Harris v. Zion Savings Bank & Trust Company/Dissent Douglas

Mr. Justice DOUGLAS dissenting.

Sec. 75, sub. r, 11 U.S.C.A. § 203, sub. r includes 'the personal representative of a deceased farmer' within the definition of 'farmer' as that term is used in the Act. Sec. 75, sub. n provides that in these proceedings 'the jurisdiction and powers of the courts, the title, powers, and duties of its officers, the duties of the farmer, and the rights and liabilities of creditors, and of all persons with respect to the property of the farmer * *  * shall be the same as if a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the farmer's petition, asking to be adjudged a bankrupt' was filed. Since that provision relates to the 'jurisdiction and powers' of the bankruptcy court as well as to the 'rights and liabilities' of creditors and 'of all persons' with respect to the property, I do not see how we can escape the conclusion that it incorporates § 8 of the Bankruptcy Act, 11 U.S.C.A. § 26. Practically identical provisions in old § 74, sub. m, dealing with compositions and extensions, were held to have that effect. In re Morgan, D.C., 15 F.Supp. 52. Cf. Benitez v. Anciani, 1 Cir., 127 F.2d 121. The function and purpose of § 74 and § 75 are comparable. No reason is apparent why a different result should obtain under § 75. Sec. 8 of the Bankruptcy Act states that death of a bankrupt 'shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died'. That section 'makes no exception or qualification; after the proceedings have been commenced they are not to be abated by death.' Hull v. Dicks, 235 U.S. 584, 588, 35 S.Ct. 152, 153, 59 L.Ed. 372. It has long been considered mandatory. Shute v. Patterson, 8 Cir., 147 F. 509; 1 Collier, Bankruptcy (14th Ed.) § 8.02. On death of a bankrupt where his personal representative succeeds to the personalty and his heirs to the realty, the proper procedure is to make them parties. Shute v. Patterson, supra, 147 F. page 512; Benitez v. Anciani, supra, 127 F.2d page 125. And see In re Schwab, 9 Cir., 83 F.2d 526. And the death of a bankrupt does not prevent his discharge (Collier, loc. cit.) at the instance of the administrator. In re Agnew, D.C., 225 F. 650.

If this had been an ordinary bankruptcy case there can be no doubt that the personal representative of this decedent would have been entitled to come in, that the heirs could have been joined, and that a discharge could have been obtained provided the requirements of § 14, 11 U.S.C.A. § 32 were met. The fact that the proceeding is under § 75 should not make a difference. Congress has specifically stated that a 'personal representative' of a farmer may employ the machinery of § 75. The offer of composition made by the decedent before her death might or might not have been accepted. But even though it were rejected, subsection a affords an alternative form of relief, one benefit of which is a discharge. § 75, sub. § (3); Wright v. Union Central Life Ins. Co., 311 U.S. 273, 61 S.Ct. 196, 85 L.Ed. 184. I think it clear that § 75 was designed to afford to the estate the opportunity to obtain these benefits. Those benefits may be just as considerable as they would be in ordinary bankruptcy. The fact that the heirs would be held at bay is no more significant in this instance than it is in other applications of § 8 of the Bankruptcy Act. To be sure, title to the property vests in the trustee in ordinary bankruptcy. But that circumstance has no relevancy to the scope of the jurisdiction of the bankruptcy court under § 75 which is in issue here and which we recently stated was 'exclusive', carrying with it 'complete and self-executing statutory exclusion of all other courts.' Kalb v. Feuerstein, 308 U.S. 433, 443, 60 S.Ct. 343, 348, 84 L.Ed. 370. Furthermore, Congress has not made participation of the personal representative dependent on authorization from the state probate court. Under old § 74 it did. Thus § 74 as amended by the Act of June 7, 1934, 48 Stat. 922, 11 U.S.C. 202a, 11 U.S.C.A. § 202a, an Act which also contained certain amendments to § 75 (48 Stat. 924, 925), included 'the personal representative of a deceased individual for the purpose of effecting settlement or composition with the creditors of the estate: Provided, however, That such personal representative shall first obtain the consent and authority of the court which has assumed jurisdiction of said estate, to invoke the relief provided' by that Act. No such qualification appears in § 75. Its absence there and its presence in § 74 clearly indicate that where Congress wished to curtail the power of bankruptcy courts over estates of decedents and to make the participation of a personal representative dependent on authorization from the state probate court, it said so. The view I urge would of course result in a collision between the Bankruptcy Act and state probate law. But that is no more important here than was the collision in Kalb v. Feuerstein, supra. In this case, as in other situations (In re Devlin, D.C., 180 F. 170, 172) it is the bankruptcy act not local probate law which must control the administration of the estate. The bankruptcy power is supreme. Sec. 8 is a valid exercise of that power. The result is that General Order 50(9), 11 U.S.C.A. following section 53, must give way insofar as it is inconsistent with this result. For those rules are intended merely 'to execute the act' (West Co. v. Lea, 174 U.S. 590, 599, 19 S.Ct. 836, 839, 43 L.Ed. 1098) not to 'authorize additions to its substantive provisions.' Meek v. Centre County Banking Co., 268 U.S. 426, 434, 45 S.Ct. 560, 563, 69 L.Ed. 1028.

Mr. Justice BLACK and Mr. Justice MURPHY join in this dissent.