CASES ADJUDGED

IN THE

SUPREME COURT OF THE UNITED STATES

AT

OCTOBER TERM, 1939

UNION JOINT STOCK LAND BANK OF DETROIT v. BYERLY.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT.

No. 579. Argued March 6, 1940.-Decided April 22, 1940. 1. Under § 75 of the Bankruptcy Act, prior to the amendment of August 28, 1935, an order of the bankruptcy court, made in a proceeding for composition and extension, and permitting a sheriff's sale to be made, subject to confirmation, under a decree of foreclosure previously entered in a state court, was erroneous if not granted on petition and after hearing and report by the conciliation commissioner, but was not void and could not be attacked collaterally in a state court. P. 7.

2. Jurisdiction of a state court in foreclosure, suspended by the institution of a proceeding under § 75 of the Bankruptcy Act, again. attached upon dismissal of the bankruptcy case and empowered the state court to confirm a foreclosure sale previously made and to order a sheriff's deed. P. 8.

3. Reinstatement under the Act of 1935, supra, of a proceeding under § 75 (s) previously dismissed, did not invalidate a sheriff's sale and deed which were confirmed and authorized by a state court acting within its jurisdiction during the interval between the dismissal of the bankruptcy case and the motion to reinstate it. P. 8. 4. There is no occasion to refer a cause under § 75 of the Bankruptcy Act to a conciliation commissioner for the administration of property which, by reason of foreclosure proceedings already consummated in a state court, no longer belongs to the debtor. P. 10.

106 F. 2d 576, reversed.

CERTIORARI, 309 U. S. 643, to review a judgment reversing the district court in bankruptcy which, in a proceeding under § 75 (s), denied rehearing of an order of disclaimer and refused to refer the cause to a conciliation commissioner.

Mr. Ralph G. Martin, with whom Mr. A. G. Masters was on the brief, for petitioner.

Messrs. Elmer McClain and William Lemke for respondent.

MR. JUSTICE ROBERTS delivered the opinion of the Court.

September 1, 1932, the petitioner instituted a mortgage foreclosure suit against respondent in the Common Pleas Court of Madison County, Ohio. The cause was prosecuted to judgment and advertisement was made of a sheriff's sale of the property to take place November 24, 1934.

November 19, 1934, the respondent filed his petition in the United States District Court under $ 75 of the Bankruptcy Act,' and the court issued an order restraining proceedings in the foreclosure suit until the further order of the court.

November 23, 1934, the District Court, on application of the petitioner, without reference of the matter to a conciliation commissioner, modified the restraining order to permit the sale of the premises as advertised but enjoined any further proceedings, particularly confirmation. of the sale or execution of sheriff's deed.

November 24, 1934, the sheriff, as permitted by the modification of the restraining order, held the sale as advertised. The petitioner bid the property in and the sheriff made return of the sale.

1 Act of March 3, 1933, c. 204, 47 Stat. 1467, 1470.

1

Opinion of the Court.

December 14, 1934, the District Court approved the respondent's petition under § 75 of the Bankruptcy Act and ordered a reference to a conciliation commissioner. The latter reported that no agreement could be reached between the respondent and his creditors.

February 11, 1935, the respondent abandoned proceedings under subsections (a) to (r) of § 75 and filed an amended petition to be adjudged a bankrupt pursuant to $ 75 (s).2

May 27, 1935, this court held certain features of $75 (s) unconstitutional. Louisville Joint Stock Land Bank v. Radford, 295 U. S. 555.

August 26, 1935, on the application of the respondent, the District Court ordered that, because of the unconstitutionality of 75 (s), the respondent's petition and amended petition be dismissed and that the case be terminated.

3

August 28, 1935, § 75 was amended to meet the decision in Louisville Bank v. Radford, supra. The Act, as so amended, provided in paragraph 5 of § 75 (s):

"This Act shall be held to apply to all existing cases now pending in any Federal court, under this Act, as well as to future cases; and all cases that have been dismissed by any conciliation commissioner, referee, or court because of the Supreme Court decision holding the former subsection (s) unconstitutional, shall be promptly reinstated, without any additional filing fees or charges."

September 10, 1935, the sheriff's sale was confirmed by the Common Pleas Court. Subsequently this action. was, on appeal by respondent, affirmed by the Court of Appeals of Madison County.

September 11, 1935, the sheriff's deed was delivered to the petitioner and was recorded.

2 Subsection (s) was added to § 75 by the Act of June 28, 1934, c. 869, 48 Stat. 1289.

* Act of August 28, 1935, c. 792, 49 Sat. 942.