Court Opinion

ID: 9636617
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:35:37.781508+00
Date Added: 2024-06-11T18:09:47.335648
License: Public Domain

SIBLEY, Circuit Judge
(concurring).
In the case of John Beverly Henderson, 5 Cir., 100 F.2d 820, the ■ farmer-debtor under Sect. 75 of the Bankruptcy Act had not been adjudicated a bankrupt. In the case of Benno Bartels, 5 Cir., 100 F.2d 813, he had been adjudicated. The present case falls directly under the latter decision, for Modena Wilson had been adjudged a bankrupt for about two years when the secured creditor on motion got a revocation of the adjudication and a dismissal of the proceedings. I persist in thinking the exposition of the law in the Benno Bartels case tobe correct. Section 74 and Section 75, 11 U.S.C.A. §§ 202, 203, are not to be construed together as composite legislation. Each is a separate scheme to be distinguished from the other. In Section 74 any person not a corporation, whether in or out of bankruptcy, may petition in good faith and obtain the provided relief. Subsection (?) provides for an adjudication in bankruptcy of the debtor if the proceeding was commenced or prolonged for the purpose of delaying creditors or delaying an adjudication, or if confirmation of his proposal is denied, except that in the case of a farmer he must consent to adjudication, Section 75 sets up a more elaborate organization, including conciliation commissioners, and it applies only to farmers. It contains several provisions which are repetitions of what was enacted in Section 74, but this only shows that the two are independent of one another and one includes nothing merely because it is in the other, Under Section 75 the farmer-debtor who fails to obtain the consent of his creditors to his plan of extension is not liquidated as of course, as the debtor under Section 74 (?) is, but Subsection (s) permits him without any conditions whatever to amend his petition and ask to be adjudged a bankrupt, When that is done he is a voluntary bankrupt, and comes under the general bankruptcy law, except as Subsection (s) has modified it. The main modification is that instead of surrendering all his property at once he may on request keep it upon terms fixed and supervised by the court íor *re? years’ with a view of rehabilitat*armer as such. He is still a bankrupt during the effort at rehabilitation. If he fails to keep the terms or it appears that he wjn not able to refinance himself in three years, or if rehabilitation fails because secured creditors pursuing their rights take the farm away, the rehabilitation of course fails, but the farmer is still in voluntary bankruptcy. A secured creditor cannot dismiss the proceeding on motion or set aside the adjudication. His right is, on sufficient grounds, to have his security abandoned to him if there is no equity for the estate, or to have the court sell it for him, or permit him to foreclose. The farmer and his other creditors. are entitled to go ahead in bankruptcy on this adjudication, and the bankruptcy case can be dismissed only after notice to creditors. As in the Benno Bartels case, so in this, the secured creditor, while he might have asked a release or a sale of his security by the court f°r the reasons he urged, had no standing 1° have the adjudication set aside and the case dismissed.
Nevertheless, in the circumstances here disclosed, this erroneous action did no one any harm. The secured creditor gets opportunity to foreclose on his security, There is no equity in it and no other estate, and no possible benefit to the slight unsecured indebtedness in continuing the bankruptcy. The debtor herself was dead and a discharge would do her no good, While the regular course would have been to abandon the- farm to the secured creditor, and to close the estate without a trustee because there are no assets, the course taken accomplishes the same thing. Because no injury was done anyone I concur in affirming the judgment.