The Birmingham age-herald., 1909-05-23


 In re Wilmington Hosiery company, Am. B. R. 579. But let us examine the resolu-
 tion and see what It authorized Hood to do First it authorized him to represent the company generally 'in any suit suits or bankruptcy proceedings" now pending and that may hereafter ba | brought. Second, 1t authorized him to agree on behalf of the company to the appointment of a temporary receiver or receivers and give its assent to all things necessary or expedient herewith" Giving all the force this language implies tho purpose and authority delegated therein to Hood was to represent the corpora-
 ton generally in securing the appointment of temporary receiver and in any suit or suits or bankruptcy proceedings. | Granting that the corporation could del- ' egate to an agent or attorney the power to commit the act of bankruptcy as that agent or attorney might determine (which
 of course 1t could not dol, then, even in
 that event the resolution falls far short of authorizing the commission of the act of bankruptcy sought to be proven. On this same date upon which Hood wrote this letter E. T. Schuler as vice | president of the corporation. wrote the following letter, to-wit:
 Birmingham. October 24, 1907.
 "Sayre Mining and Manufacturing com pany, Birmingham, Ala
 "Gentlemen; I regret very much to state that the Southern Steel company is unable to pay it's debts and Is willing to 1 be adjudged bankrupt on that ground. Yours truly,
 SOUTHERN STEEL COMPANY, "E. T. Schuler, Vice President" No evidence was offered to show that the corporation had authorized Schuler to write this letter. The letter was not within the powers and duties incident to
 t@he @ vice presidency of the corporation, and that an officer of a corporation has no authority to write letter fin the name of the corporation committing the corpora- ton to an act of bankruptcy without ex- 1 press authority, Is too plain to need arg1l-
 ment. Any other view of this question would be to hold in effect that an officer or corporation may throw 1t into bank
 ruptcy as suits his will or caprice.
 Thus 1t will be seen that the adiudica- 1 ton of the Southern Steel company as a | bankrupt could not have been legally c, properly secured under the averments of bankruptcy as set forth in the petition of 1 the first petitioning creditors and the evi- | dence offered to sustain the same With
 this condition of the record, when thIs
 cause was submitted for adjudication on January 21 1908, by agreement of all | parties in interest all the cases were
 consolidated, and inasmuch as the re-
 ceivers had been appointed on the appli- ! cation of the first petitioning creditors
 the court deemed 1t proper for the inters< ! ests of all concerned to permit the peti- i tlo nof the first petitioning creditors to be ! amended so as to incorporate the acts of i bankruptcy set up by the second petition ing creditors. in order to save the con fusion and loss to creditors that might arise from the dismissal of the first neti- ton under which the receivers were ap- l pointed: and upon this an adfudicatIon | was had-all parties in interest including f the bankrupt. agreeing in open court that
 ttANx r1,z
 bankrupt. Thus, too 1t win be seen that l the work and services which in reality i secured the adjudication in bankruptcy
 In this cause were those performed by tho attorneys for the second petitionng cred
 itors, rather than the attorneys for ths 1 first petitoning creditors; and if any fec l shall be allowed for services in securing I the adjudication 1t Is right and preaer
 that that fee should be allowed to the s.t- ! torneys for the second petftioning credi-
 tors rather than to the attorneys for the ] first petitioning creditors; since the second : petitioning creditors alone presented l grounds upon which the corporation could legally be adtudicated a bankrupt
 Theres Is another reason why these al- | torneys for the first petitioning creditors,
 Messrs. Percy Benners, are not entitled
 to share in the fee allowed by statute for petitioning creditors. On the filing of the | first petition and the appointment of the
 receivers for the Southern Steel company | these attorneys. Messrs. Percy &5 Ben
 ners. became the attorneys in part, for l the receivers, and thereafter acted as such attorneys until the reoeivershin was terrai- : mated and the assets of the bankrupt es- l tate were placed in the hands of trus- 1 tees; and they are, also of counsel for
 the trustees. As such attorneys for the : receivers Messrs. Percy & Benners TO- 1 ceived the sum of 5000 as fees, and they are also entitled to and will receive fees ! as attorneys for the trustees On the | averments of the two petitions filed seek | ing to have the corporation adjudicated a.
 bankrupt there were necessarily positive 1 litigated matters of both law and fact be- : tween the first and second petitioning
 creditors; and the receiver being an of- ficer of the court and required to take i in charge and preserve the estate of the | bankrupt for the benefit of all parties in ! interest, impartially, and in a disnter-
 ested manner 1t follows that an attorney ! representing one of the parties to these , litigated questions of law and fact pend 1 ing between the two sets of petitioning
 creditors might be placed in an inconsist- ! ent attitude in being also attorney for
 the receivers. Messrs. Percy & Benners ! evidently recognized this condition Of af-
 fairs when they became attorneys for | the receivers immediately upon the ap- | pointment thereof and before the determi- ! nation of the issues between the petftion- | ing creditors. and their entering into such 1 employment and accepting fee therefor ! may be construed in law as a termina- 1 tion of their employment and services to
 the first petitioning creditors A case d.
 recetly in point with the question here de- l cided Is the case of In re T. F. Hin com | pany (2o Am. B. R. 7s), decided by the l court of appeals for the Seventh circuit, l in which the court says:
 ''It Is the general rule that receivers
 are to select counsel not identified with | the interests of one or the other party to ! the litigation (Beach on Receivers, sec. ] 262; Gluck & Becker on Receivers of ] Corp, sec 47: Tn re Kelly Dry Goods com
 panv Am B. R. 52S 102 Fed. 747-9);
 and for departure from this wholesoms CONTINUED ON PAGE 6.)