In the Matter of Victor Builders, Inc., Debtor. Silver Gate Savings and Loan Association v. C. J. Carlson, Receiver and Trustee

The appellant appeals from an order of the district court remanding the case to the referee to conduct further hearings to determine whether there exists an equity in the subject real property in excess of the appellant’s lien.

Appellant holds a note in the principal amount of $115,000.00 secured by a trust deed on the subject property. In August, 1967, appellant started a non-judicial foreclosure under the trust deed, and on September 28, 1967, filed a complaint to enforce the terms of the trust and for the appointment of a receiver to collect the rents and profits. A receiver was appointed for the purpose of collecting rents and profits, and the appointment was confirmed by the state court on October 5, 1967.

Victor Builders, Inc., holders of the fee title, filed a petition for an arrangement under Chapter XI on October 25, 1967, and on March 15, 1968, the referee entered an order restraining appellant from proceeding with its non-judicial sale and from commencing a new proceeding seeking foreclosure.

The appellant raises two questions on this appeal: (a) can a bankruptcy court in a Chapter XI proceeding enjoin a nonjudicial sale of property, and (b) did the court err in…