« ForrigeFortsett »
Opinion of the Court. 317 U. S.
praised property in the hands of the debtor and fixing rentals therefor, staying judicial proceedings, selling perishable property, directing reappraisals and final sale of the estate. It is obvious that this proviso, couched in terms of appeal, could not have been intended to control the review of the manifold activities of a commissioner engaged in handling an estate through three or more years of bankruptcy. To hold the proviso generally applicable would leave unregulated reviews of orders entered more than four months after the commissioner approves the appraisal. The section applicable to these reviews is § 39(c)*
II. The petitions for review of the Commissioner's orders of August 13, 1940, and September 7, 1940, which were filed November 28, 1940, and October 9, 1940, no extension having been granted, were out of time under § 39 (c)5 unless, in accordance with the petitioner's con
* The legislative history of the proviso indicates the soundness of this conclusion. It appears first in the earlier subsection (s), 48 Stat. 1289, which was held unconstitutional in Louisville Joint Stock Land Bank v. Radford, 295 U. S. 555. The preceding provisions were substantially the same as the present ones but the proviso read "That in case of real estate either party may file objections, exceptions, and appeals within one year from date of order approving appraisal." The specification of real estate, of course, excluded the proviso from any generality of scope. When the section was amended after the Radford case, the committee reports treated the paragraph of (s), as quoted in note 3, separately from the succeeding numbered paragraphs and the language connotes the idea that the proviso relates only to appeals from the appraisal. The comment is as follows: "It provides that the referee, under the jurisdiction of the court, shall designate and appoint appraisers, to appraise all of the property of the debtor, at its then fair and reasonable market value. The appraisal is made in all other respects, with rights of objections, exceptions, and appeals, in accordance with the Bankruptcy Act; and either party may file objections, exceptions, or take such appeals within 4 months. Surely there is no question of constitutionality up to this point." S. Rep. No. 985, 74th Cong., 1st Sess., p. 3; H. Rep. No. 1808, 74th Cong., 1st Sess., pp. 3-4.
5 See note 2, supra.
144 Opinion of the Court.
tentions, the time for review was to run from the entry of the orders of the Commissioner denying the petitions for rehearing of the order of August 13, which petition was filed September 16,1940, and of the orders of September 7, which petition was filed September 20,1940. These orders of the Commissioner denying the petitions for rehearing were entered November 28, 1940, and September 30, 1940.
Where a petition for rehearing of a referee's order is permitted to be filed, after the expiration of the time for a petition for review, and during the pendency of the bankruptcy proceedings, as here, they may be acted on,6 that is, they may be granted "before rights have vested on the faith of the action," and the foundations of the original order may be reexamined. Wayne Gas Co. v. Owens-Illinois Co., 300 U. S. 131, 137.7 When such a petition for rehearing is granted and the issues of the original order are reexamined and an order is entered, either denying or allowing a change in the original order, the time for review under 39 (c) begins to run from that entry. Bowman v. Loperena, 311 U. S. 262, 266; Wayne Gas Co. v. Owens-Illinois Co., 300 U. S. 131, 137-8. The reason for taking the later date for beginning the running of the time for review is that the opening of the earlier order by the court puts the basis of that earlier order again in issue. A refusal to modify the original order, however, requires the appeal to be from the original order, even though the time is counted from the later order refusing to modify the original. An appeal does not lie from Opinion of the Court. 317 U. S.
8 See the discussion in division III of this opinion.
7 Where a petition for rehearing is filed before the time for a petition for review has expired, it tolls the running of the time, and limitation upon proceedings for review begins from the date of denial of the petition for rehearing. Morse v. United States, 270 U. S. 151, 153-4; United States v. Seminole Nation, 299 U. S. 417, 421; Gypsy Oil Co. v. Escoe, 275 U. S. 498.
the denial of a petition for rehearing. Conboy v. First National Bank, 203 U. S. 141, 145; Bowman v. Loperena, 311 TJ. S. 262,266; Brockett v. Brockett, 2 How. 238; Roemer v. Bernheim, 132 U. S. 103; Jones v. Thompson, 128 F. 2d 888; Missouri v. Todd, 122 F. 2d 804.
On the other hand, where out of time petitions for rehearing are filed and the referee or court merely considers whether the petition sets out, and the facts—if any are offered—support, grounds for opening the original order and determines that no grounds for a reexamination of the original order are shown, the hearing upon or examination of the grounds for allowing a rehearing does not enlarge the time for review of the original order. This result follows from the well-established rule that where an untimely petition for rehearing is filed which is not entertained or considered on its merits the time to appeal from the original order is not extended.8
If a consideration of the reasons for allowing a rehearing out of time which are brought forward by the petition for rehearing were sufficient to resurrect the original order, the mere filing of an out of time petition would be enough. Of course, the court must examine the petition to see whether it should be granted. Indeed the examination given a motion to file such a petition might just as well be said to justify the advancement of the time for review. It is quite true that in a petition for review upon the ground of error in law in the original order, the examination of the grounds of the petition for rehearing is equivalent to a reexamination of this basis of the original decree. But in such a case the order on the petition for review would control. It would show either a refusal to allow the petition for rehearing or a refusal to modify the
8 Bernards v. Johnson, 314 U. S. 19, 31; Bowman v. Loperena, 311 U. S. 262, and cases cited; Chapman v. Federal Land Bank, 117 F. 2d 321, 324.
144 Opinion of the Court.
original order. Cf. Wayne Gas Co. v. Owens-Illinois Co., 300 U. S. 131, 137-38. Whether time for appeal would be enlarged or not would depend upon what the order showed the court did.
In the present case it is quite plain the denial was grounded upon a failure of the petitions for rehearing to establish adequate grounds for the reexamination of the original orders. The petition for rehearing of the order of August 13, relating to rent, sought to produce evidence that the rental fixed was too high, raised a question of law that a full three years stay was not allowed and alleged a lack of representation by counsel. A motion to dismiss the petition for rehearing as out of time was denied. The Commissioner examined the petition for rehearing and determined that the debtor had had full opportunity to present his evidence at the hearing and that the stay was in accordance with the debtor's motion and that counsel for the debtor appeared at each hearing and knew of each order. He therefore concluded "that there is no equity or merit in the petition for rehearing" and denied the petition. The petition for rehearing of the orders of September 7 was similarly handled. They were orders for sales of perishable property, § 75 (s) (2), stipulated to be perishable by counsel for the debtor. Rehearing was sought because of lack of representation by counsel and lack of notice of the orders. The Commissioner's decision on the petition for rehearing sets out the record facts showing representation and notice. We therefore conclude that the Commissioner did not reexamine the basis of any of the original orders and that time for filing the petitions for review was not extended.
III. Since the petitions for rehearing, in our opinion, did not extend the time for review, we are brought to examine the question as to whether § 39 (c), supra note 2, is a limitation on the power of the District Court to act
Opinion of the Court. 317U.S.
or on the right of a party to seek review. Courts of bankruptcy are courts of equity without terms. Commissioners, like referees, masters and receivers, supervise estates under the eyes of the court with their orders subject to its review. The entire process of rehabilitation, reorganization or liquidation is open to reexamination out of time by the District Court, in its discretion, and subject to intervening rights. Cf. Wayne Gas Co. v. Owens-Illinois Co., 300 U. S. 131, 137; Bowman v. Loperena, 311 U. S. 262, 266.
Prior to the adoption of 39 (c), General Order in Bankruptcy No. XXVII,9 now abrogated,10 governed review of referees' orders but it prescribed no time limitations. It was held that petitions should be filed within a reasonable time.u Some local court rules therefore specified time limitations. Where such rules imposed definite limits on the time within which a petition for review could be filed, with extensions to be granted on cause shown, out of time petitions nevertheless were entertained and considered if cause was shown.12
Section 39 (c) was intended to establish definitely and clearly the proceeding for review of a referee's order in the interest of certainty and uniformity but the legislative history reveals no intention to change the preexisting rule as to power.13 Indeed, the Chandler Act by the amend
9172 U. S. 662.
"Abrogated January 16, 1939, effective February 13, 1939. 305 U. S. 681.
11 American Trust Co. v. W. S. Doig, Inc., 23 F. 2d 398; Crim v. Woodford, 136 F. 34; Bacon v. Roberts, 146 F. 729; In re Grant, 143 F. 661; In re Foss, 147 F. 790. 8 Remington on Bankruptcy (5th Ed. 1942) § 3704.
12 In re Oakland & Belgrade Silver Fox Ranch Co., 26 F. 2d 748; In re T. M. Lesher & Son, 176 F. 650; Amick v. Hotz, 101 F. 2d 311; In re Wister, 232 F. 898, affirmed 237 F. 793; see Roberts Auto & Radio Supply Co. v. Dattle, 44 F. 2d 159.
13 H. Rep. No. 1409, 75th Cong., 1st Sess., p. 11; Committee Print, H. R. 12889,74th Cong., 2d Sess., 149-50.