The Birmingham age-herald., 1908-01-22


 sSOO000, that he had determined to make his bond separate and distinct from the | other receivers. The receivers, Adler, | Chandler and Thompson, appeared before l this court at Huntsville on November l, l 19O7 and were examined orally as to their | administration of the property and es- | tate. and their ability to raise sufficient | funds to keep the plants in operation. Ed ] gar L. Adler was sworn and testified, in
 answer to questions by counsel and also l by this court, that neither he nor his 1 brother, Morris Adler, could in any man ner nor would they raise sufficient 1 funds, to be obtained upon receivers cer- l tificates, to pay the expense of keeping | the plants of the bankrupt In operation. 1 Thereupon 1t was suggested that by the | addition of T. G. Bush to the number of l receivers, he being a man known to the 1 court for many years man of highest 1 character and integrity and man having 1 had experience in the management of all | kinds of properties pertaining to this dis | trict and a man of well-known financial | ability, that he could secure such funds as might be needed to properly finance the 1 steel company and keep 1t in operation, | so long as said operation might remain profitable The court thereupon appointed l T. G. Bush as the fourth receiver, and he l was afterward made chairma of the re- | cevers. Upon the appointment of said l Bush as said receiver all parties in inter- est who were present before the court, | including the receivers, Adler, Chandler 1 and Thompson, were asked as to whether | they had any objections to urge to the ap- | pointment of said Bush, and the court was thereupon informed that no objec- | ton could be made to his appointment l from any source These receivers immed-
 lately took charge of the property of the haa aud tOI, fa1nd va | ceivers' certificates necessary to keep the 1 plants of the Southern Steel company in 1 oueration which they continued to do so | long as the said operation proved profit | able.
 Four Receivers Make Report. | These four receivers made a report to 1 this court on December 12, 1907, in which | with minutest detail they presented each | and every fact of theirs from the date of 1 their appointment. Notice of the date l fixed for the making of this report was l given to all the creditors of the bankrupt | corporation, and without attempting to | present the contents of that report, it is | only necessary in this connection to state | that the records of this court show that 1 there has been no challenge of that re- | port in any manner. After reference l to the special master of all the petitions | and pleadngs in this cause, together with 1 all the facts involved in the various con- | troverses, in which he was ordered to re- | port his findings and the testimony of the court, his report was duly filed and ex- | captions made thereto by the second pe- 1 tioning creditor. All matters connected 1 with these causes are now presented for l the consideration of the court, all parties | in interest being present in person or by 1 counsel. No exceptions were taken or 1 filed to the report of the special master | by the Southern Steel company, or by the | first petitioning creditors, who had in 1 sisted upon the appointment of Morris and | Edgar Adler as receivers. The second pe- tioning creditors now insist that the facts should in evidence and as found by the special master in his report as to the collision between the two Adlers and the bankrupt, make 1t imperative upon the court to dismiss the first petition and to adjudcate upon their second petition. Among the facts relied upon to sustain this contention was the uncontroverted evidence that week or 10 days before the
 petitions in bankruptcy were filed, J. D. Lacey. one of the directors of the re- spondent bankrupt. had arranged with Edgar |. Adler and his brother, Morris Adler, to act as receivers of the Southern Steel company in case of necessity and that when the necessity did arrive, and before the petition was presented to this | court, that he and his brother allowed their names to be inserted in the first pe- tition for receivers filed in this cause and made bond prior to and in contemplation thereof. There is further evidence and admissions, shown by the testimony, tend ing to show colusion and an effort on the part of the bankrupt to control or par ticipate in the management of it's estate, even after 1t had been committed to the jurisdiction of this court. It is most ve- hemently urged, therefore, that In view of this evidence and admissions, the bank rupt should not be adjudica d on the first petition, but that it skould be dis
 missed and an adiudicatio1 be had on the second petition.
 There can be <io question that in such cases a ibis where it is shown that
 the appointment of received or trus- tAe in bankruptcy is brought about by active interference and procurement of
 the bankrupt the appointment of the
 same will be set aside on proper peti- ton and showing to the court, 1t mat ters not how high the character or l capacity of the receiver or trustee may
 be- who is so. attempted to be pro- cured by the bankrupt. As is said by Iochren, district judge, in the case of In re Hanson, 156 Fed. TIT:
 Tt is well settled by all the authori- ties that the trustee represents the creditors, and not the bankrupt, in | the administration of the estate; and that 1t is improper that the bankrupt | shall actively interfere with the mat 1 ter of his selection and appointment; and that if he does interfere and the person aided by him is appointed by votes procured by such interference, the appointment should for that req son be disapproved In re McGill, 106 Fed. 57. 45 c. c. A. 21S; In re Rekers- dres CD. CD, 10S Fed. 206: In re Hen- schel CD. O. 109 Fed. S61."
 Application To Receivers. What is here said as to the, applica- tion of this principle to trustees must of course apply with much more force to receivers, for whom the court is solely responsible. While this is un- doubtedly the law and the contention made, would have authorized the court to entirely dfsreg, I'd the request by the first petitioning creditors, as to the receivers, yet it is not sufficient cause
 to justify setting aside of their peti-
 tion at this time. The action of this
 court. in disregarding in part their re-
 quest as to receivers and in appointing
 three other receivers, who are entirely
 disinterested. purged these proceedings
 of any collusive effect. growing out
 of the promotion of the Adlers by the
 bankrupt. There can be no question
 but that the bankrupt can act in har-
 mony with creditors of his own selec-
 tion for the purpose of surrendering
 his estate to the court, but the line
 is drawn, when he attempts in any