Smith v. Federal Land Bank

An order made by a conciliation commissioner as referee was set aside and vacated by the district court sitting in bankruptcy. The farmer-debtors appeal. This court affirmed the decision of the district court in an opinion filed January 30, 1945, 147 F.2d 505 . The matter is now before us on a rehearing.

Appellant-debtors own a citrus grove. Appellee-creditors hold two trust deeds on the property securing notes executed by appellants. In September, 1937, appellants filed a petition under § 75, subs a-r, of the Bankruptcy Act, 11 U.S.C.A. § 203 , subs, a-r. The petition was approved by the court and the matter referred to a conciliation commissioner. A three-year extension proposal, 1 dated November 2, 1937, was submitted by appellants, accepted by the required majority of creditors, approved by the conciliation commissioner on December 14, 1937, and thereafter approved by the court.

Appellees filed a petition, dated January 13, 1941, for an order dismissing the § 75, subs, a-r, proceedings or authorizing them to have the power of sale in the trust deeds exercised. A hearing on the petition was held March 12, 1941.

On March 21, 1941, appellants’ attorney, Mr. Stone, wrote a…