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Noble v. Hopewell Nat. Bank

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


August 10, 1938

NOBLE ET UX.
v.
HOPEWELL NAT. BANK ET AL.

On Rehearing.

After rehearing we will consider but one issue presented by the case at bar, which we think is dispositive.

The original petition of the farmer-debtors was filed upon April 7, 1937. It was dismissed by the District Court upon the ground that the petitioners were not farmers within the meaning of subsection (r) of Section 75 of the Bankruptcy Act as amended, 11 U.S.C.A. § 203(r). No appeal was taken from the decree of dismissal. A second petition was filed by the farmer-debtors upon July 26, 1937. Thereupon the District Judge entered an order upon the two petitions requiring certain persons named therein, including the appellees, to appear and show cause why the petitions should not be approved and enjoining any interference with the property of the debtors pending the determination by the court of the issues presented by the rule to show cause. After argument upon the return day of the rule, the District Court entered a decree dismissing the second petition and denying reconsideration of the original petition. Upon application to the District Court, an order was entered by the District Judge allowing an appeal from the decree referred to.

Did the allowance of the appeal by the District Court give this court jurisdiction of the appeal?

In neither petition did the appellants ask to be adjudged bankrupts pursuant to the provisions of subdivision (s) of Section 75, 11 U.S.C.A. § 203(s). The appellants contend, however, that the order of the District Court from which the appeal was taken assimilates to an order adjudicating or refusing to adjudicate a petitioner to be a bankrupt, appealable as of right under the provisions of Section 25a of the Bankruptcy Act as amended, 11 U.S.C.A. § 48(a). The appellees contend that the order appealed from is an order entered in the course of "proceedings" in bankruptcy and an appeal may be allowed only by this court upon the exercise of its discretion pursuant to the provisions of Section 24b of the Bankruptcy Act, 11 U.S.C.A. § 47(b). Meyer v. Kenmore Graville Hotel Co., 297 U.S. 160, 56 S. Ct. 405, 80 L. Ed. 557.

Subsection (n) of Section 75 of the Bankruptcy Act, 11 U.S.C.A. § 203(n), provides that upon the filing of a petition with the clerk of the court by the farmer debtor praying for relief pursuant to the provisions of Section 75, the farmer and all his property shall be immediately subject to the jurisdiction of the court. When the petitions in the case at bar were filed, proceedings in bankruptcy were then instituted and the debtors and their property immediately became subject to the jurisdiction of the court below. Had the petitioners prayed that they be adjudicated bankrupts, the provisions of the second paragraph of subsection (n) would have been applicable and the jurisdiction of this court would have been the same "as if", to quote the words of the Statute, "a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the farmer's petition, asking to be adjudged a bankrupt, was filed with the clerk of court * * * ". A convicing argument could then have been made to the effect that the order dismissing the petitions was appealable under Section 25a of the Bankruptcy Act, it being in the nature of a judgment refusing to adjudge the appellants bankrupts. Cowherd v. Phoenix Joint Stock Land Bank, 8 Cir., 94 F.2d 329. By alalogy, see, also, O'Connor v. Mills, 300 U.S. 26, 57 S. Ct. 381, 81 L. Ed. 483.

In view of the fact, however, that the appellants have not sought to be adjudged bankrupts, it is difficult to see how a dismissal of the petitions may be deemed to be the equivalent of a refusal to adjudicate them bankrupts.

We are of the opinion therefore that the appeal is not one from the order refusing to adjudge the appellants bankrupts or the equivalent thereof, but is an appeal from an order made in proceedings in bankruptcy. Raentsch v. American Co., 9 Cir., 82 F.2d 770. Therefore, in view of the fact that the appeal was allowed by the District Judge and not by order of this court, this court is without jurisdiction to entertain the appeal which, accordingly, is dismissed.

19380810

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