Court Opinion

ID: 6878767
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:11:34.397795+00
Date Added: 2024-06-11T16:05:32.738386
License: Public Domain

On Petition for Rehearing.
Appellants have filed a petition for rehearing, contending that the case of John Hancock Mutual Life Ins. Co. v. Bartels, 60 S.Ct. 221, 84 L.Ed. - (December 4, 1939), decided by the United States Supreme Court a few days subsequent to oitr decision in the instant case, holds contrary to our decision.
We have examined the Hancock case, supra, and do not agree with appellants’ interpretation of the case.
In the cited case the farmer had petitioned under Section 75 of the Bankruptcy Act, 11 U.S.C.A. § 203, and the petition was referred to a conciliation commissioner. The usual proceedings were had, in which the farmer failed to effect the voluntary adjustment with his creditors, and the farmer petitioned to be declared bankrupt under Section 75, sub. s.
The principal creditor of the farmer moved the District Court to set aside the adjudication under Section 75, sub. s, and to dismiss the debtor’s petition, on the ground that the farmer was not entitled to avail himself of the provisions of that section since there was no reasonable possibility of financial rehabilitation. The District Court granted the motion to dismiss, and upon appeal to the Circuit Court of Appeals the order of the District Court was reversed. The Supreme Court affirmed the decision of the Circuit Court of Appeals, 5 Cir., 100 F.2d 813, holding that the Act contained no provisions for dismissal because of the absence of reasonable probability of financial rehabilitation. In so holding, the Supreme-Court disapproved of certain dictum in the case of Wright v. Vinton Branch of Mountain Trust Bank of Roanoke, 300 U.S. 440, 462, 57 S.Ct. 556, 562, 81 L.Ed. 736, 112 A.L.R. 1455, to the effect that a petition could be dismissed in the absence of the probability of financial rehabilitation.
In our decision we relied on the case of Wright v. Vinton Branch, supra, which held that the Act “must be interpreted as meaning that the court may terminate the stay if after a reasonable time it becomes evident that there is no reasonable hope that the debtor can rehabilitate himself within the three-year period.” This construction was given the statute in order to uphold its constitutionality. The language which we relied upon in our decision is not the language of which the Supreme Court disapproved in the Hancock case, supra.
Appellants argue that the Hancock case holds that it is the duty of the District Court to follow the statute, and argue therefrom that the District Court erred in permitting foreclosure of liens upon the property while the conciliation commissioner had under consideration the making of a stay order.
We adhere to our decision that the District Court has discretion to terminate *101the stay if at any time it appears that rehabilitation is not reasonably probable, and that in the instant case, it does not appear that the District Court abused that discretion. The appellants argue that it was improper for the Court to authorize the sale under the trust deeds before the election of a trustee in bankruptcy. But this is not a question going to the jurisdiction of the court, and therefore cannot be considered for the first time on appeal.
The petition for rehearing is denied.