Court Opinion

ID: 8634720
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:43:20.4824+00
Date Added: 2024-06-11T16:55:53.519538
License: Public Domain

CHASE, Circuit Justice.'
This'is ¿ petition ' for a. revision of the allowance by the register in bankruptcy, and confirmed by the district . court, allowing a certain compensation as counsel to S. S. Rowland, for services in pro- . curing the adj udication of the banikruptcy. The claim of Rowland, who styles .himself attorney, was presented to Register Pond, purporting to be an account of expenses -and disbursements in behalf, and at the instance of a majority of the creditors, it'amounted to-one thousand four hundred and’ fifty five dollars, including a counsel fee- of .two -hundred and fifty dollars, paid to E. Y.-Cannon, Esq. The account was sworn to by Rowland, and received the endorsement of the register to the effect that he should be paid before any general distribution of the funds, and was afterwards, on May 5, allowed by the district court. Afterwards, on October 28, 1868, the district court made . an order,. -.reciting, among other things, that it appeared to the .satisfaction of the court that-the costs and disbursements incurred in • the proceedings • had been duly taxed before the register in bankruptcy, and certified to this court, and . that the order allowing the same had been duly entered, and served upon one of the. assignees, and that it further appeared by the affidavit of S. S. Rowland, that the as-signee disregarded the order, and denied the authority of the court in respect to it; and thereupon the court ordered • the • assignee *539forthwith to pay the sum by warrant, or cheek upon the funds of the estate for the sum of one thousand four hundred and fifty dollars, negotiable and payable to the order of Lathrop, Ludington & Co., and deliver the same to Register Bond, if sufficient funds belonging to the estate of the bankrupts were in the hands of the assignee.
[NOTE. The case was heard at the same term of the court upon petition of the assignees for review of order of district court ordering the assignees to pay certain money over to Moses Mitteldorfer, trustee. Case No. 9,674.]
The petitioners claim that the orders were erroneous, and ask that they be reversed. They insist that there has been no taxation of costs in this case, that what has been called a taxation of costs is nothing but the account of Rowland, with the opinion of Register Bond endorsed upon it that it should be paid before any general distribution of the funds; that the account is unsupported by any vouchers; and that it had not been sent to them for their examination and report; and that no opportunity to .contest the items of the claim had been afforded to the petitioners; that the account itself is exorbitant and unjust, a great part of the claim, that is to say, one thousand one hundred and ten dollars being for services as counsel; of which eight hundred and sixty dollars are for legal services rendered by Rowland, the remaining two hundred and fifty dollars for the services of E. Y. Cannon, Esq., attorney, Richmond; that Rowland was not an attorney, but an employee of Lathrop, Luding-ton & Co. at a regular annual salary; that the money pretended to be paid by Rowland was in fact paid by'his employers; and that the bill of costs is but an attempt on their part to secure an undue share in the proceeds of the bankrupt’s effects.'
There can .be no doubt where one or more creditors petition for,' and procure an adjudication of bankruptcy against a debtor, they may on motion be reimbursed for their reasonable expenses. The fund is the fruit of the diligence of such creditors, and it would be manifestly unjust to compel them to bear alone the expenses incurred for the benefit of all. Such was the opinion of Judge Benedict, in Re Schwab [Case No. 12,498]. In his opinion the judge cites the opinions of other district judges to the same effect.
It is clear, therefore, that all reasonable expenses incurred by Lathrop, Ludington & Co., as the petitioning creditors in this case, should be allowed to them, and it will be proper when their claim is made and-admitted, that an order should be made to this effect by the district judge. The assignees, however, complain that the allowance made is excessive, and I am inclined to think, with reason; certainly an opportunity must be afforded them to contest the items of the jlaim.
I shall, therefore, reverse the orders made in the district court, and the case will be referred back to that court with instructions to allow the petitioning creditors to file a claim for the expenses incurred by them, and to allow such sum as shall appear just and reasonable in the circumstances, having due regard to the interests of the other creditors. In re Williams [Case No. 17,704], per Judge Bryan; In re Jaffray [Id. 7,170], per Judge Lowell.