In re Wade ( 1943 )

KLOEB, District Judge.

The following orders of the conciliation commissioner are questioned on the petition for review:

(1) Order allowing claim of Ed S. Raydure and Maud Raydure Rogers, Executors of the Estate of Salina Raydure, deceased.

(2) Order appointing trustee.

(3) Order authorizing trustee to institute action against debtor and others to set aside alleged fraudulent conveyance and mortgage.

(1) As to the order allowing claim of Ed S. Raydure and Maud Raydure Rogers, executors of the estate of Salina Raydure, deceased, it would appear that this claim has been properly filed and allowed, that it is based upon a judgment of the Court of Common Pleas of Wood County, Ohio, and that no evidence was offered in support of the objections and no claim made that the amount as stated in the proof was not correct.

Therefore, the petition for review of this order is denied.

(2) As to the order appointing the trustee, there seems to be authority in Section 75, sub. n, Bankr.Act, 11 U.S.C.A. § 203, sub. n, for the appointment of a trustee, because that provision and General Order 50 (11), 11 U.S.C.A. following section 53, as pointed out in the certificate of the conciliation commissioner, make applicable, in a proper case, the general provisions of the Bankruptcy Act, where not otherwise provided in Section 75.

The argument of counsel for the debtor is that because there is no specific provision in Section 75 for the appointment of a trustee excepting the clause in Section 75, sub. s(3), providing for the appointment of a trustee upon liquidation, there is no authority for the appointment of a trustee. It has been held that a farmer-debtor who has filed a case under Section 75 is entitled to a discharge under the provisions of the General Bankruptcy Act (In re Gammill, D.C.Ill.1942, 45 F.Supp. 238), although there is no provision for a discharge in Section 75 except that in Section 75, sub. s(3), which provides for discharge after redemption, and in the case of Federal Land Bank v. Nalder, 10 Cir., 1941, 116 F.2d 1004, it was held that under the provisions of Section 75, sub. n, the bankrupt was entitled to a discharge under the general provisions of the Bankruptcy Act, although his rehabilitation had failed.

In the case of Armold v. Equitable Life Assurance Society, 7 Cir., 1936, 83 F.2d 530, it was held that the District Court had the power to appoint a receiver under Section 75, by reason of the provision of Section 75, sub. n, among others, although there is no specific provision in Section 75 for the appointment of a receiver.

It was also held in the case of In re Casaudoumecq, D.C.Cal.1942, 46 F.Supp. 718, that the Bankruptcy Court had the power to appoint a receiver in a Section 75 case to preserve and protect the rights of creditors and to look after the interests of the debtor.

In the case of Federal Land Bank v. Morrison, 6 Cir., 1943, 133 F.2d 613, the Court held in a Section 75 case that if the order appointing a receiver for the mortgaged realty was valid, it was governed by the provisions of the General Bankruptcy Law and General Orders in Bankruptcy.

In the case of In re Pfister, 7 Cir., 1941, 123 F.2d 543, affirmed under the title of Pfister v. Northern Illinois Finance Corp., 317 U.S. 144, 63 S.Ct. 133, 77 L.Ed. 146, it was held that under the provisions of Section 75, sub. n, and G.O. 50(11), the provision in Section 75, sub. s, as to time for taking an appeal was not exclusive, but that it was governed by Section 39, sub. c, of the General Bankruptcy Act, 11 U.S. C.A. § 67, sub. c.

(3) As to the order authorizing the trustee to commence a suit against the farmer-debtor and others for the purpose of setting aside an alleged fraudulent conveyance made to his brother and a mortgage made by the debtor upon farm property not scheduled in this case, it would seem a sorry state of affairs if a farmer debtor could convey or mortgage all of his property, other than the farm upon which he lived, to a relative or member of his family, then refinance the farm by taking it over at the appraised value and obtain a discharge from all of his debts, and leave the balance of his creditors without any remedy to set aside such conveyance by action instituted by the trustee for their benefit. There does not seem to be any good reason why the provisions of Section 75, sub. n, do not make applicable the provisions of the Bankruptcy Act with reference to a matter of this kind.

The petition for review as to the orders appointing the trustee and authorizing the trustee to commence action against the debtor and others is denied.

The findings and conclusions of the commissioner in his certificate are adopted as the findings and conclusions of the Court.