(District Oourt, D. Oaxifornia. llay 14, ISSi.)
The relationship Of8 receiver to the complainant is not a sufficient ground for his r-emoval, where the blIInkruptadmits that he was a party to a fraudulent transfer and concealment of his property.
In such a case the receiver may employ the complainant's solicitor.
Opinion on Motion to Vaoate Order Appointing Receiver. D. J., By the decree of this court the respondent was a.djudged to be indebted to the complainant, as assignee of the bankrupts, in a, large sum of money, being the value of assets of the bankl'uptfirm, of which he lut.d" obtained possession, and which he ' ha.d converted to his. own use by means of.a. fraudulent conspiracy of the most flagrant ch.,a.racter. Exeoution on this decree having been .unsatisfied, the present bill, in the nature of a creditor's bill; was filed. , It a.Ueged, insubsta.nce, that the respondent had made, and was about to make, fraudulent transfers 'of his propertYJo evade the paynumt of, the decree; that he. hM secreted andconceaJed theljame; that he WlIoS about to confess, illdgment on and fictitious to carry debts; tba,t,hewas about tQ)eavethe United with him the proceeds of his property; and that he had openly declared, that he had made such disposition. of -llis property as would ,prevent the complainl}n;tfromrealizing anything froIJl, his decree. On tllia bill a receiv;er,w'&sltppointed, and the respondent compelled to ,make a alilsignment' of ,his. property. The receiver has since ,l>eelil actively under the, advice and direction, of the complainant's solicitor, in endeavoring to discover and obtain poss6/lsion of, property of there8pondent,justly applicable to the payment of The receiver ,is the brother ,of ,the complainant, Who QreditQf.s .()f the bankrupts who have been. defrauded by the respondelltand hjs co-conspirators. A deIl).urrer t<;> the bill. having been interpQsed and overruled, the 'sol:iGitor of the respondent in open court declined. to plead to or. answer the bill, and it was thereupon decreed to be taken pro confesso. All the allegations contained in it in respect to the fraudulent transfers and concealment of his property by the respondent must be deemed to be true and undenied.
>ll'See former reports of this case, 6 FED,
J.t 18 now 'Suggested by the counsel for respondent that hl framing its final decree this court should order a reference .,to a xnas,ter to report the name of a person to be' appointed as receiver. and that person so appoirited should be directed not to employ as solicitor the solicitor for t}1e complainant. The integrity and ct\opacity of the receiver already appointed are not called in nor is the sufficiency of the bonds given' by him. It is . that his relationship to the complainant renders him not indifferent between the parties, and that it is improper that he should be directed by the advice of the' solicitor or' one of them. A reoeiver is in general defined to be "an indifferent person between the parties a.ppointedby the court to receive and preserve the property or fund inlitigationpendentc lite, when it does not seem reasonable to the court that either party should hold it." High, Rec. § 1. Such are receivers in suits for of a partnership and many other cases. "But the receivedh the preS&ntsuitoccupies an essentially different· position, and has differenUunctioD.s to dischalige. There is here 'no. liB pendens as, to a fund, the ownership of which iff undetermined. The court has finally decreed against the respondent forthe payment of'a large sum of money, .whw'h' decree he has failed and refused to' satisfy in whole or in part; it has, therefore, compelled him to make a general assignment-to a receiver whom it has appointed, .to the end that he may discover and obtain possession of the pNperty of the respondent, which the latter admits he has :fraudulentlytran!!T ferred, secreted, and disposed of with theohject and intent of evading the payment of thQ'. decree. If. successful in .baflling thea,dmitted t.4eexerfraudulent designs of the respondent, .he cauCllnly be cise of the utmost energy and industry, and probably by considerable litigation. He is not, and ought not to be, indifferent between the parties. His duty requires him to be the active adversary of this fraudulent debtor and his accomplices. In the selection of a person to discharge thetle duties, the respondent, in the position he now occupies, should have no voice, any more than the criminal should have in the choice of a detective to ferret out and recover the fruits of his crime. A therefore, who; by relationship or other con. neotion, may be supposed to feel in some degree the desire felt by the complainant to collect the sum decreed to be due, would seem, if otherwise unobjectionable, to be eminently fit to be appointed a receiver in a case like the present. For it is not to be forgotten that
the complainant is· himself a trustee, suing ·for the henefit of the defrauded oreditorsof the hankrupts. The sa,me considerations apply with equal force to the choice of counsel by the receiver. In general, he ought not to employ the solicitor of 'either party. High, Rec. § 82.3; Edwards, Rec. 111; 8 Cal. 319. But in this case the person who is of all the fittest to advise the receiver, and, if necessary, to stimulate his efforts, is the solicitor, . who, with indefatigable industry and tenacity, has succeeded in ex. posing the fraudulent conspiracy which lies at the foundation of all these proceedings, and has obtained, after protract!'ld litigation, .the decree against the reepondent. No other counsel cQuld feel the same desire as he, that the decree should not prove a nor the same inbaftling the confessed fraudulent machinations:of thE. respondent to escape its payment. To import new counseJ into the case at this stage of it would occasion delay and large additional expense, whiCh the receiver is not ill funds to illeEjt; and. such counsel, being necessarily ignorant of its previous history and its very intricate details, would. be unable to afford the advice and information. the receiver which the solicitor for the complainant can so readily furnish, and which are indispensably necessary to the reoeiver for the efficient discharge of his duties.. For these reasons I am of opinion that the receiver alreadyappointed should not be removed, and that he should not be directed not to employ the solicitor for the complainant. See Wetter v. Schlieper, 7 Abb. Pro 92; Bank of Monroe v. Schermerhorn, Clarke, Ch. 256; Siney v. StaaB 00. 28 How. Pro 481.
UNITED STATES V. DOWDELL.
UNITED STATES 'V. DOWDELL.-
(District (Jourt, D. Indiana. October 21, 1881.)
L UNITED STATES PENSION LAWS-INDICTMENT UNDER REv. ST. § TO QUASH. ' The act of June 20, 1878, (20 St. 243,) entitled "An act relating to claim
agents and attorneys in pension cases,"does not impliedly repeal the provisions of Rev. St. § 5485, relatmg to the offence of demanding, receiving, etc., unlawful fees by claim agents in pension cases, Rnd th9se provisions of Rev. St. , 5485, obtain and apply to violations of the act of June 20,
Motion to Quash. A. C. Ha,ms and W. H. Calkin8, for defendant. Cha8. L. Holstein, U. S. Dist. Atty., and Cha8. H. McCarer, Asst. U. S. Atty., for the United States. D. J. The charge is that on the first day of January, 1880, the defendant demanded and received from Keziah A. Davis, for prosecuting her claim for a pension, a greater sum thanWllis allowed by law. The indictment is based upon section 5485 of the Revised Statutes, which reads:
.. Sec. 5485. Any agent or attorney, or any other person instrumental in prosecuting any claim for pension or bounty land, who shall, directly or indio rectly, contract for, demand, or receive, or retain any greater compensation for his services or instrumentality ill prosecuting a claim for p.ension or bQunty land than is provided in the title pertaining to pensions, or who shall vnongfully withhold from a pensioner or claimant the whole or any part· of the pension or claim allowed and due such pensioner or claimant, or the landwarrant issued to any such claimant, shall be deemed guilty of a high misdemeanor. * . . ..."
Section 4785 declares that no agent, attorney, or other person shall demand or receive any other compensation for his services in prosecuting a claim for lli pension or bounty than such as the commissioner of pensions shall direct to be paid, not exceeding $25. The act of June 20, 1878,(20 St. at Large, 243,) declares that it shall be unlawful for any agent, attorney, or other person to receive for his services in a pension case a greater sum than $10, and expressly repeals section 4785. It is declared in section 5485 that no greater compensatiQn shall be retained or received for prosecuting a claim for pension "than is provided in the title pertaining to pensions," and the defQndant moves to quash the indictment on the ground that the only compensationwhich is found in the title pertaining to pensions is that. in
.Reported by Chas.L. Holstein, United States Attorney.