Wragg v. Federal Land Bank of New Orleans, 9753.

Citation125 F.2d 1003
Decision Date24 March 1942
Docket NumberNo. 9753.,9753.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Walter J. Knabe and Jack Crenshaw, both of Montgomery, Ala., for appellant.

Benj. P. Crum, of Montgomery, Ala., for appellee.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

HOLMES, Circuit Judge.

In 1934 appellant mortgaged her farm property in Alabama to the appellee. Nothing having been paid on the mortgage debt in 1937, the appellee sought and obtained a decree of foreclosure in the federal district court, and a special master was appointed to sell the land. Before the sale, appellant filed a petition under Section 75 of the Bankruptcy Act1 for the composition and extension of her debts. Appellee rejected the offer and filed objections to its confirmation. The district court sustained the objections on the ground that the proposal was not a fair, equitable, and feasible method of financial rehabilitation of the debtor. The court denied appellant's motion for leave to amend and pray adjudication as a bankrupt under subsection s of the Act, but granted fifteen days in which to file a voluntary petition in bankruptcy.

Appellant took no further action, and the proceedings were dismissed. Leave to appeal to this court in forma pauperis was denied on the certificate of the district judge that, in his opinion, the appeal was not taken in good faith. In re Wragg, 5 Cir., 95 F.2d 252. Certiorari was denied. 305 U.S. 596, 59 S.Ct. 80, 83 L.Ed. 377. The special master was directed to execute the prior decree of foreclosure. The bank became the purchaser, and the sale was confirmed on April 21, 1938. On April 3, 1939, the bank contracted to sell the property to a third party, delivered possession thereof, and was paid a part of the purchase price.

On December 11, 1939, the Supreme Court rendered its decision in the case of John Hancock Mutual Life Insurance Co. v. Bartels, 308 U.S. 180, 60 S.Ct. 221, 84 L.Ed. 176, holding the fact that there was no reasonable probability of financial rehabilitation did not authorize the dismissal of proceedings for adjudication under subsection s, supra. On March 11, 1940, appellant filed a petition in the court below to reinstate and reopen the proceedings under Section 75 of the Act or, in the alternative, to permit her to refile her petition and schedules, claiming that her said proceedings were improvidently closed and that no intervening rights of innocent third parties had become vested. The petition was dismissed, and this appeal was then brought.

A bankruptcy court has the power, in the exercise of its sound discretion, to revise its judgments upon seasonable application therefor, although the time prescribed for appeal therefrom has expired, if no intervening rights have become vested on the faith of its action. Wayne Gas Co. v. Owens-Illinois Co., 300 U.S. 131, 57 S.Ct. 382, 81 L.Ed. 557. Relying upon this principle, appellant claims that the petition for reinstatement was seasonably brought, being within three months of the Bartels decision; that no intervening rights had become vested, because the two-year statutory period for redemption under Alabama law had not elapsed; and that appellant was therefore entitled, apparently as a matter of right, to the reinstatement of her original proceedings, or to be granted leave to refile the proceedings.

Conceding without deciding that the petition was filed in due time and that no intervening rights had...

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4 cases
  • In re Manufacturers Trading Corp.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • February 5, 1952
    ...Federal Land Bank v. Hansen, 2 Cir., 113 F.2d 82, 84-85; In re Eastern Utilities Investing Corp., 3 Cir., 98 F.2d 620; Wragg v. Federal Land Bank, 5 Cir., 125 F.2d 1003, reversed 317 U. S. 325, 63 S.Ct. 273, 87 L.Ed. 300; In re Batavia Metal Products, 7 Cir., 166 F.2d 7; In re Kansas City J......
  • Wragg v. Federal Land Bank of New Orleans
    • United States
    • U.S. Supreme Court
    • January 4, 1943
    ...dismissed. The court accordingly denied the application. 34 F.Supp. 374. The Circuit Court of Appeals for the Fifth Circuit affirmed. 125 F.2d 1003. We granted certiorari, 317 U.S. 608, 63 S.Ct. 40, 87 L.Ed. -, the questions raised being of importance in the administration of the Bankruptcy......
  • Wragg v. Federal Land Bank of New Orleans, 11078.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • December 11, 1944
    ...former petition and schedules as a new proceeding. The District Court denied both prayers and was affirmed by this court. Wragg v. Federal Land Bank, 125 F.2d 1003. The Supreme Court affirmed the judgment in so far as it refused to reopen the old proceeding, but held that Mrs. Wragg was ent......
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • June 5, 1944
    ...discretion though the time for appeal has expired. This power in the bankruptcy court was recognized by this court in Wragg v. Federal Land Bank, 5 Cir., 125 F.2d 1003. We are of opinion that this bankruptcy court has jurisdiction in its discretion, if justice and equity so require, to reco......

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