Source: https://supreme.justia.com/cases/federal/us/301/435/
Timestamp: 2019-04-20 08:38:43+00:00

Document:
1. Section 75 of the Bankruptcy Act defined a "farmer" as any individual who is personally bona fide "engaged primarily in farming operations," or "the principal part of whose income is derived from farming operations." Held that these two branches of the definition are not equivalents, but are used in contrast, and neither is a term of art, but, in their application, the question of farmer vel non must be determined by considering and appraising all the facts. P. 301 U. S. 438.
2. Respondent owned a farm, of which he occupied a part, living there and devoting most of his time to cultivation and other farm activities, the products of which were the food for himself and his dependants; the remainder and greater portion of the farm he let out to tenants, who put it to grazing and cultivation, yielding him rentals which constituted the greater part of his income. Held a "farmer" within the meaning of § 75 of the Bankruptcy Act. P. 301 U. S. 439.
Certiorari, 300 U.S. 650, to review the reversal of a petition by the present respondent for relief under § 75 of the Bankruptcy Act, which was opposed by the present petitioner, a bank holding a mortgage on his farm.
The question is whether respondent, who has filed a petition under § 75 of the Bankruptcy Act, as amended (11 U.S.C.
§ 203) for the composition or extension of his debts, is a farmer as there defined.
his income, $1,500. The farm in its entirety was subject to a mortgage of $100,000, held by a bank, and now under foreclosure.
"For the purpose of this section and section 74, the term 'farmer' means any individual who is personally bona fide engaged primarily in farming operations or the principal part of whose income is derived from farming operations, and includes the personal representative of a deceased farmer, and a farmer shall be deemed a resident of any county in which such farming operations occur."
Act of March 3, 1933, c. 204, 47 Stat. 1467, 1470, 1473, 11 U.S.C. § 203(r).
"For the purposes of this section, section 4(b), and section 74, the term 'farmer' includes not only an individual who is primarily bona fide personally engaged in producing products of the soil, but also any individual who is primarily bona fide personally engaged in dairy farming, the production of poultry or livestock, or the production of poultry products or livestock products in their unmanufactured state, or the principal part of whose income is derived from any one or more of the foregoing operations, and includes the personal representative of a deceased farmer, and a farmer shall be deemed a resident of any county in which such operations occur."
Act of May 15, 1935, c. 114, § 3, 49 Stat. 246, 11 U.S.C. § 203(r).
one judge dissenting. In re Beach, 86 F.2d 88. The reversal went upon the ground that the principal income of the debtor was derived from farming operations, if rents from the farm tenants ($2,200) were included in the reckoning, as the court held that they should be. We granted certiorari, an important question being involved as to the meaning of an act of Congress.
The only effect of the 1935 amendments of the statute, insofar as they have to do with the definition of a farmer, was to make it clear that farming operations include dairy farming and the production of poultry and livestock products in their unmanufactured state, as well as the cultivation of the products of the soil. There had been decisions to the contrary. In re Palma Bros., 8 F.Supp. 920; In re Stubbs, 281 F. 568; House Report No. 455, 74th Congress, 1st session, p. 2; Senate Report No. 498, 74th Congress, 1st session, p. 4. For the purpose of the case at hand, the amendments may be laid aside and the simpler phraseology of the section as it stood at the beginning may be accepted as the test. Was respondent a farmer because "personally bona fide engaged primarily in farming operations" or because "the principal part of his income was derived from farming operations"?
them in the first branch of the definition, do not constitute a term of art. The words "income derived from farming operations" do not constitute such a term. In every case, the totality of the facts is to be considered and appraised. We pass to that appraisal here.
1. Beach, the respondent, must be held, when the facts are viewed in combination, to have been "personally" and "primarily" engaged in farming operations.
He was in that business or in none. He was either a farmer or a man of leisure. Cf. In re Glick, 26 F.2d 398, 400. But the stipulation makes it clear that this last he certainly was not. He was in direct or personal possession of forty-eight acres, one-fourth of the large farm which had been in his family for years. A substantial part of this acreage he cultivated with his own labor, or applied, again with his own labor, to other agricultural uses. He did this not for diversion or only in spare hours, but as an engrossing occupation, consuming, in the words of the stipulation, "the major portion of his time." The products of his toil were good for him and his dependents, and the farmhouse was a home. True, the money returns were scanty. To some extent, this was so because of the blight which fell upon his apple orchard in 1932 or later, cutting down the revenues yielded from that source. The scantiness of the yield may have turned him into a bankrupt, but it did not change his occupation. One does not cease to be a farmer because drought or wind or pest may have rendered the farm barren. The critical fact is that the debtor worked an acreage large enough to count, that he did not work at anything else, and that he gave to this work, whether profitable or unprofitable, "the major portion of his time."
farming operations. We shall point out in a moment that the acres personally cultivated and those occupied by tenants are phases and aspects of a unitary calling. The result will be the same, however, though the farming and the leasing be viewed as disconnected, and not as parts of a composite whole. In that view, the farming is still the business; the leases are then investments, more profitable than the business, but leaving it unchanged. A farmer remains a farmer, just as a lawyer remains a lawyer, though the returns of his investments, while not enough to keep him going, are larger, nonetheless, than the profits of his labor.
content that may vary with the setting. Cf. Surace v. Danna, 248 N.Y. 18, 21, 161 N.E. 315; Towne v. Eisner, 245 U. S. 418, 245 U. S. 425; International Stevedoring Co. v. Haverty, 272 U. S. 50. In the setting of this enterprise, the totality of its circumstances, the roots of the respondent's income go down into the soil.
4. Cases in other courts relied upon by the petitioner as excluding the respondent from the category of farmers are consistent, for the most part, with the ruling now made when the opinions are read with due relation to the facts.
Either the debtor posing as a farmer was engaged at the same time in some other line of business or the plots in cultivation were too small to make a farm. Swift v. Mobiley, 28 F.2d 610; In re Spengler, 238 F. 862; In re McMurray, 8 F.Supp. 449; In re Weis, 10 F.Supp. 227.

References: § 75
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§ 203
 § 203
 § 3
 § 203
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