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IN RE WILKINSON

March 6, 1935

In re WILKINSON


The opinion of the court was delivered by: BYERS

BYERS, District Judge.

This is a motion for an order dismissing the petition filed by the above named debtor under section 75 of the Bankruptcy Act (11 USCA § 203), made by Riverhead Production Credit Corporation, the holder of a chattel mortgage dated April 6, 1934, which has filed a petition praying that an order be issued dismissing the debtor's petition on the ground that the debtor is not a farmer within the meaning of the said section of the act; or, in the alternative, permitting the petitioner to take possession of and sell under the terms of the chattel mortgage all of the debtor's laying hens and cockerels said to be covered by the said chattel mortgage.

The principal question is whether the debtor is a farmer within the contemplation of the law.

 The question raised is serious enough to require careful consideration because in this district there are a great many persons engaged in raising poultry who classify themselves as farmers and, if the statute is not available to them, the reason for that conclusion should be made clearly to appear.

 Section 75 has to do with agricultural compositions and extensions and provides that a farmer may file a petition stating that he is insolvent or unable to meet his debts as they mature, and that it is desirable to effect a composition or an extension of time to pay his debts. Each petitions is to be accompanied by a schedule.

 Subdivision (r), § 75 (11 USCA § 203 (r) provides: "For the purpose of this section and section 74 [section 202], the term 'farmer' means any individual who is personally bona fide engaged primarily in farming operations or the principal part of whose income is derived from farming operations * * *."

 The debtor is the owner of twenty acres of land at Lake Grove, Suffolk county, N.Y., upon which are erected his dwelling house, barn, roadside stand and eight chicken houses, and about 5,000 chickens are being raised upon the property; the debtor is engaged in conducting the business of raising and selling said chicks and chickens and of selling eggs, and has been continuously so engaged for ten or more years last past; during half of each year the chickens wander over a portion of the premises and secure a part of their sustenance therefrom, and the debtor has raised upon four or five acres of the said premises rye, oats, cabbage, spinach, etc.

 The petitioner swears: That the said chicks or chickens during the said months of the year receive approximately 25% of their sustenance from the premises. Each year for a number of years past, deponent has raised crops of a similar nature for his chickens upon the said premises. That the only purpose for which deponent uses the said premises is as a chicken farm as aforesaid. That all of deponent's income is derived from the said farming operations.

 On the argument the objecting creditor stated that there is no issue of fact to be contested, and that the statements made by the debtor concerning the operation of his property should be deemed to be true for the purpose of the motion.

 The proceedings under section 75 are voluntary because the relief is sought either through the filing of a petition by the debtor or by an answer interposed by him to a petition in bankruptcy. For this reason it would seem that decisions under section 4 of the act (11 USCA § 22) which deny to a petitioning creditor the right to maintain involuntary proceedings against an insolvent "person engaged chiefly in farming or the tillage of the soil" would not be controlling on the question of whether a man is a farmer within section 75. A farmer may become a voluntary bankrupt, and it would seem to follow that one who may be fairly classified as such may file a petition under the latter section.

 Section 75, subd. (s) of the act (11 USCA § 203 (s), provides: "Any farmer failing to obtain the acceptance of a majority in number and amount of all creditors whose claims are affected by a composition or extension proposal, or if he feels aggrieved by the composition or extension, may amend his petition or answer asking to be adjudged a bankrupt. * * *"

 It is apparent, of course, that Congress had in mind certain special considerations which it thought should be extended to farmers; otherwise section 75 would not have been enacted, and debtors conducting farms would have been expected to take advantage of section 74 (11 USCA § 202), and consequently it cannot be said that any one who calls himself a farmer is automatically entitled to file under section 75.

 On the other hand, it is thought to be equally clear that, in determining the status of a petitioner, it is not necessary to be governed by the decisions made under section 4 which in many cases have resulted in dismissing involuntary petitions against those whose creditors have thought they were not within the scope of that section.

 In other words, if Congress had intended that only those who till the soil may file under section 75, it would have been ...


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