In re of Lightner

This is a petition to review, 11 U.S.C.A. § 67 , sub. c, an order of the Referee determining that the City of Fresno did not have a mechanics’ lien upon certain property of the bankrupt by reason of the notice of mechanics’ lien filed by it on August 11, 1959.

The facts relating to the transaction are clearly and with brevity stated by the Referee in the signed summary of evidence which accompanies the certificate. They are reproduced here:

The findings of a Referee must be accepted by the Court “unless clearly erroneous”. Federal Rules of Civil Procedure, Rule 52(a), 28 U.S.C.A., General' Bankruptcy Order 47, 11 U.S.C.A. following section 53.

Under the interpretation which the Courts of Appeals have placed upon these provisions, it is the duty of the District Judge to accept the Referee’s findings “except in plain cases”. In re Skrentny, 7 Cir., 1952, 199 F.2d 488, 492 ; In re Garden City Brewery, Inc., 2 Cir., 1953, 208 F.2d 377, 379 .

However this rule does not apply if there is absent substantial evidence to support a finding of the Referee or the Referee has drawn an erroneous legal conclusion from established facts. See In re Sandow, 2 Cir., 1945, 151 F.2d 807, 808 ; In…