Court Opinion

ID: 8199716
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:23:25.237726+00
Date Added: 2024-06-11T16:40:52.910191
License: Public Domain

The following memorandum was filed June 29, 1938:
Rosenberry, C. J.
(on motion for rehearing). The appellant has moved for a rehearing upon the authority of Wright v. Union Central Life Ins. Co. 304 U. S. 000, 58 Sup. Ct. 1025, 82 L. Ed. 000, decided May 31, 1938. That case does not deal with and, so far as we can see, has no bearing upon the question involved in this case and in the companion case, Kalb v. Feuerstein, post, p. 525, 279 N. W. 687, 280 N. W. 726. It holds the provisions considered constitutional. The plaintiff proceeds upon the theory that the order of the county court of Walworth county confirming the sale was without jurisdiction because after the plaintiff in this action had filed his petition under section 75 of the Bankruptcy Act, as amended on August 28, 1935, the state court was without jurisdiction to proceed. There was no motion for a stay either in the federal court or in the state court, the plaintiff’s theory being that the filing of the *524petition divested the state court of all jurisdiction to proceed in the action then pending before it.
It is considered that plaintiff’s position is not well taken. It may be conceded that the filing of the petition in the federal court created certain rights which the plaintiff in this action might have asserted either in the federal court or in the state court. However, the plaintiff failed to assert such rights either in the federal or state court as has already been stated. All that this court is called upon to' do is to determine whether or not the order of confirmation was valid, and that depends upon whether the county court of Wal-worth county had jurisdiction to make the determination. If it should be held that the mere filing of the petition divested the state court of jurisdiction the whole matter would be thrown into inextricable confusion. No one would know whether a judgment of foreclosure of a state court with an order confirming a sale thereunder was valid or void until a search had been made of the records of the federal courts.
We need not consider nor discuss the question whether the congress has power to divest the jurisdiction of a state court which has once attached. That question is not presented by this record. It would seem from a consideration of section 75, as amended, that the filing of the petition automatically operated to extend the period of redemption. It is possible that that state of facts if made to appear would make the order of the trial court erroneous, but the order would be within the power of the court to make. No appeal having been taken, no' showing having been made in the state court, an order of sale having been confirmed, and the purchaser put in possession, the plaintiff is in no1 position to claim that the order of the county court is void.
We adhere to our former determination that the provisions of section 75 were not intended to provide for a statutory stay, but to create rights which when properly asserted are grounds for a judicial stay.
*525Nor do we find anything in the case of Adair v. Bank of America Nat. Trust & Savings Asso. 303 U. S. 350, 58 Sup. Ct. 594, 82 L. Ed. 000, decided February 28, 1938, to the contrary. While it is stated in that opinion that section 75 provides that the filing of the petition shall effect a stay, the cases cited in support of the proposition are cases relating to the power oí a court of bankruptcy tO' stay proceedings and it is held that courts of bankruptcy have that power. The court said (p. 356) :
“In order to operate and protect the property during the stay, and pending confirmation or other disposition oí the composition or extension proposal, the statute provides in subsections (e) and (n) for the exercise by the court of ‘such control over the property of the farmer as the court deems in the best interests of the farmer and his creditors.’ These provisions look toward the maintenance of the farm as a going concern, and afford clear authority, in a proper case, for the continuance of the operations of the farm after the filing of a petition under section 75 of the Bankruptcy Act.”
See Wright v. Vinton Branch (1937), 300 U. S. 440, 466, 57 Sup. Ct. 556, 81 L. Ed. 736.
By the Court. — Motion denied without costs.