In re Babcock

2 F. Cas. 292, 1 Woodb. & M. 26

• Court: U.S. Circuit Court for the District of Massachusetts
• Decided: October 15, 1845
• Status: Published

Opinion

WOODBURY, Circuit Justice.

On the examination of the report of the commissioner, the conclusions formed by him from the facts proved, do not strike me as entirely just. It is conceded that Babcock was interested to the extent of one tenth with others in certain lands, about which a legal controversy arose with third persons. After it had continued some time in charge of Mr. Loring and Mr. Gray, as counsel for all the owners, some of whom had become insolvent, the counsel declined to proceed further, unless cthe solvent proprietors would become responsible for their services. I infer from the report that this was a responsibility for their future services; and hence if any account arose for services performed prior to that agreement, the estate of Babcock has, I presume, been charged with only one tenth of the amount. 'The spirit of that agreement should govern, after it -was made, till Bab-cock became a bankrupt. As I understand the report and the acts of the parties subsequent to it, the agreement was, that thenceforward Babcock should pay one half of the fees afterwards becoming due, and his estate probably has been charged with that half till his bankruptcy, deducting any sums paid by him on that account.

The only question here is as to the sendees performed by counsel after he became a bankrupt. As to those, it is found by the commissioner, that the assignee was advised to enter his appearance and acquiesce in the suit going on, and did right in continuing to make further defence. It is also found, that he was informed of the agreement in relation to the payment of costs. It does not, to be sure, appear by the commissioner’s report, that the assignee expressly stipulated to continue to pay the same proportion as Babcock had; and the claim for it is therefore disallowed by him. But it appears that he did not object to or dissent from that arrangement; and it is clear, that he assented to the further defence of the action for the benefit of the estate, with full knowledge of the agreement. It strikes me that, under such circumstances, it is just and reasonable to infer his acquiescence in the continuance of the payment of one half of the future expenses by Babcock’s estate. It seems equitable, also, to charge that estate with one half, as the estate was reaping any advantage likely to arise from a continuance of the defence on the former agreed terms, and without which terms the defence would not be continued. The opportunity thus enjoyed for an expected gain or benefit should not be taken without incurring the charge attached to it. He took it, then, cum onere; nor do I see any thing in the case to show the further defence by the assignee to have been improper, or likely to prove prejudicial to the estate. Nothing of that kind has been pointed out, and it is not to be presumed where the defense, as in this case, was advised by respectable counsel, and is justified by the commissioner.

TNOTE. For other eases involving the estate of this bankrupt, see In re Babcock, Case No. 696: Ex parte Winsor. Id. 17,884; and Winsor v. Kendall, Id. 17,886.]

In England, an assignee cannot commence and prosecute suits in equity so as to charge the estate with costs, unless he previously consults the creditors, and obtains the support of a majority of them. 1 Cooke, Bankr. Law, 292; 1 Atk. 91, 106. But here it was the defence of an old suit in equity, rather than the institution of a new one; and as the commissioner reports in favor of the propriety of the defence, I am not disposed to inquire further into that branch of the question. No objection being taken to the amount of any of the items in the account, the claim as made by the assignee is allowed.