Borchard

Appeal by the owners of real property from an order of the District Court in proceedings under Section 75, sub. s, of the Bankruptcy Act, as amended, 11 U.S. C.A. § 203, sub. s, authorizing appellees to proceed to foreclose or sell under trust deeds certain real property in Los Angeles County, California.

The appellants first brought their proceedings under Section 75 of the Bankruptcy Act in November, 1934. In May, 1935, an appraiser’s report was filed fixing the value of the real property here involved at $68,550. Thereafter, on June 26th, 1935, the original proceedings were terminated by reason of the décision of the Supreme Court in the case of Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555 , 55 S.Ct. 854 , 79 L.Ed. 1593 , 97 A.L.R. 1106 , involving the validity of the Act. In September, 1935, after the passing of the amendatory Act, the proceedings were reinstated, and the appellees were enjoined and restrained until further order of the court from selling or causing to be sold any of the appellants’ real property. The appellants were thereupon adjudged bankrupt under said Section 75, sub. s, and reference was made to the Conciliation Commissioner to act as…

On Petition for Rehearing.

Appellants have filed a petition for rehearing, contending that the case of John Hancock Mutual Life Ins. Co. v. Bartels, 60 S.Ct. 221 , 84 L.Ed. - (December 4, 1939), decided by the United States Supreme Court a few days subsequent to oitr decision in the instant case, holds contrary to our decision.

We have examined the Hancock case, supra, and do not agree with appellants’ interpretation of the case.

In the cited case the farmer had petitioned under Section 75 of the Bankruptcy Act, 11 U.S.C.A. § 203 , and the petition was referred to a conciliation commissioner. The usual proceedings were had, in which the farmer failed to effect the voluntary adjustment with his creditors, and the farmer petitioned to be declared bankrupt under Section 75, sub. s.

The principal creditor of the farmer moved the District Court to set aside the adjudication under Section 75, sub. s, and to dismiss the debtor’s petition, on the ground that the farmer was not entitled to avail himself of the provisions of that section since there was no reasonable possibility of financial rehabilitation. The District Court granted the motion to dismiss, and upon appeal to the Circuit…