Court Opinion

ID: 9442920
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:04:06.198743+00
Date Added: 2024-06-11T17:29:16.755595
License: Public Domain

FRANK, Circuit Judge
(dissenting in part).
Before September 22, 1938, § 40, sub. a of the Bankruptcy Act provided that “Referees shall receive as full compensation for their services, payable after they are •rendered * * * from estates which have been administered before them, 1 per centum commissions on all moneys disbursed to creditors by the trustees * * By the Chandler Act, Congress amended this section, effective September 22, 1938, by adding: “The judge may, however, *466by standing rule or otherwise, fix a lower rate of compensation, so that no referee shall receive excessive compensation during his term of office * * *.”
Accordingly, I agree with so much, of the decision as relates to commissions on dividends paid after September 22, 1938,1 But I dissent as to the repayment of earned statutory commissions on dividends paid before that date.
I am not prepared to hold that American judges are “above the law,” are members of a specially privileged caste, or elite, inherently exempt from obligations imposed by statutes and the Constitution on all other persons, including the highest non-judicial officers. Yet unless we do so hold, it is, 1 think, impossible to conclude that, before the amendment of. § 40, sub. a, the so-called “standing rule” of the court below was not illegal and void, if it was intended to limit the statutory compensation of referees in bankruptcy. For consider this: Suppose that a statute, creating an office, provided that the compensation was to be 1% of certain funds collected .by the office-holder; that the term of office should be two years; and that the appointment to the office should be by the President of the United States. Suppose the President told the person he appointed that he would not be reappointed if he took more than $20,000 a year as compensation even if the 1% exceeded that sum. Suppose the appointee took the 1% ; that that was far greater than $20,000 a year; that he concealed that fact from the President; and that the President reappointed him. If suit were brought by the government to recover the excess, any federal judge would unquestionably dismiss the suit. He would hold either (1) that the President’s statement about reappointment was an effort to make an unlawful bargain founded upon an illegal consideration or (2) that the President could not lawfully use as a criterion of reappointment the appointee’s, willingness to reduce his full statutory compensation.
This is not novel doctrine. Over many decades the United States Supreme Court, and most state courts, have denounced as illegal every conceivable method that can be contrived to reduce an official’s statutory compensation. The rulings may be summarized as follows.: Where a statute fixes the pay for a public office, the holder is absolutely entitled to that pay. If he contracts to take less, the contract is illegal and void. Once his services have been performed, he will • not be held by such an agreement, whether made before or after that performance. Nor will he be estopped by a release or receipt in full, or by any other sort of conduct or “waiver,” from claiming the full compensation for which the statute provides. Two principal reasons are advanced for this doctrine :
(1) When the legislature creates the post and prescribes its duties, powers, emoluments, and the conditions on which the post is to be held, officers of other branches of the government are acting — legislating— unconstitutionally, if they undertake, by agreement, or rule or otherwise, to alter the terms which the legislature has fixed. Similarly, a statute is unconstitutional which seeks to take away an officer’s right to compensation already earned under an earlier statute.2
(2) In Glavey v. United States, 182 U.S. 595; 608-610, 21 S.Ct. 891, 896, 45 L.Ed. 1247, the Court said: “The purpose of Congress, as indicated by the act of 1882, was to compensate the services of a special inspector of foreign steam vessels by *467an annual salary of a specified amount. It was not competent for the Secretary of the Treasury, having the power of appointment, to defeat that purpose by what was, in effect, a bargain or agreement between him and his appointee that the latter should not demand the compensation fixed by statute. Judge Lacomhe, speaking for the circuit court of the United States for the southern district of New York in Miller v. United States [c.c.] 103 F. 413, 415, well said: ‘Any bargain whereby, in advance of his appointment to an office with a salary fixed by legislative authority, the appointee attempts to agree with the individual making the appointment that he will waive all salary or accept something less than the statutory sum, is contrary to public policy, and should not be tolerated by the courts. It is to be assumed that Congress fixes the salary with due regard to the work to be performed, and the grade of man that such salary may secure. It would lead to the grossest abuses if a candidate and the executive officer who selects him may combine together so aS' entirely to •exclude from consideration the whole class of men who are willing to take the office on the salary Congress has fixed, hut will not come for less. And, if public policy prohibit such a bargain in advance, it would seem that a court should he astute not to give effect to such illegal contract by indirection, as by spelling out a waiver or estoppel.’ ”3 See also U. S. v. Andrews, 240 U.S. 90, 94-96, 36 S.Ct. 349, 60 L.Ed. 541; MacMath v. United States, 248 U.S. 151, 152, 39 S.Ct. 31, 63 L.Ed. 177.
Doubtless, the flat 1% provision of § 40, sub. a, previous to its amendment, gave referees, during the Great Depression, undesirably high compensation, so that a reduction or limitation was eminently desirable. But the reduction of, or authorization to limit, this figure was a legislative, not a judicial, function. The judges had no more authority to limit the referees’ statutory fees than to limit the statutory salaries of *468the members of the Congress or the Governors of the States.4
Because the federal courts have always roundly condemned as an illegal usurpation of power every sort of attempt made by non-judicial officers to reduce statutory fees or salaries, those courts should be especially quick to denounce as equally illegal any such attempt made by federal judges. Particularly in a proceeding like this, brought (as my colleagues say) to undo an alleged “wrong done to the court” by an official, should the court itself not endorse or give any effect to illegal conduct which the judges may have tried to practice on that official.
Indeed, I would interpret Judge Knox’s statement in 1933 as originally intended to apply solely to the non-statutory compensation of referees,5 for to that extent the limitation was valid previous to the 1938 amendment. Thus in Ehrhorn v. Quillinan, 2 Cir., 170 F.2d 890, we had before us the question of the non-statutory compensation of this very respondent as a Special Master, in the light of the very so-called “standing rule” again before us in the instant case. We held that “rule” valid as to such compensation. But we carefully differentiated that situation from one involving his statutory compensation as a referee. As to the latter we said, 170 F.2d at page 891, that compensation is to be computed as provided in § 40 before its amendment and “is not subject to diminution or change by agreement since that would be in contravention of public policy which makes any such undertaking void.”
*469My colleagues say that they are not overruling that decision or departing from its doctrine. Nevertheless, I believe that they have nullified that doctrine here, as to the pre-1938 statutory commissions, by resorting to several arguments which I think untenable.
1. My colleagues’ first argument, as I understand it, is this;
(A) Respondent was not automatically •entitled to the entire “escrowed” 1% of the ■dividends declared previous to September 22, 1938 — the day on which the statutory amendment to § 40, sub. a of the Bankruptcy Act became effective. On that day, the so-called "standing rule” (limiting compensation to $20,000 a year) first became valid in respect of the statutory compensa•tion of referees. Had respondent died on •that date, there might have remained much work to be done by a succeeding referee up to the time of the estate’s closing. In ■that event, when the estate was closed in 1947, the district court — acting pursuant to :§ 40, subs, b and c — could and should have apportioned the 1% commissions on the dividends paid before September 22, 1938, .■allotting only a fair proportion for the services rendered by respondent up to Septemiber 22, 1938. Therefore (my colleagues ■say) respondent’s compensation may be divided into two parts, the first being for the period Up to September 22, 1938, the second being for the period from September 22, 1938, to the closing of the estate in 1947; for the first period, respondent is entitled to but a fair proportion of the 1% commissions on dividends paid in that period.
(B) My colleagues then assert that one •or both of these two results ensue: (1) Because the amount of compensation due respondent for the period up to September 22, 1938, was on that day undetermined, he had then no vested interest whatever in that compensation. The time for determining that amount arrived in 1947, after the statutory amendment of September 22, 1938, had validated the “standing rule.” Consequently that “rule” governed the compensation owing for the entire period from the institution of the bankruptcy proceedings in 1932 to the closing of the estate in 1947; and that “rule” was correctly applied in the order now on appeal. (2) At any rate (say my colleagues), respondent’s earnings allo-cable to the period previous to September 22, 1938, could be determined validly, at any time after the estate’s closing in 1947 — without any regard to the actual fair allocation of the commissions — at an amount which would yield respondent no more than $20,-000 a year for those services plus those rendered to other estates in the period ending September 22, 1938.
With (A) of this argument I agree (although with some hesitation, since respondent in fact continued to function as referee until the estate was closed, and it is somewhat artificial to divide into segments his continuous services, as if he had been two different referees). But for the following reasons, I do not agree with either of the asserted corollary conclusions in (B) :
(1) The mere fact that the precise proportion of the “escrowed” commissions which respondent had earned up to September 22, 1938, was not then determined, or determinable, did not prevent him from then having a vested right in that proportion of those commissions, at whatever amount it later would properly be determined, i. e., that right was vested on September 22, 1938, although the exact amount could not then be known. Thus his death on that day could not have cut off the right of his estate to his fair share of the “escrowed” commissions, merely because on that day that share was not ascertained.6 His right, arising in effect out of a contract, had so completely vested, regardless of whether it was then fixed as to amount, that if a new statute had expressly sought to destroy it, the statute would have been unconstitutional.7 Accordingly, such a new statute *470would, if possible, be interpreted to operate prospectively, not retroactively.8 Since a statute could not constitutionally destroy that right, obviously a court rule or order could not; any such court rule or order, if intended to operate retroactively, was therefore illegal, unconstitutional.
(2) Nor, when the estate was closed in 1947, could a judge arbitrarily have decided that, for respondent’s services before September 22, 1938, he should receive compensation (together with his fees from other estates) at the rate of but $20,000 a year, irrespective of the actual share of the statutory commissions fairly allocable to that period. No more could the judge who entered the order now on appeal. The amendment of § 40, sub. a was prospective, otherwise it would be unconstitutional; the “standing rule” therefore became valid, with reference to referees’ commissions, only as to those earned after September 22, 1938. Accordingly, nothing in amended § 40, sub. a or in that “rule” empowered a judge to hold that the fair share previously earned was to be measured by the $20,000-a-year yardstick. For all we know, that fair share may be the entire amount of the “escrowed” commissions. What is such a share presents an issue of fact, which must be judicially and fairly, not arbitrarily, determined. It has not been so determined.
The trial judge did not even purport to make such a determination, for the idea of apportionment originated with my colleagues. Nor was any evidence offered on which such a determination can rest, so that, even if the trial judge had made a finding on this issue, his finding would have been “clearly erroneous.” Moreover, he made no such finding; and, as under General Order 37; Fed.Rules Civ.Proc., Rule 52(a), 28 U.S.C.A., applies, such a finding is necessary.9 Consequently I think we should remand for a finding of that fact, based on evidence not present in the record but which may now be offered.
2. My colleagues, however, resort to a second argument which runs thus:
Two district judges respectively entered the “escrow” orders in 1937. Those orders were then final and ap-pealable, because they were plainly intended finally to deprive respondent of all right to the escrowed sums. Although those orders were erroneous, respondent cannot now attack them, since he failed to take timely appeals, so that those orders have become non-appealable by lapse of time. Therefore, we cannot now consider the validity of those orders, even if, with utter illegality, they struck down respondent’s vested rights. The destruction of those rights is now res judicata; and res judicata makes black white, and wrong right.
To this argument, I have several replies: (a) If those orders had unmistakably purported to cut off respondent’s vested right, then (for reasons canvassed above) those orders on their face would have been beyond the constitutional power of the judges who entered them. I gravely, doubt whether such orders would be immune from attack due to the lapse of the time for taking appeals. To protect the integrity of the *471judicial system, the courts should, I think, at any time vacate orders which thus defy constitutional limitations on judicial authority. Cf. Hazel-Atlas Co. v. Hartford Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250; United States v. Ward, 8 Cir., 257 F. 372, 375-376. But I do not rest my dissent on that ground.
(b) Those “escrow orders,” on their face, by no means purported finally to cut off respondent’s vested right. They merely directed the trustee to “earmark and set apart in escrow the statutory commissions of the Referee in Bankruptcy heretofore earned subject to the order of the court or referee.” 10 Surely this is language which can be interpreted reasonably as simply postponing payment of some or all the “statutory” commissions “heretofore earned,” leaving the time of payment subject to future orders. To refuse to give these orders that sensible interpretation — to construe them as designed deliberately and illegally to deprive respondent of his vested right— is to impute to two honorable district judges the intention to act unlawfully, unconstitutionally. Certainly, such an interpretation should be avoided if possible, as is the case here. If, as we easily can, we avoid that interpretation, then we have orders in each of which the judge -reserved full power to make future changes. An order containing -such a reservation is revocable, tentative, and accordingly interlocutory. Republic of China and Directorate General v. American Express Co., Inc., 2 Cir., 1951, 190 F.2d 334; City of Covington v. First National Bank of Covington, 185 U.S. 270, 277, 22 S.Ct. 645, 46 L.Ed. 906; City of Paducah v. East Tenn. Tel. Co., 229 U.S. 476, 33 S.Ct. 816, 57 L.Ed. 1286; cf. United States v. Smith, 331 U.S. 469, 471, 67 S.Ct. 1330, 91 L.Ed. 1610.
Even if, under 11 U.S.C.A. §§ 47 and 48, respondent might perhaps have appealed from those orders, despite the fact that they were interlocutory, nevertheless his failure to do so could not bar him from appealing later, if and whenever those orders subsequently became final. Western States Machine Co. v. S. S. Hepworth Co., 2 Cir., 152 F.2d 79, 80. They became final, if at all, only when they were apparently treated as final in the order now on appeal.
But my colleagues assert that we cannot avoid regarding those orders, when entered, as designed, unambiguously and finally, to wipe out respondent’s vested right — i. e., we must ascribe an irrevocable illegal purpose to the judges who entered those orders —because (say my colleagues) “otherwise there was no reason for such orders.” Strangely, however, two paragraphs later, my colleagues themselves set forth elaborately another perfectly good reason, as follows: The estate was not closed in 1937 when the “escrow orders” were entered; more work by a referee was still to be done; the balance of that work might have to be done by some other referee who (as in the event of respondent’s death) would succeed respondent; therefore in 1937 it was most desirable to defer payment of respondent’s compensation until the closing of the estate (which, as it turned out, occurred ten years later). So interpreting the orders —as keeping the amount of compensation in suspense — they had no finality; wherefore respondent lost nothing by not appealing from them.
3. My colleagues advance a third argument : “As the respondent in 1937 willingly left the balance in escrow, this balance became subject to the Chandler Act after 1938.” Much of what I have said above suffices, I think, to answer this argument: (1) The Chandler Act, in amending § 40a, did so prospectively. It did not authorize the judges to affect respondent’s vested right to his statutory compensation already earned. Had it done so, it would have been unconstitutional.11 (2) If respondent’s acquiescence in the escrow orders is regarded as a consent to have his earned statutory commissions reduced, that consent was illegal and void.12 (3) The “escrow” orders did not purport to cut off his vested right but merely to keep in suspense, for future determination, his fair share, already earned, of the “escrowed” commissions.
*472Of course, I do not approve of respondent’s furtive conduct. A scrupulous man would have obtained his rights by forthrightly demanding them. But insofar as respondent obtained no more than his rights, he should not be held to have forfeited them because he acted furtively.13 His evasions and his tacit prevarications did not convert him into caput lupinum, a rightless being, an outlaw. The “unclean-hands” doctrine is here inapposite, if on no other ground than that respondent, who sought no relief below, employed his devious ways — so far as they related to the pre-statutory-amendment period — in order to block what may have seemed to him an effort to deprive him of his vested rights by means of the “standing rule” which, with respect to his statutory compensation as referee, had only an illegal foundation in its application to that period.14 To the extent that he has but procured what lawfully was his, we should not compel him to surrender it by enforcing a “rule” which, if intended to apply to that compensation, was unlawful. To do so would be to gut the important public policy which opposes efforts to reduce statutory compensation; the result would be to upset the status quo — since respondent has already received the moneys — in order to accomplish such an interdicted reduction.15 The status quo should not be disturbed when, as here, we have in effect “an applicant who complains of misconduct and then is shown up himself”; the “clean hands” maxim expresses a “policy against judicial aid for carrying out illegal transactions.” 16
In sum, as to the services for the period before September 22, 1938, I see only an issue of fact which remains to be settled after the hearing of further evidence, i. e., the fair proportion of the commissions, on dividends theretofore paid, which should be allocated to that pre-amendment period.17 If, but only if, the resultant figure, fairly computed, comes to less than the commissions, respondent has received for that period (some $268,000), he should be ordered to repay the difference.
In all other respects, I concur in the majority opinion — with the understanding that when my colleagues say, “The respondent’s asserted inability to pay is a matter which may be considered in enforcement proceedings,” they mean this; The order to repay will not be taken as in any sense an adjudication that, at the time of that order’s entry, •he could have complied. Cf. Maggio v. Zeitz, 333 U.S. 56, 68 S.Ct. 401, 92 L.Ed. 476.

. For, as my colleagues say, no judge had the opportunity to pass on respondent’s •withdrawals of those commissions. .

. Steamship Co. v. Joliffe, 2 Wall. 450, 457-458, 17 L.Ed. 805; Fisk v. Police Jury of Jefferson Left Bank, 116 U.S. 131, 6 S.Ct. 329, 29 L.Ed. 587; State of Mississippi for Use of Robertson v. Miller, 276 U.S. 174, 179, 48 S.Ct. 266, 72 L.Ed. 517; Campbell v. City of Boston, 290 Mass. 427, 195 N.E. 802; State ex rel. Pike v. City of Bellingham, 183 Wash. 439, 48 P.2d 602; Salley v. McCoy, 182 S.C. 249, 189 S.E. 196; cf. Lynch v. U. S., 292 U.S. 571, 579, 54 S.Ct. 840, 78 L.Ed. 1434. See also other cases cited in note 7 infra.

. The Court also quoted with approval from Adams v. United States, 20 Ct.Cl. 115, as follows: “Monthly vouchers were drawn up, rpciting the number of days the claimant was employed during the month and the amount of compensation allowed by the collector and Secretary, ending with a receipt ‘in full for compensation for the. period above stated,’ which the claimant signed. We do not think he thereby relinquished his right to claim the further compensation allowed by law. If the appointing officer has no power to change the compensation of an inspector, certainly the paying officer has not. He had no right to exact such a receipt and the claimant lost nothing by signing it.” [182 U.S. 595, 21 S.Ct. 895.]
That there can be no “waiver” or “estoppel” in such a case, see, e. g., People ex rel. Satterlee v. Board of Police, 75 N.Y. 38, 42; Bishop v. City of Omaha, 130 Neb. 162, 264 N.W. 447; Wolf v. Humboldt County, 36 Nev. 26, 131 P. 964, 45 L.R.A.,N.S., 762; Salley v. McCoy, 182 S.C. 249, 189 S.E. 196; Bell v. Town of Mabton, 165 Wash. 396, 5 P.2d 514; State ex rel. Pike v. City of Bellingham, 183 Wash. 439, 48 P.2d 602; State ex rel. Rothrum v. Darby, 345 Mo. 1002, 137 S.W.2d 532; Reed v. Jackson County, 346 Mo. 720, 142 S.W.2d 862; Allen v. City of Lawrence, 318 Mass. 210, 61 N.E.2d 133, 160 A. L.R. 486; Hamilton v. Edmundson, 235 Ala. 97, 177 So. 743; Pitsch v. Continental & Commercial Nat'l Bank, 303 Ill. 265, 137 N.E. 198, 201-202, 25 A.L.R. 164; Peterson v. City of Parsons, 139 Kan. 701, 33 P.2d 715; Mack v. City of Mayfield, 239 Ky. 420, 39 S.W.2d 679; City of Louisville v. Thomas, 257 Ky. 540, 78 S.W.2d 767; County Commissioners of Anne Arundel County v. Goodman, 172 Md. 559, 192 A. 325, 326.
And that this is true when such an agreement has been ratified by a judge, see, e. g., Reed v. Jackson County, 346 Mo. 720, 142 S.W.2d 862.
An estoppel to assert illegality is ineffective. Coppell v. Hall, 7 Wall. 542, 558, 19 L.Ed. 244; McMullen v. Hoffman, 174 U.S. 639, 658, 19 S.Ct. 839, 43 L.Ed. 1117; Pope Mfg. Co. v. Cormully, 144 U.S. 224, 234-236, 12 S.Ct. 632, 36 L.Ed. 414; Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S. Ct. 172, 87 L.Ed. 165; U. S. v. Andrews, 240 U.S. 90, 95, 96, 36 S.Ct. 349, 60 L.Ed. 541; Nachman Spring-Filled Corp. v. Kay Mfg. Co., 2 Cir., 139 F.2d 781, 783, 784; E. E. Taenzer & Co. v. Chicago, R. I. & P. Ry. Co., 6 Cir., 191 F. 543, 551.
Annotations on this subject will be found in 70 A.L.R. 972; 118 A.L.R. 1458; 160 A.L.R. 490.

. The doctrine of the cited cases will dispose of the following argument: Before the 1938 amendment, the district judges, under § 22, 11 U.S.C.A. § 45, might for “cause,” have revoked the reference, and transferred the administration of this estate to another referee had they known that respondent had taken, or intended to take, compensation greater than $20,000 a year; therefore, by his concealment of his conduct or intentions, he is estopped to assert his rights to his statutory compensation. To sustain that argument, it is necessary to say that, although before the amendment of § 40, sub. a the judges lacked all authority to reduce fees below the statutory figure, yet it was “cause” for revoking a reference that a referee concealed the fact that he took, or intended to take, what the statute gave him. Patently, this argument involves a forbidden evasion of the statute.
The doctrine also leads to the rejection of the following argument made by the Special Master in this case: Respondent could validly “waive” a portion of the amount due him after it was earned; his seeming acquiescence in the “escrow” or- , ders, was, in effect, a “waiver” of any amount in excess of $20,000 per annum; the judges — in not revoking the reference and in reappointing him — relied on this “waiver”; he is therefore estopped, etc. etc.

. My colleagues “accept respondent’s position that the so-called rule was originally but a statement by Judge Knox to the assembled referees in 1933 that no referee who accepted over $20,000 in any one year would receive Judge Knox’s vote when such a referee came up for re-election at the end of his two-year term.” Doubtless my colleagues do so because the judge below refused to subpoena Judge Knox as a witness for the respondent “in view of the state of the record” — i. e., since Judge Knox’s testimony before the House Committee on the Judiciary at the Hearings on H. R. 6439, 75th Cong., 1st Sess. (pp. 88-90) was admitted by the special master on the consent of counsel for the petitioner instead of subpoenaing Judge Knox himself. That testimony, in part, is as follows: “I have put it up to the Referees that they cannot get so much money by my acquiescence indefinitely, and I have said, ‘If you are going to be reappointed by. my vote, you will have in a proper case to waive your fees.’ ”
Referee Kurtz, on the other hand, was called as a witness before the special master and testified that Judge Knox had told a meeting of the referees in May 1933, that the Judges of the Southern District of New York “had met and that they were fearful that some referees would make so much money that it might cause a scandal and that the Judges had determined that the referees should have a ceiling over their earnings, and that they should not aggregate more than $20,000 in any calendar year.” Referee Kurtz further testified that Judge Knox had directed the referees to “govern themselves accordingly.”

. 6 Corbin, Contracts (1951) pp. 300-301; 6 Williston, Contracts (Rev. ed., 1938) 5542; Restatement of Contracts, § 408; Restatement of Restitution, § 149 (see also pp. 23, 524).

. Ettor v. City of Tacoma, 228 U.S. 148, 149, 156, 33 S.Ct. 428, 57 L.Ed. 773; State of Miss. for Use of Robertson v. Miller, 276 U.S. 174, 179, 48 S.Ct. 266, 72 L.Ed. 517; Coombes v. Getz, *470285 U.S. 434, 442, 52 S.Ct. 435, 76 L.Ed. 866; Lynch v. U. S., 292 U.S. 571, 579, 54 S.Ct. 840, 78 L.Ed. 1434; U.S. v. Northern Pac. Ry. Co., 256 U.S. 51, 64, 66-67, 41 S.Ct. 439, 65 L.Ed. 825; U. S. v. Central Pac. R. Co., 118 U.S. 235, 238, 6 S.Ct. 1038, 30 L.Ed. 173; Steamship Company v. Joliffe, 2 Wall. 450, 457-458, 17 L.Ed. 805; Forbes Boat Line v. Board of Commissioners, 258 U.S. 338, 339, 42 S.Ct. 325, 66 L. Ed. 647; Fisk v. Police Jury of Jefferson, 116 U.S. 131, 6 S.Ct. 329, 29 L.Ed. 587; Campbell v. City of Boston, 290 Mass. 427, 195 N.E. 802.

. U. S. v. Central Pac. R. Co., 118 U.S. 285, 240-241, 6 S.Ct. 1038, 30 L.Ed. 173; Steamship Company v. Joliffe, 2 Wall. 450, 458-459, 17 L.Ed. 805; cf. Broughton v. City of Pensacola, 93 U.S. 266, 270, 23 L.Ed. 896; Town of Red Rock v. Henry, 106 U.S. 596, 604, 1 S.Ct. 434, 27 L.Ed. 251; Campbell v. City of Boston, 290 Mass. 427, 195 N.E. 802, 803.

. See In re Pure Penn Petroleum Co., Inc., 2 Cir., 188 F.2d 851; 1 Collier, Bankruptcy (14th ed. § 2.81, 8 Collier, §§ 1.35, 1.37; Kelley v. Everglades District, 319 U.S. 415, 418, 63 S.Ct. 1141, 87 L.Ed. 1485; Rosenberg v. Heffron, 9 Cir., 131 F.2d 80-82; In re Stein, D. C., 43 F.Supp. 815, 847.

. Emphasis added.

. See cases cited in notes 2 and 7, supra.

. Glavey v. U. S., 182 U.S. 595, 21 S.Ct. 891, 45 L.Ed. 1247; U. S. v. Andrews, 240 U.S. 90, 94-96, 36 S.Ct. 349, *47260 L.Ed. 541; see also the other eases cited in the early part of this dissenting opinion.

. “Equity does not demand that its suitors shall have led blameless lives.” Loughran v. Loughran, 292 U.S. 216, 229, 54 S.Ct. 684, 689, 78 L.Ed. 1219; Standard Oil v. Clark, 2 Cir., 163 F.2d 917, 927-928.

. Cf. Johnson v. Yellow Cab Co., 321 U.S. 383, 392, 64 S.Ct. 622, 88 L.Ed. 814; Langley v. Devlin, 95 Wash. 171, 163 P. 395, 400-401, 4 A.L.R. 32; Chafee, Coming Into Equity With Unclean Hands, 47 Mich.L.Rev. (1949) 877, 1065.

. Cf. the numerous cases refusing to upset the status quo where the parties are in pari delicto, especially where the party seeking relief is the greater wrongdoer, and where a major public policy would be injured if he were granted relief. See Restatement of Restitution, § 140 and Comment; 6 Corbin, Contracts (1951) § 1534.

. Chafee, loe. cit., 889.

. In computing that allocation, it should be considered how far the commissions properly allowable on dividends paid after September 22, 1938, represent fair compensation for the services rendered from that date to the closing of the estate in 1947. So far as they do, no part of the 1% commissions on the dividends paid before September 22, 1938, can-be fairly allocated to services rendered in the later period.