In re Howard
In re Howard
Opinion of the Court
This is an application for an order directing Charles B. Bills, trustee of the estate of Edward B. Howard, bankrupt, to pay the petitioner the sum of $6,492.37, with interest thereon from August 29, 1902, at the rate of 3 per cent, per annum, and the further sum of $681.30 costs awarded against the trustee by the United States Circuit Court for the Eastern District of New York in an action brought by the trustee against the petitioner
1. That this court has jurisdiction in this summary proceeding to require the trustee to make restitution of all moneys received by him under the decree of the Circuit Court subsequently reversed by the decree of the Circuit Court of Appeals, I entertain no doubt. The trustee is an officer of the court, and as such is subject to its direction in all matters concerning money or property which may have come into his possession by virtue of his office. It is claimed, however, by the trustee, that he is only responsible for so much of the money as actually came into his hands under such reversed decree; that in the action referred to he was the representative of the estate of the bankrupt, and as such had a right to employ an attorney; that he was not guilty of any negligence in the matter of the employment of such attorney, and cannot, therefore, be made personally responsible for the wrongful act of the attorney in appropriating a part of the moneys received on said judgment in payment of the fee claimed by him. It may be conceded that such would be the rule if the question were presented upon the settlement of the trustee’s account in the estate in bankruptcy, but, as between the trustee and this petitioner, a stranger, the trustee cannot be permitted to avoid compliance with the final decree of the United States Circuit Court directing him 'to make restitution of moneys received by him under the reversed decree by the plea that a portion of such money was unlawfully appropriated by his attorney in the action in which such decree was rendered. The money received by his attorney was, in judgment of law, received by the trustee, and must be restored by him to the petitioner.
2. The judgment of the Circuit Court, in so far as it relates to costs, can only be enforced by execution or by action. It cannot be enforced in this summary proceeding, as it is conceded that there are not now, and never have been, any funds in the hands of the trustee belonging to the petitioner or to the estate of the bankrupt with which to satisfy the same.
The motion that the trustee be directed to pay such costs is denied, without prejudice to the right of the petitioner to enforce judgment for the same by action or execution, as he may be advised. In all other respects the prayer of the petition is granted.
Reference
- Full Case Name
- In re HOWARD
- Cited By
- 5 cases
- Status
- Published
- Syllabus
- 1. Bankruptcy — Power op Court — Direction op Trustee. A trustee in bankruptcy is an officer of the court, and as such Is subject to its direction by order made in summary proceedings in all matters concerning money or property which may have come into his possession by virtue of his office. 2. Same — Liability op Trustee — Restoration op Fund Erroneously Paid His Attorney. A trustee in bankruptcy, who as plaintiff in a suit in another jurisdiction has been required by the final decree of the court to make restitution of a fund which had been paid over to his attorney under a prior decree in the cause, which was reversed, cannot avoid compliance with such decree on the ground that his attorney retained a portion of the fund in payment of his fees and disbursements, and refuses to surrender the same; that being a matter with which the defendant in the suit who has been adjudged the true owner of the fund has no concern, and the receipt of the money by his attorney being in law its receipt by the trustee. 3. Same — Enforcement op Judgment for Costs — Power op Court. A court of bankruptcy cannot, by a summary order, require a trustee to pay a judgment for costs rendered against him in another jurisdiction, where there are no funds of the estate in his hands.