Kalb v. Luce

The following opinion was filed May 17, 1938:

Rosenberry, C. J.

Upon this appeal the plaintiff contends that on and after September 6, 1935, when plaintiff’s petition in the bankruptcy court was reinstated, the county court of Walworth county was wholly without jurisdiction to proceed to confirm the sale held August 2, 1935, and to execute the judgment of foreclosure. Plaintiff’s contention arises under the amendment to section 75 of the Bankruptcy Act, enacted by congress August 28, 1935 (11 USCA, § 203 (n)), which is printed in the margin.1

*522 It is the contention of the plaintiff that this statute is self-executing, — that is, that it requires no application to- the state or federal court in which foreclosure proceedings are pending for a stay; in other words, that it provides for a statutory and not for a judicial stay. Plaintiff’s claims under the Bankruptcy Act present a question which clearly arises under the laws of the United States, and therefore present a federal question upon which determination of the federal courts is controlling.

• It has been held by the circuit court of appeals for the Ninth circuit, Ha-rdt v. Kirkpatrick (1937), 91 Fed. (2d) 875, that a stay provided for by section 75 (o) and section 75 (s), is a judicial stay and not a statutory stay. While the plaintiff in this action claims his rights under section 75 (n) the same reasoning applied in the Hardt Case leads to the same conclusion in this case. Under the amendment to section 75 of the Bankruptcy Act, the federal courts have consistently conformed to this conclusion. See cases cited, 11 USCA, p. 1004, under title “Foreclosure of Mortgage.” See In re Arend (D. C. Mich., 1934), 8 Fed. Supp. 211. The circuit court of appeals, Seventh circuit, held in In re Lowmon — La Fayette Life Ins. Co. v. Lowmon (1935), 79 Fed. (2d) 887, that the Bankruptcy Act could not be so construed as to extend the period of redemption which had expired according to the provisions of a state statute and if so construed it would be unconstitutional.

The defendant O’Brien seeks a review of that part of the order which holds that a cause of action for assault and battery is stated as to him. There is no allegation in the second cause, of action that the defendant O’Brien used any excessive force, or that he used more force than was reasonably *523 necessary to put the defendants Feuerstein in possession of the mortgaged premises and to execute the writ of assistance. It is claimed that the acts of O’Brien were wrongful because without warrant in law. This contention is based upon the same grounds upon which the other contentions were máde, — that is, that the court was wholly without jurisdiction to confirm the sale or to issue the writ of assistance. If as we hold the writ of assistance was validly issued then the allegations contained in the second contention with respect to assault and battery are insufficient.

By the Court. — Upon the appeal of the plaintiff that part of the order appealed from is affirmed. Upon motion to review of the defendant O’Brien, so much of the order as overrules the demurrer as to the second cause of action is reversed, and cause remanded for further proceedings according to law.

“(n) The filing of a petition or answer with the clerk of court, or leaving it with the conciliation commissioner for the purpose of forwarding same to the clerk of court, praying for relief under section 75 of this act, as amended (this section), shall immediately subject the farmer and all his property, wherever located, for all the purposes of this section, to the exclusive jurisdiction of the court, including all real or personal property, or any equity or right in any such property, including, among others, contracts for purchase, contracts for deed, or conditional sales contracts, the right or the equity of redemption where the period of redemption has not or had not expired, or where a deed of trust has been given as security, or where the sale has not or had not been confirmed, or where deed had not been delivered, at the time of filing the petition.

“In all cases where, at the time of filing the petition, the period of redemption has not or had not expired, or where the right under a *522 deed of trust has not or had not become absolute, or where the sale has not or had not been confirmed, or where deed had not been delivered, the period of redemption shall be extended or the confirmation of sale withheld for the period necessary for the purpose of carrying out the provisions of this section.” 11 USCA, § 203 (n).