The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1904-10-22

Total. SAG 80
The form of bond given by trustees
in bankruptcy contains the following
conditions:
If the said trustee as afore-
said shall obey such orders as said
court may make in relation to said
trust, and shall faithfully and truly ac-
count for all moneys, assets, and eff
fects of the estate of said bankrupt
which shall come into his hands and
possession, and shall In all respects
faithfully perform all his official duties
as said trustee, then this obligation
to be void; otherwise, to remain in full
force and virtue
The condition of the bond being not
only to account for all the moneys, as
sets and effects of the estate which
comes into the hands of the trustee
but also to, in all respects, faithfully
perform all his official duties as said
trustee, it appears to me that the par
ties to the bond are liable not only
for such moneys as have been embez-
Zled, but also for such expenditures
which have become necessary on ac-
count of and as the direct result of the
failure of the trustee to faithfully per-
form all his official duties
The item of $3.50 for premium on
the official bond of the new trustee is
probably too remote a result of the
misconduct of the trustee to be made a
charge against the surety. Such an ex-
pense would accrue On any occasion Of
filling such a vacancy, which might be
caused by the death or resignation of
the trustee as we'll as by his removal.
The other expenditures became neces-
sary as the immediate result of the
failure of the trustee to perform his Of
fetal Guties. In consequence thereof
the parties to the bond are liable for
the same, as well as the amount of
money embezzled.
The second question is as follows:
Upon payment by the Surety Com
pany of the ascertained loss to the es-
tate, should the bond first given in this
estate be cancelled of record?
The Bankruptcy Law (Section so
Div. ND. provides that suits upon
trustees bonds shall not be brought
subsequent to two years after the es-
tate has been closed. The implication
of this provision is that suits may be
brought upon such bonds at any time
within two years after the estate has
been closed, unless, perhaps, the
exhausted by previous suits. The pres
ent liabilities of the parties to the bond
On account of the misconduct of the
trustee, consume but a small part of
the amount of the bond. I can find no
law directly on this question. I find,
however. that the California Statute of
Insolvency provides that 1.-The bond
shall not be void upon the first recov-
cry but may be sued upon from time
to time by any creditor aggrieved in his
own name until the whole penalty is
exhausted Insolvency Act of 1880,
Sec. 15). This refers to the bond to the
assignee of an insolvent estate under
that statute Although this statute has
no authority with this court, yet it
seems to suggest a reasonable rule of
practice under the Bankrupt Act
1t appears to me, therefore, that the
bond of the first trustee may not be
cancelled of record but must stand un-
til two years have elapsed after the es-
tate has been closed.
SANFORD B. DOLE,
Judge, United States District Court.
October 21st, 1904.