Ex parte Hale

11 F. Cas. 178, 5 Law Rep. 403

• Court: U.S. Circuit Court for the District of New Hampshire
• Decided: December 15, 1842
• Status: Published

Opinion

STORY, Circuit Justice.

The petitioners are the solicitors of William Palmer in bankruptcy, who has been declared a voluntary bankrupt, and has been discharged by a decree of the district court from his debts provable under the bankruptcy. They ask payment to be made to them, out of the assets of the bankrupt, for all the disbursements, which they have made, and the fees, which they have earned, as solicitors of Palmer, in carrying on the proceedings for his benefit. Whether the assignee, or the creditors of the estate have had notice of this application or not, does, not appear upon the record, although certainly no order ought to be made, affecting the assets of the bankrupt in this case, without a full opportunity of appearing to, and being heard upon the matter of the petition, if they should desire it, before any order should be made. But without inquiring into the circumstances, X have no difficulty in pronouncing, that the petitioners are not entitled to any such relief as they ask, against the assets of the bankrupt. In respect to that portion of the costs and expenses, which have been incurred by the opposition and objections of a creditor of the bankrupt, those costs ■ and expenses were properly chargeable upon him, if, under all the circumstances, the district court should think he ought to pay them. If it has decided, that the creditor ought not to pay any such costs and expenses, then the solicitors are entitled to none, and must look exclusively to their client for reimbursement. If tin-district court has not been applied to to decree such costs and expenses against the creditor, the default is on the part of the solicitors, or their client, in not procuring such decree, or in not taking security for the costs and expenses, according to the rules of the court — Qua cunque via data est, the solicitors are not entitled to any remedy against the assets thereof.

As to the other expenses incurred by the solicitors in prosecuting the voluntary petition of the bankrupt to obtain the benefit of the bankrupt act of 1841, c. 9, I can perceive no ground, upon which payment can be decreed therefor out of the assets of the bankrupt. They were incurred for his sole personal benefit, and not for the benefit or at the instance of his creditors. He, and he only, therefore, ought to bear them. It would, or at least might, have been different, if the costs and expenses had been incurred by a creditor in prosecuting a petition against a bankrupt, in invitum, to have him decreed a bankrupt; for then and in such a case the proceedings and decree might be said to be for the benefit of all the creditors. But, here, there is no ground upon which the court can say that the costs and expenses are to be a charge upon the assets in bankruptcy. I shall direct a certificate accordingly to be sent to the district court.

The certificate was as follows: Ex parte Hale and Wiggins, Petitioners in the Bankruptcy of William Palmer. It is ordered by the court, that the following certificate be sent to the district court, upon the question adjourned into this court, and in answer thereto, namely: It is the opinion of the circuit court, that the petitioners have no right to have the costs, fee, expenses, and disbursements, stated in their petition, paid out of the assets of the said William Palmer, the bankrupt; but that the same are a personal charge, to be borne by him exclusively.