46 F. Supp. 118 | E.D. Wash. | 1942
This matter comes before the court on an appeal from the decision of the conciliation commissioner denying the motion of Forest V. Hunt and Bessie Irene Hunt to exclude from the proceedings certain real estate described in the farm debtor’s statement of assets. In this proceeding, the farm debtor has filed under section 75 of the Bankruptcy Act, Title 11 U.S.C.A. § 203, subs. a-r. The debtor’s petition here
Disposition of this case might be made upon the ground that the dismissal of the former proceedings, being the result of a voluntary adjustment between the parties, it amounted to an adjudication and the application for relief cannot now be renewed. See In re Suzuki, D.C., 20 F.Supp. 900; In re Archibald, 14 F.Supp. 437; In re Hinshaw, D.C., 33 F.Supp. 964. To my mind, however, doubt has been cast upon the correctness of the ruling of the district courts in those cases by the action of the Circuit Court of Appeals for the Seventh Circuit in the case of In re Armold, 100 F.2d 621 and In re Monjon, 113 F.2d 535. Consequently, I am unwilling to follow them.
The one issue is whether or not the farm debtor has a property right in this real estate such as is contemplated in section 75, sub. n of the Bankruptcy Act, 11 U.S.C.A. § 203, sub. n, so as to give this court jurisdiction over that property. Section 75 deals only with property which the debtor owns or in which he has some interest. In Wright v. Union Central Life Insurance Co., 304 U.S. 502, 509, 58 S.Ct. 1025, 1030, 82 L.Ed. 1490, the Supreme Court said: “Nothing in section 75 as it now stands indicates any intention that the bankruptcy courts assume control over land not previously within the jurisdiction of the bankruptcy court, and already completely divorced from any title of the debtor.” See, also, In re Tracy, 80 F.2d 9; United States Nat. Bank of Omaha v. Pamp, 8 Cir., 83 F.2d 493; In re Boehme, D.C., 41 F.Supp. 426. It is true that the word “property” in section 75 should receive a broad construction. Hoyd v. Citizens Bank of Albany Co., 6 Cir., 89 F.2d 105. In deciding the question as to this issue, this court must turn to the law of the State of Washington. Metropolitan Life Ins. Co. v. United States, 6 Cir., 107 F.2d 311; MacKenzie v. United
The debtor contends that the contract of November. 17, 1937, was an ex-ecutory contract of sale under which he was entitled to notice of forfeiture. In this he is mistaken. There was nothing in the contract which imposed any obligation upon him to purchase this property. It was merely an option. “An option is simply a contract by which the owner of property agrees that another shall have the right to buy it (the property) at a fixed price within a certain time.” Vol. 30 Words and Phrases, Perm.Ed., p. 6. Such an unilateral agreement by which the optionee assumes no obligation creates in him no right in the property. Jones & Co. v. Eilenfeldt, 28 Wash. 687, 69 P. 368; Lawrence v. Pederson, 34 Wash. 1, 74 P. 1011; Neeson v. Smith, 47 Wash. 386, 92 P. 131; Spokane, Portland & Seattle Railway Company v. Ballinger, 50 Wash. 547, 97 P. 739; Chambers v. Slethei, 136 Wash. 84, 238 P. 924. This is true even though the contract provides for partial payments, from time to time, and certain of the payments have been made. Rockwell v. Edgcomb, 72 Wash. 694, 131 P. 191, 45 L.R.A.,N.S., 661. It is true even though the optionee entered into possession of the land and plowed, seeded and cultivated it. Jacobson v. Barnes, 158 Wash. 691, 291 P. 1109.
From the foregoing, it must be concluded that even during the time of the option the optionee has no such interest in the property as would give this court jurisdiction over it in these proceedings. The failure of the debtor to exercise his option during the time provided in the option contract unquestionably bars this court from exercising jurisdiction over this property. For time is of the essence in option contracts. James on Option Contracts, pps. 376 and 400; Waterman v. Banks, 144 U.S. 394, 12 S.Ct. 646, 36 L.Ed. 479; Olsen v. Northern Steamship Co., 70 Wash. 493, 127 P. 112; Andersen v. Brennen, 181 Wash. 278, 43 P.2d 19. This farm debtor did not have on the date of filing his petition herein and does not now have any property right in this real estate. The conciliation commissioner was in error in his ruling. The motion of the Hunt’s on this ground must be granted.