Court Opinion

ID: 8774084
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:54:51.837177+00
Date Added: 2024-06-11T17:02:25.303405
License: Public Domain

J. B. McPHERSON, District Judge.
The facts of this case are as follows :
The bankrupt owed James L. Cocker $6,655.40 upon two bonds, secured by two mortgages upon two houses and lots of ground. The mortgages were foreclosed, and the sheriff sold the property to Cocker for $100. There was no other bidder at the sale, and the sum paid by Cocker was applied tq the costs. He received official deeds and went into possession. Afterwards, he presented a claim against the bankrupt estate for the full amount of the bonds. In his examination before the referee he testified that the houses rented for $53 a month; that their combined value was about $5,000; that he would have bid $5,500 at the sheriff’s sale in order to protect his mortgages; and that he was willing to. take now $6,500 for the property, as he had spent about $400 in improvements since the sale. He summed up his position very frankly by saying that he thought in fairness the bankrupt owed him about $500; but when the referee took him at his word, and reduced his claim to that sum, he declined to acquiesce and had the question certified.
.The allowance of the claim in full was resisted on the ground that only a small part, if any, of the debt was equitably due, and this contention was sustained by the learned referee (George E. Darlington, Esq.), who allowed only $500, as has already been stated. The pre-*583rise question now involved was recently decided by the Court of Appeals Cor the Third Circuit in Winter’s Appeal, 3 74 Fed. 55(5, and I refer to the opinion of the court in that case for the reasoning' that justifies the approval of the referee’s order. It may perhaps be advisable to call particular attention to the fact that both in Winter's Appeal and in the present controversy there was no competitive bidding-, and that the mortgage creditor was therefore not opposed in the process of transforming his interest from the ownership of a mortgage to the ownership of the fee. In neither case did the amount bid at the sale throw any light on the real value of the property, and in both cases the real value affirmatively appeared in the bankruptcy proceedings.
On the authority of Winter’s Appeal, the order of the referee is affirmed.