Case ID: f_112/html/0960-01.html
Source: Caselaw Access Project
Author: {"author": "J. B. McPHERSON, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re BAIRD et al.
    (District Court, E. D. Pennsylvania.
    January 13, 1902.)
    No. 852.
    Trustees in Bankruptcy—Duty to Institute Suits—Requiring Indemnity of Creditors.
    Though a trustee in bankruptcy is not required to litigate every question called to his notice by creditors, however frivolous or apparently lacking in support, he cannot, by requiring indemnity in every instance against costs and expenses, cast the risk of a controversy respecting alleged preferences, etc., on the particular creditor requesting him to undertake it.
    In Bankruptcy.
    Hazard Dickson, for trustee.
    H. Merian Allen, for creditor Camden Nat. Bank.'
   J. B. McPHERSON, District Judge.

It is certainly not the duty of a trustee to litigate every question that may be called to his notice by the creditors, however frivolous or apparently lacking in support it may be. On the other hand, he should not be permitted, by-requiring indemnity in every instance against the costs and expenses of a suit, to cast the risk of controversy upon the particular creditor who may request him to undertake it. A general rule upon this subject would be very difficult to lay down, and I shall not essay the enterprise. It may be safely said, however, that if a trustee bears in mind that he is the representative of the estate considered as a whole, is bound to be vigilant and attentive in advancing its interests, and is under obligation to seek to carry out in the strictest good faith the provisions of the bankrupt act where they seem to apply plainly to the estate committed to his charge, he is not likely to go far wrong in doing, or in refusing to do, what may be asked of him by the creditors. In doubtful cases, the referee and the court will.solve his perplexities.

So far as the claims under discussion are concerned, I think that the trustee, acting for the estate, shotdd see to it that the alleged preferential payments be investigated, and that the petitioning creditor should not be required to furnish indemnity against the expense of a possibly unsuccessful controversy.