Beet Growers Sugar Co. v. Columbia Trust Co.

GILBERT, Circuit Judge (after stating the facts as above). The appellant contends that under the statutes of the state of Idaho it is entitled to one year in which to redeem from the sale and that the right so given by the state law is a property right which will be enforced in the federal courts, citing Brine v. Insurance Co., 96 U. S. 627, 24 L. Ed. 858. It may be conceded that, if the right to redeem in the present case is conferred by the local statutory law, it will be recognized in a federal court. It does not follow that a federal court may by a state statute be deprived of any of its general equity powers. Guffey v. Smith, 237 U. S. 101, 114, 35 S. Ct. 526, 59 L. Ed. 856. The right so given by the statute of Idaho is a right incident to a sale of land on execution and to a sale on foreclosure of a mortgage. In the case of a mortgage the right does not come into existence until a foreclosure sale has been made. Here no foreclosure sale has been decreed or made. The receiver was appointed with the consent of the appellant, and the suit was converted into a general receivership to protect and determine the rights of all parties to the suit and to wind up the appellant’s affairs. To this procedure the appellant consented, and it made no objection to the allowance of the order for the enlargement of the powers of the receiver. No question can be made of the power of the court in such a ease to direct ■a receiver’s sale with or without redemption. It was so held in Hewitt v. Walters, 21 Idaho, 1, 119 P. 705, Ann. Cas. 1913C, 35. In that case the court said: “It is conceded that the statute of this state nowhere in express terms grants the right of redemption from a receiver’s sale.” The facts on which the right of redemption in that case was denied by the court were that the appellants had presented their claims in the receivership and asked that the same be allowed and that they be accepted as creditors of the corporation which was in the hands of the receiver, whereby they became bound by the judgment and orders in the receivership case, and, as the court said, they were subject to the court’s order directing the sale of the property without the right of redemption. Said the court: “The sale here being-made is not a sale on foreclosure but is a sale by the court’s receiver under direct authority and supervision of the court. The plaintiff has consented to and acquiesced in the order and decree, and is now bound thereby.” The appellant, by way of distinguishing that case from the case at bar, adverts to the fact that in the latter case it made objection in the court below to the proposed decree and the proposed order of sale by the receiver, but those facts, we think, do not affect the principle here involved. The controlling fact is that the appellant assented to the appointment of the receiver and the enlargement of his powers. In so assenting it must be held to have subjected itself to the orders and judgment of the court in the exercise of all its inherent powers in a receivership case. Here there was substantial reason why the sale should be made by a receiver rather than under a foreclosure sale of the mortgage, for personal as well as real property was in the hands of the court, which, as the court found, all comprised parts of a single working plant or utility, “to wit, a sugar factory in which each part was necessary to give value to the others, and where dismemberment of the system would greatly impair the usefulness or value of- its component parts.” There would have been no right to redeem the personal property from a sale of foreclosure. It is true that the eorppration here involved was neither a public nor a quasi public corporation, and does not come within the rule of the cases holding that as to such corporations a statute conferring a right of redemption Crom sales of real estate does not apply to sales of the entire property of a railroad company, a water company, a telegraph, telephone, or electric light and gas company, in which cases the [758] sale may be made as an entirety and without redemption. Hammock v. Farmers’ Loan & Trust Co., 105 U. S. 77, 26 L. Ed. 1111; Pacific Northwest Packing Co. v. Allen, 116 F. 312, 54 C. C. A. 648; Continental & Commercial Trust Co. & Savings Bank v. Corey Bros. Const. Co., 208 F. 976, 126 C. C. A. 64. But the reasoning which sustains the rule in that class of cases is not inappropriate to the present ease, for it is shown that to sell the real estate separately from the other properties involved in the present case would disastrously affect the interest of parties interested therein. The cogency of that reasoning' was recognized by the court in National Bank of Commerce v. Corliss, 217 Mich. 435, 186 N. W. 717, a ease which involved a creamery company’s property consisting of real, personal, and intangible values arising out of milk routes and farmers’ patronage. The appellant cites Locey Coal Mines v. Chicago, Wilmington & Vermilion Coal Co., 131 Ill. 9, 22 N. E. 503, 8 L. R. A. 598, where in construing the statute of Illinois providing for the redemption of real estate sold under execution judgment or decree of foreclosure of a mortgage, etc., the court held that the language was imperative and seemed to contemplate no exceptions, and that it was applicable to a sale under a creditor’s bill brought to enforce the collection of a certain judgment at law against a corporation. The court found distinguishing features of the ease in the fact that no personal property was involved, the severance of which from the real estate would materially impair the value or usefulness of the latter, and the fact that no question was involved of any public use or any public interest in the continued operation of the mines. The court said: “Every circumstance which may be held to take the ease out of the operation of the statutory mandate which requires judicial sales of real property to be made subject to the statutory right of redemption seems to be wanting.” In a later ease, however (Blair v. Illinois Steel Co., 159 Ill. 350, 42 N. E. 895, 31 L. R. A. 269), the same court sustained a sale of property in a suit to dissolve a corporation under an order which directed that the property be sold by the receiver without redemption, s The court distinguished the Locey Coal Mines Case by pointing to the fact that the sale there involved was one made simply under a decree upon a creditor’s bill to cover the collection of a judgment at law, or, in other words, was one for the payment of money, and that the creditor’s bill was to be regarded only as a species of process for the execution of a judgment at law, and observed that the statute upon which the decision in that ease was based had no application to a decree for the sale of real estate ordered to be made by the receiver in a suit in equity for the purpose of dissolving an insolvent corporation and closing up its business. The appellant, in the court below, objected to the confirmation of the sale on the ground that the purchaser, the Utah Idaho Sugar Company, was not a competent bidder and was without the right to become a purchaser at the sale for the reason that on October 3, 1923, in an action before the Federal Trade Commission, a judgment and restraining order were made and entered by the terms of which the said corporation and others jointly charged with conspiracy were commanded to cease forever and desist from combining or conspiring to maintain certain monopolies and prevent the establishment of sugar enterprises and the building of sugar factories by persons and interests other than the respondents in said proceeding, and from hindering or obstructing competitors or prospective competitors from engaging in the purchase of sugar plants and in the manufacture or sale of sugar in interstate commerce. It was objected that to permit the said corporation to purchase the appellant’s property was to violate the findings and judgment of the commission. The same objections are here urged as ground for reversing the decree of the court below. We can find nothing in the judgment of the Federal Trade Commission which disqualifies the Utah Idaho Sugar Company to become a bidder and purchaser at the sale. The fact of the purchase by that company could tend in no way to effectuate the things which it was restrained from doing by the judgment of the Commission. There is nothing to indicate that the purchaser at the sale was acting in combination with others or otherwise in violation of the terms of the Commission’s judgment. The corporation was forbidden to purchase land and erect factories “when such purchases or erections are not done in good faith.” There is no charge or finding here that the purchase was not made in good faith. The decree is affirmed.