In Re George Roger Easton and Elsie M. Easton, Debtors. Otoe County National Bank v. George Roger Easton and Elsie M. Easton

MAGILL, Before BOWMAN and Court found that debt- Judges, HANSON, Circuit Senior ors “derived a minimal income from the Judge.* District 1986,” sale cattle in and that vast “[t]he majority of income [debtors’] [in 1986] BOWMAN, Judge. Circuit derived from the cash rent of their real In this case we must decide whether the security.”3 estate and social While the conferring courts below erred in statutory Bankruptcy Court found that “not more pur- appellees percent status than 50 income arose [debtors’] suant to 11 (Supp. payments U.S.C. V from the rental received from 1987). (credi- County [Easton], Otoe National Bank together Rick with the cattle in- tor) appeals judgment come,” from a final it ruled rental that “all the income affirming District payments Court1 both the Bank- rent debtors received [ie. ruptcy George Court’s2 determination that from both Rick Easton and ... Ritz] (debt- Roger Easton M. pur- and Elsie Easton are considered income for [sic] ors) test,” meet the poses meeting eligibility definition of “fami- the farm * HANSON, Melloy, The HONORABLE WILLIAM C. Sen- 2. The Honorable Michael J. Chief Unit- Judge ior United States District for the Northern Bankruptcy Judge ed States for the Northern Iowa, sitting by desig- and Southern Districts of District of Iowa. nation. Easton, (Bankr.N.D. O’Brien, 1.The Honorable Donald E. Chief Unit- 1987), (N.D.Iowa 1988). aff’d, 104 B.R. 111 Iowa Judge ed States District for the Northern Dis- trict of Iowa. year Hearing gross the relevant Transcript of November source, agreed. particular namely, “from Cred- from a and the District Court ruling appeal. challenges farming operation.” syntacti itor such From a view, point of identification of the ante cal “[o]nly provides that The Code phrase “such” in the cedent of the word regular annual income family farmer with farming operation” admits of “from such chapter 12.” 11 may under be debtor may it refer to the farm possibilities: two 109(f) 1987). (Supp. The Code V U.S.C. § immediately ing operation in the described farmer,” part, in relevant defines (“a farming the statute preceding clause of as follows: operation operated by” or the indi owned spouse engaged ... individual and [An] spouse) it refer to the vidual and in farming operation aggregate whose opening farming operation described in the $1,500,000 and not do not exceed dеbts (a farming operation the statute clause of percent aggregate of whose less than 80 “engaged by spouse). in” the individual and noncontingent,' liquidated debts ... disposition in it is To render our this case filed, the date the case is arise out necessary that we choose between not operated by owned or constructions,5 the courts these below ... such individual and spouse, and ... “family farmer” status granted debtors spouse and receive such individual from satisfied without to whether debtors operation such than 50 more statutory benchmarks with either of these percent of such individual and ... respect crop-production enterprise spouse’s gross for the income taxable underway on the 290 -acres debtors had in year preceding year the taxable which Rather, Larry leased to Ritz. the courts concerning ... sucb individual ease appropriate to treat as below found it spouse filed. and 101(17)(A) income the rent debtors re 101(17)(A) 1987) (em- (Supp. 11 U.S.C. V Larry in ceived from Ritz 1986 based on added). mentioned, phasis As the courts what the courts below refer to as the “to meet the below found that debtors do not tality of the circumstances” test articulated 101(17)(A) of for the opinion in Judge Cudahy’s separate in (1986) year test unless the rent re- (7th Armstrong, 812 F.2d 1030-31 Larry ceived from Ritz is treated as income Cir.) (opinion concurring in and dis legally capable satisfying require- denied, cert. senting part), 484 U.S. treating ment. Wе hold that in so the rent (1987).6 108 S.Ct. 98 L.Ed.2d 248 Larry debtors received from Ritz4 the applied courts an below erroneous standard In Armstrong, a divided panel of the of law. Appeals Court of for the Seventh Circuit that, 101(17)(A), involuntary an held the context of Under section order for an against spouse qualify action filed a debtor individual and as a “fami- (1982), ly they among things a creditor under 11 other must U.S.C. § fifty percent have received more than cash rent a debtor receives from a tenant Ritz, text, Larry reading though 4. Debtors received rent in 1986 from we have outlined in the it Ritz, Farm, Triple entity Ed through and J an latter does not seem to us that the resolution of the Larry particular reading. Ritz conducts business. case turned on that See 15, 18, 20, 33; (In McNeаl), Appendix Transcript May Federal Land Bank v. McNeal re below, (11th Cir.1988). Hearing at 3. The courts 848 F.2d 170 parties argument, in their briefs and at oral Easton, ("This 6.See In re 79 B.R. at 838 Court refer to the rent debtors received from each of believes, however, approach the better reasoned collectively these sources as rent received from represented by minority opinion paid simplicity’s Ritz. For sake we Easton, case.”); at 112 Armstrong usage continue this here. ‘totality (“[T]he embraces court Appeals 5. No Circuit Court of has been called approach the bank- taken circumstances' explicitly particular ques- ruptcy wholeheartedly agrees to resolve court ... Appeals rejection tion. The ap- Court of for the Eleventh with the court’s appears parsed proach majority Circuit to have in a taken in In re Arm- possible strong. fashion consistent with the second comparative merits of the “risk” versus the not income of land is farmer for the lease “totality of the circumstances” tests such a farming operation because from a seriously Armstrong context—and we to the risk expose the debtor lease does whether there is warrant for of some natu- doubt non-payment in the event concept importing either into construc- crops being produced on calamity to the ral facially unambiguous Judge of the Code’s at 1028-29. tion аcreage. leased Id. hand, treat definition of “farmer”8 —we do not consid- would Cudahy, on the other appropriate in the from a farm- er either test determina- rent income received cash money an individual receives totality of the cir- tion whether ing operation if given source is income “from such shown that “the cumstances it could be farming operation” meaning within the integral part land rental was [debt- 101(17)(A). In As we said earlier in farming operation.” Id. at 1031. have § or’s] bar, opinion, inquiry requires not- this this courts to Bankruptcy at Court the case acreage identify engaged those activities in that have owned their ed debtors past operated by claiming in have them- or owned or sоmeone forty years and land,7 “engage[d] are farmer” status and then selves farmed the is, farming operation, that to determine whether that individual re- a traditional cattle,” fifty percent the ma- ceived more than of his or her raising of and have debts gross perceived year it to “arise out of income the relevant from jority of which Easton, example, those activities. For in our family operation.” view totality entirely possible on the it is that the cash rent 79 B.R. at 838. Based circumstances, Armstrong Bankruptcy Court received from his tenant farmer these properly that the rent debtors received could be characterized as concluded 101(17)(A) there applicable from Ritz is towаrd satis- income because § 101(17)(A)’s require- suggesting Armstrong that faction of income some evidence § engaged crops in the cultivation of on the ment. The District Court endorsed signifi- acreage. analysis particularly Armstrong, and found it leased See 812 F.2d conceivably proper lose 1027. The characterization of cant that debtors could turns, however, upon any their farm if were to insist that Rick that income not pay Armstrong might financially non-payment Easton his rent when he is risk of have faced, upon particu- to at the time make nor the universe of the unable do so and same creditor, surrounding Arm- payment on his loan to secured lar circumstances situation, Easton, strong’s 150 acres of debtоrs’ financial rather land. 104 but upon B.R. at 112. the extent to which the income question bears relation to his Armstrong court was called prescribed by activities the words of the proper determine the characterization of statute. payments rent cash received a debtor against involuntary ‍​​​‌​‌‌​‌‌‌‌​‌​‌​‌​​‌​​‌​‌‌‌‌‌‌‌​​‌‌​‌​‌​​‌​​‌‌‌‍bankruptcy Bankruptcy whom an We believe the Court’s analysis readily case is filed under 11 no U.S.C. admits of discernible 303(a) involuntary limiting principle, case cannot be com- and would if followed § “farmer,” against 101(17)(A)’s menced defined lead to the evisceration of § “person requirement. as a example, long Code that received more than income For so percent person’s gross 80 of such as an individual tended some or livestock farming operation crops, permitted, ... from a owned or raised some he would be operated by person.” Bankruptcy analysis, such 11 U.S.C. under Court’s 101(17)(1982)(now 101(17)(A) codified at 11 U.S.C. count as income all rents he § 101(19) 1987)). farmers, (Supp. V Whatever the received from tenant however George expo- Easton testified that he rented out his 8. To the extent that considered concept dollar-per-acre sure to "risk” a relevant in its definition cultivable land on a basis in "farmer," by prescrib- of ing it articulated as much acreage 1986 and that he had this owning operat- that it attendant is risk Transcript May "custom farmed" in 1984. ing that serves to distin- Hearing at 6. guish statutory non-statutory incоme. 101(17)(A)’s raising specifically designed

minimal his income from livestock in- (indeed, crops perhaps without preclude. come See garnered any (1986) (remarks whether he income from Cong.Reg. 9985 of Sen. all, those activities at for in this case the McConnell). fact, recently In we have re- Bankruptcy Court found debtors have that jected such a result in the context of a basically farming), long, retired from so corporate seeking “family debtor it could be said that the individual lived on 101(17)(B). Wargo status under Tim See acreage the land and rented out in an ef- Sons, Equitable & Inc. v. Assurance Life generate fort to sufficient income to ser- (In Sons, Inc.), Society re Wargo Tim & Indeed, vice farm debt. (8th Cir.1989). 869 F.2d 1128 rulings very Court’s case illustrate earlier, As we noted the District Court indeterminacy approach, of its for it significant found it ar- debtors’ lease justified first the inclusion as § was, rangement with Rick Easton in theo- paid income the rent debtors Rick Ea- risk-free, ry, since receipt of rent from and, expansively, ston later and more Rick could failing Easton result in his Ritz, paid by Larry rent them on the obser- payment creditor, make on his loan from engaged vation that “have debtors been might then elect to exercise its upon have lived the farm for rights against debtors’ land. Whether this years.” over 79 B.R. at 838.9 reasoning provides a sufficient basis for Further, reject proposition, we counting 101(17)(A) as income the rent § apparently by relied on debtors received frоm Rick Easton—an is- Court, renting that the simpli out of land Bankrupt- sue we need not decide since the “farming,” citer constitutes by and hence cy Court that found debtors do not meet definition, statutory “farming operation.” a more-than-fifty-percent requirement (citing proposi See at 838 for this counting without paid by Larry the rent Welch, (Bankr.S.D. tion In re 74 B.R. 401 surely it a sequitur is non to con- Ritz— 1987), Ohio upon which relied in turn clude that the rent debtors received from definition of “to farm” found in Black’s Larry 101(17)(A) Ritz is therefore also § Dictionary). Law say renting To that the income. Since Ritz had not obtained “farming” out of land is does not seem to a loan from creditor secured land square us to with the statute since all of its pledged by guaran- debtors or otherwise operative other pro terms describe active fashion, teed in any them their rental duction of farm commodities or active arrangement with him could not have car- working of suggests the land. This to us ried within itself the potentiality same dire “farming” that is to be understood in its posited by the respect District Court with ordinary usage, and not in the strained arrangement to their rental with their suggested by sense renting Welch. If the grandson. of land “farming operation” constitutes a question While the 101(20), proper as defined inter- then an owner of § pretation 101(17)(A) land, is one of first whether or not he raises crops § or Circuit, impression in any livestock, approach tends we would be able to claim opiniоn take in this prece- the rent he is not without receives from his tenant farm 101(17)(A) example, ers as dent. For income. Lay’d We doubt that Dakota § Chapter Eggs, (Bankr.D.N.D.1986), erected B.R. 648 premise. question 101(17)(A) This construction of was whether debtor was a “farm- § permit would those er” who rent out under the Code in the farmland context of a but who have no pro involuntary connection with the creditor-filed bankruptcy ac- duction crops tion; or conceivably inquiry required livestock to the court to gain statutory “family status, determine whether debtor received various possibility proponents which the Chapter items of income “from a Indeed, analysis on this there occupation, long would seem some other so as he continued little reason not to include as § in- to do some and took on the non-farm salary might come the an employment individual earn in in an effort to service farm debt. place principal reliance on In re 11 U.S.C. Debtors operated” by it. owned (S.D.Iowa 1988), (now Jessen, 101(17)(1982) at 11 U.S.C. 82 B.R. 490 and In codified 1987)). (Bankr.S.D.Ohio 101(19) Welch, The court stated (Supp. V 74 B.R. 401 re de inquiry 1987), as follows: support the relevant of the result reached be “[T]he made ... must be termination explained why We have we believe low. from its own is derived income court’s treatment of cash rent [debtor’s] the Welch opposed production efforts square not with the statute. does Jessen ‍​​​‌​‌‌​‌‌‌‌​‌​‌​‌​​‌​​‌​‌‌‌‌‌‌‌​​‌‌​‌​‌​​‌​​‌‌‌‍production efforts of farming or case and application of the Burke but test Applying this Id. at 656. others.” is, discussed, just thus as we have income, claimed item of separately to each helpful position. also to debtors’ Debtors statutory to treat as the court declined (Bankr.D.N.D. Paul, cite In 83 B.R. 709 re received from sale income sums debtor (Bank.D. 1988), Rott, and In re 73 B.R. 366 from flocks neither eggs which came N.D.1987), support eligibility of their managed by it. In In re owned nor Guin per Chapter Again, 12 relief. we are not (Bankr.D.Mont.1987), nane, 73 B.R. 129 helpful suaded that either is to debtors’ 101(17)(A),the court decided under case “plainly case. In the evidence dem Paul item of in a controverted characterized grain produc that the debtors’ onstrate^]” because, аmong other farm income come as operation generated tion sufficient income party third things, it was “not derived from 101(17)(A)in satisfy year. the relevant efforts, efforts.” from the Debtors’ but Rott, In 83 B.R. at 712. as Burke and Haschke, 77 B.R. 223 132. In In re Id. at Jessen, credited cash rent re the court (Bankr.D.Neb.1987), declined to the court ceived debtors toward satisfaction of 101(17)(A)income cash rent debt treat as § because, among other had received ors arrangement perceived it the rental to be “no evidence of the things, the court found temporary. 73 B.R. at 373. As we have farming in the debtors’ involvement noted, just is consideration property.” at 225. And we read In re Id. relevant, renting debtors’ out of their cul 1987), Burke, (Bankr.S.D.Iowa 81 B.R. 971 acreage tivable here cannot be character by parties, cited to us both to stand a case us, ized, temporary. on the record before as proposition rent a re for the that debtor case, present Debtors in the as the lower crop ceives for use of land under a share recognized, engaged raising courts 101(17)(A) arrangement proper is § raising of livestock in 1986. The of live- significant plays when the debtor a role “farming operation,” plainly stock is a see farming acreage.10 re the leased InCf. 1987),11 101(20) (Supp. 11 U.S.C. V and Martin, (Bankr.D.Mont. § activity any money they received from that 1987) (money cutting debtor receives 101(17)(A) qualifies income. the as On marketing hay grown § and on another’s record, however, present state of the we 101(17)(A)income). land is The theme § any cannot determine whether debtors bear the existence of common to these cases is 101(17)(A) “farming opera- relation to the indicia of involvement on the of some tion,” is, “production raising activity that to the the debtor in the taking crops” place of on the 290 acres generates the income he seeks to have Larry Although the Bank- by of the income rented Ritz. credited toward satisfaction 101(17)(A). money requirement ruptcy of Court characterized the debt- farming, received a tive it cannot be said that their cessa- 10. Burke also states: "Income arrangement acreage Larry cash rent will be farm incоme in tion from leased to the case of an individual or individual and temporary. Ritz is spouse only past the evidence reveals that if have been more than short activities 101(20) "‘[F]arming opera- 11. Section reads: sporadic term or and that cessation of farm- soil, farming, tillage dairy of tion’ includes ing temporary." activities is 81 B.R. at 976-77. raising farming, ranching, production or of language Whether this is consonant with our livestock, crops, production poultry, 101(17)(A) explication today, it is of no §of poultry products or livestock in an unmanufac- help to debtors. Since the courts below found tured state.” substantially that debtors have retired from ac- operation either own or Larry Ritz in 1986 as that the debtors ors received from operate. thereby by implica- perhaps “cash rent” — permitting tion ‍​​​‌​‌‌​‌‌‌‌​‌​‌​‌​​‌​​‌​‌‌‌‌‌‌‌​​‌‌​‌​‌​​‌​​‌‌‌‍us conclude that debtors land as securi pledged That debtors had production had no involvement to Rick ty for creditor's loan Easton does crops beyond that of a parcel on that lessor permit conclusion. Land or contrary not arrangement of land—this financial does more, land, plainly an interest in without possibility necessarily preclude that 101(20). farming operation, not a see § played statutorily significant role debtors analysis would Court’s crops production

vis-a-vis the on that permit arising characterization debt out acreage. We vacate and remand so thаt farming operation any loan secured opportunity debtors have to dem- purpose regardless farmland money they onstrate that the received from put. which the funds have been borrowed 101(17)(A) Larry proper Ritz inis fact approach That is not faithful to the lan legal income under the standard we have guage per because it would statute opinion. set forth Those sums can- mit inclusion toward satisfaction of the not be counted as income un- minimum debt debt incurred they an owner without sig- less debtors had some of land show in, connection between the debt and the degree engagement played nificant debt- farming activity. or’s own in, See Arm significant some operational rolе or had (debtor’s personal strong, 812 F.2d at 1030 ownership crop produc- interest guarantee compa of creditor’s loan to seed place acreage tion which took ny is out of arising farming opera not debt rented to Ritz. tion); In Douglass, re B.R. We find result reached below (Bankr.W.D.Mo.1987) (“[T]he reason or troubling respect. a further The Bank purpose for which the debt was incurred ruptcy Court ruled that majority of “[t]he coupled with the use to which the borrowed the debts owed the Debtors arise out of put funds were ... should be the criteria to family operation, that is the debts determine whether the debt ‘arises out of a represent grandfather’s guarantee farming operation’.”; debt securеd deed grandson’s hog his for the debts confine of trust on proper debtors’ service station hog facility raising operation.” ment ty arising farming opera is debt out of a 79 B.R. at Bankruptcy 838. The Court tion where used debtors the borrowed accordingly counted toward satisfaction of keep farming operation funds to their go 101(17)(A)’s percent eighty require debt § ing); Roberts, 536, In re 78 B.R. 537-38 $370,000 ment the debtors owe creditor be (Bankr.C.D.Ill.1987) (where debtor inherit cause farming debt arose out of a “[t]he operates, ed farm she estate taxes consti operation. It’s their land that pledged tute arising farming debt operation out mortgage.” as a Transcript of November because debt is incurred as acqui result of 30, Hеaring 1987 at sition decedent); Rinker, 65, (Bankr.S.D. We evaluating believe that debtors’ 1987) (debt Iowa incurred debtors in $370,000 debt to creditor the Bankruptcy settlement dispute of will over land farmed applied legal Court an erroneous standard. arising them is out debt of a Certainly this out debt arose operation). operation, inquiry but does not end there. Under at eighty least Here, § $370,000 debtors incurred a debt of percent liquidated, of debtors’ noncontin- not in acquiring retaining they land gent debt must arise out of a farming farm, financing or in their own operation operated owned or debtors. activity, agreeing but rather in co-sign a Debtors became liable creditor in the loan grandson’s made to finance their $370,000 amоunt of grand- because their farming operation. The record does not hog-raising enterprise son’s reveal, failed. however, On the debtors, in addi- present record, state of the it does not tion to their as co-signatories function on appear note, that this arises from farming debt any ownership interest, had strengthen the record role, it will further grand- believe in the operational played rights chapter establishing the Eastons’ enterprise. We vacate hog-raising son’s may protection. have an that debtors remand so relation- such a demonstrate opportunity to provision code at The $370,- The farming operation. ship to that of debt- requires that more than issue 50% satis- tоward cannot be counted 000 debt year pre- income for the taxable gross ors 101(17)(A)’s requirement debt faction filing come from a ceding year of their relationship. such a show unless debtors operated by “farming operation” owned or evidently 101(17)(A). believed pro- This The courts below U.S.C. debtors. statutory “family are entitled to debtors added to the Code as vision was on have lived status since Bankruptcy farmer” Act of Family Farmers many years and continue acreage for 99-554, 255, 100 Stat. 3105-3114. Pub.L. on farming activities traditional to conduct chapter created a new This law however, Courts, are not limited basis. providing addi- Bankruptcy Code aimed at “family farmer” to confer free caught protеctions family tional farmers simply individuals status began in the agricultural in the crisis which carry some farm and they reside on a Welch, early 74 B.R. 401 1980’s. See In re That an individual farm-related tasks. 1987). a law was (Bkrtcy.S.D.Ohio Such colloquial family farmer seem be necessary the “difficulties farm- because of not mean he or she of the term does sense reorganize seeking ers encountered purposes of the family farmer for is a provisions of the Bank- under” the other reasons we For the Code. ruptcy Worthington Bank Code. Norwest judg- opinion, have discussed 963, 970, Ahlers, 485 U.S. 108 S.Ct. v. is vacated ment of the District Court (1988). specific provi- The 99 L.Ed.2d 169 proceed- further matter remanded for sions at issue in this case were enacted opinion. ings consistent with family only to “ensure that farm- large corporate ers—not tax shelters or HANSON, Judge, District Senior protections from the entities—will benefit” dissenting in concurring part and chap- through newly created available part. (daily ed. Cong.Rec. ter 12. 132 S15076 wholeheartedly agree protec- that the 1986) (statement Grassley). of Sen. Oct. the Bank- by Chapter tions afforded parties agree All that debtors meet the only to those debtors ruptcy Code extend issue, year 50% the definition of who fall within only if cash rent received from the 101(17)(A). I found at 11 U.S.C. the Ea- income from Ritz’s is considered however, majority’s with the disagree, farming operation. stons’ provision and with their analysis of this found that this in- and district court both of the courts characterization of the actions qualify as income from come did ‘family conferring “statutory below farming operation in this case. The courts simply upon individuals be- farmer’ status on a review of made this conclusion based carry they reside on a farm cause “totality circumstances” sur- the The courts be- farm-related tasks.” some arrangement. rounding the rental found farmer” status low holdings find- majority rejects these The review of all of the circum- because their “totality the circumstances” test ing the of farming surrounding the Eastons’ stances determining for “whether inappropriate the rental ar- operation established given from a money an individual receives аn inte- rangements should be considered farming opera- such source is income ‘from enterprise holding grated part of this —a 101(17)(A).” meaning the tion’ within I find is consistent with both the text which dismissing errs in Thus, majority I I believe at issue. and intent of the statute definition of this test because the explain my dissent from separately write to by Congress ne- operation enacted in law majority’s the law. characterization of specific inquiry. remand, though, type I this of fact cessitates I concur 638 provision, entirety, general in in

This its states that cludes activities inherent farm “ ‘farming operation’ farming, ing perpetuating farming operation), til- and in includes denied, 925, rt. soil, ranching, U.S. lage dairy farming, 108 S.Ct. ce 287, (1987). livestock, 98 L.Ed.2d 248 production crops, рoultry, production poultry prod- or livestock Thus, contrary majority’s asser- ucts an unmanufactured state.” tions, embracing “totality of the cir- 101(20) 1987) (Supp. (emphasis U.S.C. V cumstances” test will not result in “no added). readily limiting principle”. discernible It simply courts, bankruptcy will allow the general “farming” phrase The use of the circumstances, appropriate to look at a example activity as the first of an farming operation as a whole without dis- “farming operation” impor- constitutes a is secting possible it into the smallest divi- First, “farming” tant for two reasons. majority’s The recognize sions. failure to ambiguous description comparison an this, fear, put straitjacket I will on the description the other of activities in the bankruptcy courts which will disable them phrase statute as the relates more to a being fully provide able to the relief ‍​​​‌​‌‌​‌‌‌‌​‌​‌​‌​​‌​​‌​‌‌‌‌‌‌‌​​‌‌​‌​‌​​‌​​‌‌‌‍concept specific activity. than it does Congress envisioned. Thus, by using phrase Congress indi- cated that it did not intend to limit the Accordingly, disagree strenuously with definition of solely majority’s suggestion that a farmers specific activities listed after “farm- renting land, portion out of a of his ing”. Otherwise there would have been itself, can never be considered absolutely phrase no reason to include the farming operation. “leasing of farm farming in the definition. We do not infer land, crop share, for either cash or a has Congressional such an intent on aсtion. In- integral part many family been stead, construing a statute we are “[i]n operations throughout country obliged effect, give possible, if every years,” practice as has the of custom farm word used.” Reiter v. Sonotone ing, in which a farmer hires all the farm 330, Corp., U.S. 99 S.Ct. labor done for him. In Re Mikkelsen (1979). 60 L.Ed.2d 931 Farms, Inc., (Bkrtcy.D.Or. B.R. 1987). Indeed, the definition of the verb Secondly, phrase “farming” also en- let; “farm” is lease or to demise or “[t]o Thus, pattern activity. visions a courts grant for a limited term and at a stated automatically should not break down all of carry rental. To occupation on business or engaged actions of someone farming.” Black’s Law Dictionary 545 separate into components before determin- (5th 1979). Thus, Edition ing whether these activities constitute acting entirely courts are within their dis farming. Some of the actions are more cretion when consider all of the cir properly viewed in context with each other. surrounding cumstances agree a rental For example, although the sale of farm ment to gen determine whether the income equipment appear does not to be erated is from farming opera the debtor’s isolation, when viewed in it indeed be Indeed, logical tion. it seems that Con farming when viewed the context of all gress specifically phrase chose the “farm the other activities and circumstances of ing” give in order courts the debtor. Mаtter Armstrong, 812 of sufficient target discretion to relief to their (7th Cir.1987) F.2d (holding that intended beneficiaries.1 “farming definition of operation” in begins general Code with term compelling A explanation of why a fluid “farming” implicit it is that definition in- definition of farming appropriate is is suggestions by majority 1. The the that the weighs use of stances. A court all the circumstances totality the of the circumstances test would al- agreements part to see if rental are family low a court to confer farmer status on a are, operation. arrange- If ail there are rental land-holder who has no other attachment to ments, then there is no complete misunderstanding evidences a arrangements part these to be of. concept weighing of the of all of the circum- courts, bankruptcy not the Burke, hands of the 81 B.R. 971 in Matter found of Thus, it is error for this appellate courts. 1987). Judge In this case (Bkrtcy.S.D.Iowa pre-empt bankruptcy the courts’ court to following pattern fact Jackwig recites the jurisdiction to determine these issues. which example of those farmers prime as a help: to Congress intended agree operations I those in which “financially example is the A familiar agricultural completely is non- the landlord four who be- family” of distressed active with other mid-1960’s, first rent- gan farming in the purely pass- are activities and which During the purchasing land. ing then through eligible for operations are not 1970’s, family pur- late prosperous however, This, chapter 12. is not such an price for a ex- additional land Instead, chased operation. the record shows that $2,000.00 Subsequent per acre. cess of already the Eastons have established rates, foreign production, high interest right protections chapter 12. I to the depressed mar- overproduction, domestic simply in the remand I be- concur of the dollar combined kets and the value stronger lieve an even record can be estab- The farm depress commodity prices. Thus, my lished. concurrence does not ex- generate sufficient longer was able to no representation of the majority’s tend to the produc- Sоme to service its debt. law, majority the hurdles which the make cut off credit. To tion lenders jump get chapter says the Eastons must meet, ob- the husband and wife ends Accordingly, urge I protection. employment off part-time at least tained explore indicat- courts below to all evidence of the land was the farm. Some or all ing arrangements are an that the rental leased. integral part farming oper- of the Eastons’ ation, exploring ways in as well as all Id., B.R. at 976. influence, direct and which the Eastons every is indication that There stewardship por- participate fully many aware that farmers were they rent out to tion of their farm situation, facing type and that some others for cultivation. being forced to rent out all or were I it is not clear to me that problems secur- also note that their farmland because is, crop. issue of whether debtors meet the ing putting credit for in a There 80% however, properly Congress intend- debt before no evidence that Appellants first raised this issue chapter 12 to be unavailable to such court. ed Thus, judgment after give an unnec- a motion to alter or amend farmers. refuse to bankruptcy court had ruled that debt- essarily reading phrase narrow family farmers within the mean- “farming” when the effect would be to ors were judgment very people Congress ing bankruptcy code. This deny relief to the bankruptcy after the court held sought help, especially when such a was issued legal hearing appellant’s on motion to dismiss reading is at odds with both the defi- allegation past based on the that debtors were nition of the term and with meaning farming. family farmers within present realities of bankruptcy Appellants code. never Further, I that it is must note established issue in their motion to raised the debt findings law in this circuit that of fact motion, dismiss, hearings during the are not to overturned court be This post hearing in their submission. they clearly are erroneous. unless challenge fact led the court (8th Cir.1985). Martin, 761 F.2d 472 raising legitimacy the issue give majority, though, fails to such defer- judgment. Transcript motion to amend See Instead, ence to the court below. Hearing at of Nov. purеly legal ques- analyze the issue as a Specifically, the court ruled from the practice The issues of whether a tion. “wasn’t even bench that the debt issue constitutes and of whether income I however, motion to dismiss. And farming operation, are raised is from revisiting Congress put guess problem I have a with inquiries which factual * * * again. grounds motion over and over And decision this court on the that to—to come in and raise it in the context of to applica- we had failed adhere to the then improper a motion to amend I think is ble code. The Court wrote “re- any because the facts—I don’t think it has lief from current farm woes cannot come merit, going my and so I am to renew appliсable from a misconstruction of the ruling denying laws, rather, the motion to dismiss sub- bankruptcy only but from ac- ject just I the—to what have stated.” by Congress.” tion at 970. S.Ct. Con- why Id. The Court went on to discuss it gress, fortunately, did act and created an thought if the claim was meritless even chapter entirely new aimed at like farmers properly raised. however, Today, the Eastons. this court path enacts an obstacle of such farm- Accordingly, question this through interpretation phrase ers properly claim is before us. It be that “farming” way which is no necessitated fully examining after issue we would Congress passed. the statute On this question jurisdiction- find that the debt is a aspect opinion I must dissent. time, al issue which could at be raised prеsented properly issue was However, the court below. I find it neces-

sary jump one of least these hurdles Thus, addressing

before the issue. I con-

cur in the give remand of this issue opportunity

courts below the to examine issue,

whether this is still a “live” as well produce as indicating evidence the ex- POOL, Appellant, Frank Kevin grand- tent to which the Eastons’ their farming operations son’s commingled were v. hog-raising enterprise. with DEPARTMENT MISSOURI OF COR my In view this would include all evidence AND RECTIONS HUMAN RE indicating that it was the intent of the SOURCES; Moore; Dick John Ash bring grandson Eastons to into their croft, Appellees. farming operation through joint ven- ture with him. No. 87-2423. Finally, misleading it is majority for the Appeals, United States Court of opinion George to refer to and Elsie Easton Eighth Circuit. being “basically farming”. retired from engaged May Eastons are in a Submitted: substantial 1989. raising operation cow/calf cattle for which Aug. 28, Decided provide alone Transcript all labor.

May Hearing In at 5.

operative year code, under the

approximately 170 acres of the Eastons’

land solely were devoted enterprise.

Thus, the not “basically Eastons are retired farming”, they merely carry- nor are

ing on “some They farm-related tasks”. fully

are actively engaged in the enter-

prise farming. It is also somewhat mis-

leading majority for the to refer to the

Eastons’ farm of more than 400 acres as acreage”.

“their

In closing I note one irony. last ‍​​​‌​‌‌​‌‌‌‌​‌​‌​‌​​‌​​‌​‌‌‌‌‌‌‌​​‌‌​‌​‌​​‌​​‌‌‌‍In Nor Ahlers, Worthington

west Bank v. Supreme

S.Ct. Court reversed a

Case Details

Case Name: In Re George Roger Easton and Elsie M. Easton, Debtors. Otoe County National Bank v. George Roger Easton and Elsie M. Easton

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Aug 23, 1989

Citation: 883 F.2d 630

Docket Number: 88-2052

Court Abbreviation: 8th Cir.