURGH, Circuit Judges.
April 18, 1941, one Loula M. Baker filed her amended debtor's petition under Section 75, Subsection s, of the Bankruptcy Act, 11 U.S.C.A. § 203, sub. s, representing that she was a farmer within the definition and meaning of said act and section, and had filed a petition in official form thereunder. That she has failed to obtain acceptance of the necessary majority in number and amount of creditors whose claims were affected by a composition and extension proposal; that she desired to obtain the benefit of Section 75, Subsection s, of the Acts of Congress relating to bankruptcy, and that she has filed Schedule "A" containing a full and true statement of all her debts, and Schedule "B" containing an accurate inventory of all her property, as required by the provisions of said act. Wherefore, she prayed that she might be adjudged by the court to be a bankrupt in accordance with the acts relating to bankruptcy and all acts amendatory thereof.
April 18, 1941, this petition was heard, and there being no opposition, petitioner was duly adjudged a bankrupt under the act by the District Court. Thereafter, the said bankrupt having paid into court, on account of rental for the year 1942, the sum of $676.85, and having filed petition for distribution thereof, the matter was heard, after notice to creditors, before the Supervising Conciliation Commissioner, who found that the unpaid taxes, interest and penalty, against the lands of the bankrupt involved in this proceeding, described as the North half of section 25 in township 157 Range 66 in Towner County, North Dakota, were in the total sum of $580.61. He further found and ordered that the said sum of $676.85 paid into court as rental, as aforesaid, be distributed and paid out as follows:
$580.61 to the County Treasurer of Towner County, N. D., to be applied on all past-due and unpaid taxes, interest and penalty against the lands of the said bankrupt above described, and the sum of $96.24 to be paid to the State of North Dakota, a secured creditor, as required by Subsection s, as amended, of Section 75 of the Bankruptcy Act.
The State of North Dakota, acting in its sovereign capacity of trustee of the Permanent School Funds of the State, created in part by a grant of public lands to said state by the United States under the Enabling Act, approved February 22, 1889, in a petition for review, alleged that said property, and other property therein described, was mortgaged to the State September 25, 1929, to secure a loan of monies belonging to said school fund; that this mortgage was foreclosed, and said premises sold in foreclosure by the sheriff of Towner County, February 26, 1940, to the State of North Dakota for $6,757.35, the full amount then due; that the sheriff then issued and delivered to the state, as such purchaser, a sheriff's certificate in due form, which was duly placed of record March 2, 1940; that the state is now, and ever since has been, the owner and holder of said certificate; that the taxes embraced in the order of disbursement are for the years 1935 to and including 1942; that the lien of the state's mortgage was superior to the lien of Towner County for taxes, and that, if the state eventually takes title by sheriff's deed, those taxes will be extinguished; that, in effect, said order does not preserve the priority of the lien of said sheriff's certificate and of the said State of North Dakota as the owner and holder thereof, but subjects to said taxes the rental due to the state as its owner and holder, under the stay order entered, and is therefore erroneous in ordering the payment of taxes to the county. It therefore prayed that said order be vacated, and that said rental in the sum of $676.85 be ordered paid to the State of North Dakota, appellant herein.
July 14, 1943, the order of the Supervising Conciliation Commissioner, distributing this rental payment, was, after due consideration upon the objection of Towner County, to said petition for review, in all things affirmed. The State of North Dakota appeals and bases its argument upon the following assignment of errors:
"The order appealed from is erroneous because it wholly fails to recognize and protect the priorities of the liens of the appellant and appellee, the only claimants to the rentals".
This distribution of rental was made under the express provision of the Bankruptcy Act, Section 75, sub. s(2), as follows:
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State v. Durupt, 12990.
...708, 283 N.W. 184; State of North Dakota v. Durupt, 8 Cir., 138 F.2d 501; Buman v. Sturn, N.D., 16 N.W.2d 837; State of North Dakota v. Towner County, 8 Cir., 142 F.2d 48. On July 9, 1942, Susanna Durupt purchased the farm from Stutsman County and took a quitclaim deed from her son, conveyi......
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State of North Dakota v. Stanton, 12801.
...identical with those presented to and decided by this court in State of North Dakota v. Szarkowski, 142 F.2d 333, and State of North Dakota v. Towner County, 142 F.2d 48. The opinions in these last-mentioned cases had not been filed until after briefs of counsel had been prepared, but were ......