Court Opinion

ID: 8784530
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:29:22.517046+00
Date Added: 2024-06-11T17:03:00.386495
License: Public Domain

GEIGER, District Judge.
A receiver or trustee in bankruptcy, whatever other duties may be cast upon him, is certainly the legal and actual custodian of the property which is the subject of the proceeding; and, under the rule of this court (bankruptcy rule No. 3), a receiver, .unless otherwise ordered, can “act only as custodian to care for the property (and have the same insured) for delivery to the trustee.” It is rightly presumed that the duty to so act, as every other duty, must, in the first instance, be performed by the receiver or the trustee personally, as an incident to or burden of the office, and in consideration of whatever compensation may be allowed. The right to assistance, at the cost of the property in custody, in addition to such compensation, must arise out of circumstances or conditions disclosing a burden beyond the reasonable possibility of performance by the single individual charged therewith. Such situations .are found when the property is of great bulk, situated in different localities, or where, in its care and preservation, service of a special or unusual character is required.
. The referee has applied these general elementary principles to a corporation — a trust company, acting in the capacity of receiver or trustee. Manifestly, such a corporation should be subject to the same rules as individuals. It can act only through its officers or agents; but it must be ready through them to perform the duties of the office or the trust, just as an individual must perform them. It is merely empowered to discharge the functions as an individual otherwise might, but not at greater cost nor burden to the estate.
This brings us to an application of these principles to the facts before us. A stock of goods located in a store building, where the bankrupt conducted his business, is turned over to the corporate receiver. The property is insured, and it is alleged that, in order to effect insurance, a caretaker was required to be and was placed in immediate charge of the property. It is not made to appear that the watchfulness thus bestowed by the receiver through his hired servant — at the behest of the insurer — was something beyond or in addition to the service contemplated to be performed by an individual or corporate receiver, charged solely with a custodianship. The intimation that, except for the demand made by the insurer, the receiver would not have placed a watchman in direct charge of the property, by no means satisfies the requirement of reasonable necessity in casting an additional burden upon the property. The presence of a watchman is necessary, if at all, as an incident to the general custodianship involving the particular duty to insure, and the service thus rendered is, as above stated, one which the receiver or trustee personally must perform, unless absolved by reason of situations arising as indicated. The necessity for its performance by an agent or another cannot arise out of or be demonstrated by the mere fact of its being so performed.
*881It was claimed, upon argument, that receivers and trustees should be treated with the same liberality as are sheriffs or marshals, upon seizures of property; that the latter invariably deputize others, at the cost of the parties or property, to take actual charge. Such officials are charged with the performance of other public duties, which fact, of itself, usually determines the necessity of assistance in the discharge of any particular duty. Their right to assistance is not absolute, but is determined in each case by circumstances showing necessity.
The fact that the rendition of service as a watchman or caretaker over property may be irksome, or certainly not congenial to those acting as receivers or trustees, and, further, as intimated or claimed upon the argument, that, in view of the moderate compensation allowable under the bankruptcy act, individuals or corporations would decline to act in such- capacities unless greater liberality is shown, because they could not afford it, cannot justify allowances not otherwise sanctioned under a general rule sound in principle and applicable to all cases. And because the receiver herein failed to bring itself within such rule, I think the referee rightly disallowed its claim.
The order is affirmed.