Case ID: f-supp_14/html/0768-01.html
Source: Caselaw Access Project
Author: {"author": "ATWELL, Distri.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

UNITED STATES v. SMELSER. SAME v. DOROUGH.
    District Court, E. D. Texas, Texarkana Division.
    May 6, 1936.
    
      S. D. Bennett, U. S. Atty., and Charles S. Pipkin, Asst. U. S. Atty., both of Beaumont, Tex.
    King, Mahaffey & Wheeler, of Texarkana, Tex., for del
   ATWELL, Distri.

Sam H. Smelser a ree in bankruptcy for tl « ler, and Jefferson Divis: ’ ern District of Texas by deceased, formerly Ui rict Judge. R. P. Dorouf : in bankruptcy in many ime referee. The govei in these two suits that ted, illegally and unjustlj . of $2,600; that the trus ally and unjustly, fees in )00; that these collections r to the year 1927; that tl .t of office in 1929; and t not used as trustee after suit against Smelser Ava mtil 1931; the suit ag was brought in 1933.

Judge Bryant dis and the cases have appari ssed. It seems that motion presented to Judge Dav ince, who took them undei later indicated that he tl not well taken, but no c gned nor entered.

Upon call the de their general demurrer ar , exceptions. I do not cceptions are good. Tl -rers, however, relate to tl nited States, which has no interest in the litigation, to appear as plaintiff. If it has such right, it is bounden by the same statutory limitations as bind the private litigant, since there is no beneficial interest discoverable. Concededly the suits were instituted more than two years after the right of action accrued. The plaintiff’s petition asserts that the fees and sums collected by the referee were from bankrupts and their estates. The only interested parties, therefore, would be the bankrupt and his creditors. There is no benefit whatever for the United State’s.

It may be quickly conceded that the government is deeply interested in the fidelity and official accuracy of all of its servants. Bankruptcy officers are denied excess compensation in any form. Section 72, Bankruptcy Act, 11 U.S.C.A. § 112. See, also, In re George Halbert Co. (C.C. A.) 134 F. 236. Likewise it is beyond dispute or debate that the officer who receives compensation by fees from the litigant should be scrutinized and made circumspect by some central power, otherwise such officer may go acquit of any disgorging because of the dislike of the suitor to persist for small items of costs that have been unjustly taken from him. But it is not thought that such public policy and such public need may be substituted for fundamental bases that must support personal rights in order to ask for recognition and relief in a court of law.

The bankruptcy statute provides for bond in a sum not to exceed $5,000, to be executed by each referee for the faithful performance of duty. Action upon this bond must be brought within two years after the alleged breach. Section 78, U.S. C. title 11, c. 5 (11 U.S.C.A. § 78). Trustees are also required to give bond similarly conditioned. See page 373, paragraph 10, United States v. Ward (C.C.A.) 257 F. 372.

The suits here are not suits on official bonds. See Howard v. United States, 184 U.S. 676, 22 S.Ct. 543, 46 L.Ed. 754. They are straight actions at common law. They are not class suits at equity. They specify many cases of overcharge.

The cases of United States v. Alfred Abeel (C.C.A.) 174 F. 12, and United States v. Ward (C.C.A.) 257 F. 372, 373, were actions on official bonds; the United States was the obligee. They cannot therefore be support for these suits.

The Supreme Court in Curtner v. United States, 149 U.S. 662, 13 S.Ct. 985, 1041, 37 L.Ed. 890, held that, when suit is brought for the benefit of private persons and the government has no interest in the result, the United States is barred from success if the person for whose benefit the suit is brought would be barred. United States v. American Bell Tel. Co., 167 U.S. 224, 17 S.Ct. 809, 42 L.Ed. 144; French Republic v. Saratoga Vichy Spring Co., 191 U.S. 427, 438, 24 S.Ct. 145, 48 L.Ed. 247; La Clair v. United States (C.C.) 184 F. 128, 136; United States v. Atlantic Coast Line R. Co. (D.Q.) 206 F. 190, 211.

The fact that there is no national statute of limitation, against the United States in matters of this sort does not save the United States in this particular suit from being stayed by the statute (Rev.St.Tex. 1925, art. 5526) of the state of Texas which inhibits action of this kind after two years. Moran v. Horsky, 178 U.S. 205, 214, 20 S. Ct. 856, 44 L.Ed. 1038.

So, if it is conceded that the government may sue in a situation such as is here presented, it has brought its suits too late.

The plaintiff refusing to amend, the causes are dismissed.