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93 FEb1iitiAL REPORTER.
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(Joupt, if, not as a,ll).atter of s-tmcJ right, upon proper apphcahon by the 'I)6titioningcr.editors in; bankruptcy in a proper case,the state cOl;lt't,\Vouldstay its own proceedings a reasonable time', until the bankruptcy petition could be and a trustee 'appointed, who could come into that court to be made a party, and assert his rights in the premiseS,' and it is only after a refusal, to do this that the bankruptcy. court ordinarily should interfere. But, even then, the refusal to stay the proceedings eould be corrected by error or appeal asa federal right denied,and; to avoid unnecessary and unseemly conflict between courts of co·ordinate jurisdiction,but diverse authority, that would be ,the preferable remedy. The application for an injunction must be denied.
Inre STOTTS. (DIstrict Court, S. D. Iowa, Central Division. April 6, 1899.)
B.U<rKRU'PTCY-COSTS OFADMINISTRA.TION-FEES OF
rendered to the bankrupt himself is not entitled to prioritY ()f payment. out ,of the estate; but 'an allowance maybe made to the attorney of the for services rendered In preserving the estate pending the appointment of a trustee. ' " , I ;A'trustee in bankruptcy may employ counsel when the situation ot the estate Is such that he requires legal assistance; and the fees of such a reasonable amoup.t, for services properly and actually rencounsel, de,red to .the trustee, maybe allowed as pa,rt of thec()St of admlni!ltering the es.tate.
SAM;K-A'LLOWANcE BY REFE:REE-NOTICE TO CRE:DITORS. OF ATTORNlllt FOR TRUSTEE.
1ft 'II. case of voluntary bankruptcy, an attorney's fee for legal services
The question of allowIng counsel fees as part of the cost of administering a bankrupt's estate may be determined by the referee ex parte; notice to creditors of the bearing thereon Is n()t a prerequisite the validity of ' hls action in the matter.
R. G. Howard and DoweJI& Parrish, for bankrupt
WOOLSON, District Judge. While this case was pending before Referee F. M. Davenport, there was aIIowed as attorney's fees to counsel representing the bankrupt $150, and also as attorney's fees to the same counsel representing the trustee $125. After the resignation of Referee DI:l'Venport, said counsel presented to his successor, William R. Lee, a motion for an order on the trustee for payment of these allowances; no order for payment having been entered. 'rhe motion was denied by the referee, for the reason, as certified by him, that "the claims were allowed at an ex parte hearing, and that the creditors had no notice thereof or .opportunity for objecting thereto." At the instance of saidcomisel, this matter has been certified for review by the referee. Noc)'bjeetion to the allowances above stated has been :filed by any creditor. I assume that thea.Ilowance of these attorney's fees was made '1indersection\ 64, par. "b," of the present bankruptcy
IN BE STOTTS.
statute. And, in so far as these allowances represent the ascertained value of the services rendered by counsel, I must assume the amounts to be correct. If correct, they should be paid, unless notice to creditors is a prerequisite, or the court finds, as the !!lame are presented, that their payment is unjust, so as to require action against such payment. In a decision lately handed down (In re Beck, Ex parte O'Oonnell, 92 Fed. 889) in the Eastern division of this district it was decided that no allowance would be made in voluntary cases for attorney's fees, in favor of counsel for the bankrupt, for services rendered for the bankrupt. But that in so far as such services, though nominally rendered for the bankrupt, were actually for the preservation of the estate, as, for instance, conserving the same pending the period between adjudication and first meeting of creditors, such fees might properly be allowed. It is now urged that the court will presume that the referee acted within this ruling, and affirm his action. But the order of allowance, as certified to this court, is not in accord with such presumption. Besides, on the oral presentation of this matter under review, the fact was developed that the claim of attorney's fees. as presented to the referee, went far beyond services for conserving the estate, although counsel affirmed a large part of such services were for the purpose and with the result of conserving the estate. From the record, as certified up, I am unable to determine what, if any, of such services are allowable, within the ruling announced in the Beck Case, above cited. So far as my attention has been called to the adjudicated cases under former statutes and to the provisions of the present bankruptcy law, the trustee may properly be allowed counsel, when the situation requires such assistance, and fees of such counsel are properly allowed as part of the expense of the bankruptcy proceeding. In the absence of objection filed thereto, I must assume that the action of the referee was correct in allowing counsel fees for the trustee; that is, that the services were properly and actually rendered to the trustee, and are of the reasonable value found by the referee. The question remains whether notice to the creditors was a: prerequisite to this allowance by the referee. The section of the statute (section 64, par. "b") as to debts having priority of payment does not expressly require notice to the creditors before cost of administration can be determined and allowed. In the section (section 58, par. "a") which states in what matters notice to creditors must be given, no requirement appears for such notice when costs of administration are to be settled and allowed; and my attention has not been directed to any other provision of the. statute, nor of the general rules, making such notices obligatory to the settling of such costs. Is there any good reason otherwise requiring such notice? It is assumed that creditors whose claims are filed with the referee will inform themselves of the general proceedings in the estate sufficiently, at least, to advise them of its general status, and file their objections, and, if necessary, take the proper steps for review of whatever orders and proceedings they may wish reviewed. They are thus given abundant opportunity for guarding against improper allowances. If the referee shall deem it. proper, whether because of the peculiarity of the claim
or for any other reason by him sufficient, I se'en'OobjectloD'to his fixing'atihie for the hearing'aila libtifying the creditots' tMtatthat time he will pass on the claim. But there occurs to me nO gOod reason why the costs and expenses of administration must be passed upon by aereditors' meeting, before he shall pass on the same. If at any time before the closing of the estate this court shall find that excessive attorneY's fees have been allowed and paid, this court doubtless has the power to take whatever steps are found necessary to correct this improper allowance and payment. These attorneys are on the roll of this court and subject to any proper order this court may make. lam of the opinion that notice to creditors is not required before the referee CaIj. settle proper attorney's fees. The attorneys in whose favor were allowed attorney's fees in the pending case have asked that this court refer back to the referee the matter herein certified for review. Under the circumstances disclosed, this request appears to be reasonable. The pending matter is therefore referred back to Referee Lee, with directions to take such further action relating thereto as may be found right and just.
In' 1'1' HIXON. (District Court, S. D. Iowa, Central Division. No.502.
April 6, 1899.)
The bankrupt's application for discharge will not be refused unless opposing creditors allege, /!.nd sustain the burden of proving, facts sufficient, under the act, to defeat the application. The formal prerequisites to a discharge having been complied with, the judge will not, of his own motion, seek out grounds for refusing to discharge the bankrupt.
2. SAME-SPECIFICATIONS IN OPPOSlTION.
Creditors opposing the bankrupt's application for discharge must set forth the particular .and specific facts on which their opposition Is based. Specifications alleging that the bankrupt has "concealed a part of his effects from the court," and has, "in contemplation of becoming bankrupt, made payments, transfers, and assignments of his property for the purpose Of preferring a creditor," are too vague, general, and Indefinite to prevent the. granting of a discharge.
In Bankruptcy. On application of bankrupt for discharge. Binford & Snelling, for bankrupt WOOLSON, District Judge. . Certain creditors have filed herein what they term "specifications" of "the grounds of opposition" to granting discharge herein. The files show that all the merely modal prerequisites to granting discharge have been fulfilled. Unless these "specifications" in opposition, etc., shall prevent, the bankrupt is en, titled t() his discharge. Section 14, par. b, provides that "the judge shall hear the application for a discharge, and such proofs and pleas as may be made in opposition thereto by parties in interest," etc. General order 33 provides, "A creditor opposing the application of a hankrupt for his discharge, · · · shall enter his appearance in