In re Stearns Salt & Lumber Co.

Citations

• 225 F. 1
• 140 C.C.A. 461
• 1915 U.S. App. LEXIS 2088

Syllabus

<p>1. Bankruptcy <@=482—Preferences—Suits to Set Aside—Actions—Employment of Counsel.</p> <p>The referee in bankruptcy, on petition of an unsecured creditor, directed the trustee to sue to set aside a preference by the bankrupt, on condition that the petitioning creditor should indemnify the trustee. The. indemnity was given, and in reply to a letter by counsel selected by the creditor, and who claimed compensation from the estate, the trustee informed them that it would be all right to bring suit, and that he desired any action taken by such counsel should be referred to his attorney; it being the trustee’s understanding that he was not responsible for any expense of the suit. The trustee’s attorney informed counsel that he saw no defects in their declaration, and that the trustee merely desired some one to keep track of the progress of the suit and advise him. The suit was successful. Held that, in view of the correspondence and the trustee’s acquiescence, counsel must be held to have been employed under sanction of the court and with consent of the trustee.</p> <p>IKd. Note.—For other cases, see Bankruptcy, Gent. Dig. §§ 874^876, 897; Dec. Dig. <§=4S2.]</p> <p>2. Bankruptcy <@=446—Proceedings to Revise—Findings.</p> <p>On a proceeding to revise in a matter of law an order or the District Court, findings of fact cannot be questioned.</p> <p>[Ed. Note.—For other cases, see Bankruptcy, Cent. Dig. § 929; Dec. Dig. <g=116J</p> <p>3. Bankruptcy <@=482—Preferences—Attorney’s Fees.</p> <p>An unsecured creditor filed <a petition to compel the trustee to sue to set aside a preference by the bankrupt. On a suit instituted by attorneys selec-tod by the unsecured creditor with the consent of the trustee, the preference was set aside and a large sum was made available for payment of the general creditors. Held, that the expenses of the suit, as well as the attorney’s fees, could be paid out of such general fund, notwithstanding the preferred creditor owned a large majority of