In re G. W. Giannini, Inc.

90 F.2d 445, 111 A.L.R. 1492, 1937 U.S. App. LEXIS 3845
CourtCourt of Appeals for the Second Circuit
DecidedJune 7, 1937
DocketNo. 396
StatusPublished
Cited by6 cases

This text of 90 F.2d 445 (In re G. W. Giannini, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re G. W. Giannini, Inc., 90 F.2d 445, 111 A.L.R. 1492, 1937 U.S. App. LEXIS 3845 (2d Cir. 1937).

Opinions

SWAN, Circuit Judge.

This appeal presents the question whether an attorney whose representation of a creditor disqualifies him under a local bankruptcy rule for retention as attorney for the receiver, but who is nevertheless so retained pursuant to an order of the court after disclosure of the facts, is entitled to compensation for services rendered as the receiver’s attorney. ,

G. W. Giannini, Inc., was adjudicated a-bankrupt upon its voluntary petition. Shortly thereafter a receiver was appointed upon the petition of Elizabeth Sonn, a creditor, who was represented by attorney Wittner, the present appellant. The receiver applied for leave to retain Mr. Wittner as his attorney, accompanying his petition with an affidavit by Mr. Wittner which disclosed that he represented a creditor of the bankrupt and had applied on her behalf for the appointment of the receiver. The affidavit stated also that an employee of the bankrupt had requested Mr. Wittner to file a wage claim for him, and that, except as above noted, the affiant did not represent any person interested in the estate and had had no business or professional relations with the bankrupt or the bankrupt’s attorney during the preceding year. By order of July 8, 1935, the receiver was authorized by Judge Goddard, without opinion, to retain Mr. Wittner as his attorney. On July 15th the latter conducted an examination of the bankrupt’s officers and employees before the referee in bankruptcy. On the following day Mr. Giannini, who was the president and also a creditor of the bankrupt, obtained an order directing Mr. Wittner to show cause-why his appointment as attorney for the receiver should not be vacated and an order be entered directing that no compensation be paid him as receiver’s attorney. In opposition to the motion, Mr. Wittner filed an affidavit which set forth that the motion was not made in good faith but for the purpose of blocking the said examination; that he had discovered that the bankrupt’s officers were concealing assets of the' estate; and that the interests of all creditors would be best served by permitting him to continue his search for concealed assets. On July 17th Giannini’s motion was denied by Judge Bondy, without opinion. Thereafter the appellant made application for an allowance for services rendered as the receiver’s attorney. This was opposed by the trustee in bankruptcy upon the ground that rule 8 of the local Bankruptcy Rules forbad an allowance. The referee so held, and his report was confirmed by Judge Knox. From this order the appellant lias appealed by leave of this court.

Rule 8 is printed in the margin.1 It cannot be denied that by the letter of the rule [447]*447the appellant was disqualified for appointment as attorney for the receiver and is forbidden to receive compensation for services rendered as such. Admittedly he was the attorney for a creditor and had appeared and acted for her in the bankruptcy proceedings in obtaining the appointment of the receiver. Such an application is within the terms of the rule. In re H. L. Stratton, Inc., 51 F.(2d) 984, 988 (C.C.A.2).

The appellant contends, however, that the two orders made by Judge Goddard and Judge Bondy, respectively, after full disclosure of the facts, constitute a waiver of rule 8; or, in any event, constitute “the law of the case” to be applied on his application for compensation.

General Orders of the Supreme Court may be supplemented by local rules. See Weil v. Neary, 278 U.S. 160, 169, 49 S.Ct. 144, 148, 73 L.Ed. 243; In re Mandell, 69 F.(2d) 830 (C.C.A.2.). No question has been raised as to the power of the District Court to supplement General Order 44 (288 U.S. 635; 11 U.S.C.A. following section 53) by local rule 8. As stated in the Neary opinion, an authorized rule of court “has the force of law.” Some rules of court expressly reserve to the sitting judge discretion to make exceptions in the application of the rule. Such were the rules involved in Weil v. Neary, supra, and in Holmes v. Ginter Restaurant Co., 54 F.(2d) 876 (C.C.A.1). Other rules either contain no reservation of the power to make exception or else, granting the power, restrict its exercise to a particular time or manner. The authorities are not in entire accord as to whether such rules may be waived. The cases cited by the Supreme Court in the Neary Case for the proposition that an authorized rule of court has the force of law are to the effect, that the ride must he applied until repealed by the authority making it; and hence that a single judge can not waive a rule not his own. Rio Grande Irrigation Co. v. Gildersleeve, 174 U.S. 603, 608, 19 S.Ct. 761, 43 L.Ed. 1103 (time limit for motions to set aside finding or judgment rendered in vacation) ; Thompson v. Hatch, 3 Pick. (20 Mass.) 512 (time for filing pleas in abatement); District of Columbia v. Roth, 18 App.D.C. 547 (time for filing transcript of record on appeal) ; Murphy v. Gould, 39 App.D.C. 363 (same) ; State v. Lankford, 158 Ind. 34, 62 N.E. 624 (index to record on appeal required). See, also, Superior Fire Ins. Co. v. Martin, 80 F.(2d) 275, 277 (C.C.A.7) (only cases at issue to be placed on calendar by clerk). Cf. Wallace v. Clark, 29 Fed.Cas. p. 72, No. 17,098 (C.C.Mass.), where the rule-making court waived its own rule setting a time for the filing of pleas in abatement. However, Chief Justice Taney, in United States v. Breitling, 20 How. (61 U.S.) 252, 254, 15 L.Ed. 900, stated that “it is always in the power of the court to suspend its own rules, or to except a particular case from its operation” ; and many rules have been construed as merely directory, with the result that disregard of the rule is not ground for dismissal of the appeal or reversal. Southern Pac. Co. v. Johnson, 69 F. 559, 562 (C.C.A.9) (time for presentation, allowance, and certification of bills of exception) ; State of Florida v. Charlotte Harbor Phosphate Co., 70 F. 883, 886 (C.C.A.5) (return day for appeals and time for filing transcript) ; Love v. Busch, 142 F. 429, 431 (C.C.A.5) (same) ; Strohbar v. Dwinnell, 29 F.(2d) 915 (C.C.A.5) (time for taking testimony in bankruptcy discharge) ; Sun Oil Co. v. Gregory, 56 F.(2d) 108 (C.C.A.5) (submission of special charges prior to oral argument) ; In re Walsh, 69 F.(2d) 971 (C.C.A.5) (time for hearing on motion for new trial). See, also, Freeman v. United States, 227 F. 732,(C.C.A.2) (time for filing transscript) ; Woodbury v. Andrew Jergens Co., 61 F.(2d) 736 (C.C.A.2) (time for settling record).

But if a rule promulgated by the judges of the District Court is construed to be mandatory, rather than merely directory, we agree with the former group of decisions that a single judge has no discretion to dispense with it. It is true he has power to act in disregard of it, for he has jurisdiction to make erroneous as well as lawful orders, and it matters not whether the error consist in violating a rule of court, or disregarding a statutory provision not relating to jurisdiction, or misapplying a general legal principle. Abbott v. Brown, 241 U.S. 606, 609, 36 S.Ct. 689, 60 L.Ed. 1199 (time for motion for new trial). Rule 8 lays down a prohibition against retaining or compensating an attorney who possesses the disqualifications therein prescribed. We [448]*448t&rnk it was intended to be a mandatory prohibition, leaving no discretion to the individual judge to waive its provisions in a particular case.

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Bluebook (online)
90 F.2d 445, 111 A.L.R. 1492, 1937 U.S. App. LEXIS 3845, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-g-w-giannini-inc-ca2-1937.