Court Opinion

ID: 9653584
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:49:20.564796+00
Date Added: 2024-06-11T18:13:00.146209
License: Public Domain

MORTON, Circuit Judge
(concurring).
The purpose of bankruptcy proceedings is the relief of honest debtors and the protection of bona fide creditors. It was never intended that such proceedings should be resorted to merely in order that fees might be allowed from the estates to counsel or others as provided in sections 62 and 64 (see 11 U.S.C.A. §§ 102 and 104 and notes; 6 Remington on Bankruptcy, last edition, § 2710). That bankruptcy proceedings have often been misused for the purpose of obtaining such fees is common knowledge among persons familiar with the subject. Bankruptcy courts hav.e a right to protect themselves against such an abuse of their process. It amounts to what is sometimes called “fraud on the court.” See Zeitinger v. Hargadine-Mc-Kittrick Dry Goods Co., 244 F. 719 (C. C.A.8). There “can be no law or practice which would compel a court of bankruptcy or any other court to become a party to a fraud.” Carland, J., 244 F. 719, at page 722. It is perhaps going too far to say that the referee’s finding that the present case is not of that character is clearly wrong. But enough certainly appears to require the most careful scrutiny of all petitions for fees in these proceedings and a careful limitation of the amount of them, having in mind the extent to which these proceedings have been advantageous to creditors generally. The “reasonable attorneys’ fee,” the allowance of which is required by section 64, is to be fixed with these considerations in mind (see 11 U.S.C.A. § 104, note 9, p. 91).