Court Opinion

ID: 8755037
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:42:47.450546+00
Date Added: 2024-06-11T17:01:11.897560
License: Public Domain

LOWELL, District Judge.
At the first meeting of creditors, sundry claims were presented for proof, and all those presented by parties now appealing from the decision of the referee were there contested. In view of all these circumstances, more fully set out in his certificate, that officer found it impracticable at that meeting to pass upon the validity of the claims there presented, and continued their consideration. See section 57d, Act July 1, 1898, c. 541, 30 Stat. 560 [U. S. Comp. St. 1901, p. 3443]. As it thus became impossible to proceed to the election of a trustee in the ordinary manner, the referee appointed a trustee, as provided in section 44, 30 Stat. 557 [U. S. Comp. St. 1901, p. 3438], The circumstances were unusual, and the referee did not deem it expedient to postpone the election until the contested claims had been passed upon, and an adjourned meeting could be had. No injustice was thus done to creditors, for, after the validity of their claims has been established, they can ask the court for the removal of the trustee thus appointed, without allegation or proof of his dishonesty or inefficiency. In disposing of their petition for removal, the court would bear in mind the unusual circumstances of the trustee’s original appointment, and would protect the rights which creditors ordinarily possess in choosing a trustee of the bankrupt estate. The referee, indeed, could have continued the administration of the estate by the receivers already appointed, or by other receivers substituted for these, but he deemed it for the best interests of the estate that the title to the bankrupt’s property should be vested immediately in a trustee. While administration by a receiver ordinarily accomplishes much the same result as administration by a trustee, yet circumstances may well exist to make the latter desirable. If at the first meeting all claims offered for proof are in dispute, and it is impracticable at that time to settle the dispute, it appears to be within the discretion of the referee to appoint a trustee under section 44. The judgment of the referee is therefore affirmed.
Creditors prayed a recommittal of the certificate in order that the referee might certify additional facts and evidence. If the appellants desire that the judge shall weigh the evidence and determine questions of fact, they should ordinarily procure that the evidence before the referee is taken down stenographically,and by him certified to the judge. If this be deemed inadvisable on account of expense or other reasons, the.parties should specifically point out to the referee that testimony which they wish him to summarize in his report, and they should ask him for specific findings of fact on which they may rely at the hearing before the judge. Nothing of the sort was done here, and the appellants are therefore left to depend upon the summary of evidence and the findings of fact contained in the certificate. In order that the appellants should lose nothing substantial by their oversight, the cqurt *394has_ inquired of the referee concerning one additional finding especially desired by the appellants, namely, that certain creditors named were a majority in number and amount of claims presented, and that no evidence was given before the referee attacking the validity or genuineness of their claims. The court is informed by the referee, as sufficiently appears from the certificate, that the validity and genuineness of all these claims was contested before him. If there was a contest, and the referee continued consideration of the claims, it is immaterial that no evidence impeaching their validity was presented at the first meeting. Continuance was within the referee’s discretion.