Owen J. Roberts

“ It is sufficient that the court's action in refusing to refer the cause to a conciliation commissioner was justified. That order, we think, should have been affirmed.
It is said that, even where title has passed from the mortgagor in foreclosure proceedings before the filing of the petition, the debtor should be, if he so requests, adjudicated a bankrupt so that a trustee may, if so advised, challenge the validity of the sale. Here, however, there is no suggestion of any infirmity in the petitioner's title save that the sale was made in violation of the prohibitions of the bankruptcy act. ”

“ Here, the only asserted rights which intervened against this farmer-debtor were not those of a bona fide purchaser. The purchaser was the mortgagee who was a party to the Section 75 proceeding and who relied-at least in part-on an order of the bankruptcy court admittedly erroneous because contrary to the Frazier-Lemke Act, and rendered at the mortgagee's instigation. Therefore, the mortgagee-purchaser is not entitled to rely upon the status acquired by it in the State court after dismissal 'as precluding further consideration of the petition' for composition. ”

“ But without changing the status of the debtor's right of redemption the federal court gave permission to the State officer to hold the sale. The sale was, however, incomplete until confirmation by the court. [6] Until confirmed it amounted to an unaccepted offer to purchase. No sale was consummated while the bankruptcy proceeding was pending.
In view of the provisions of subsection o, it was error for the District Court, in the absence of the preliminary steps required by that subsection, to permit the sheriff to hold the sale. [7] But the court had jurisdiction in the premises. ”