In re Sweetser

240 F. 174, 1914 U.S. Dist. LEXIS 1308
CourtDistrict Court, D. Massachusetts
DecidedOctober 30, 1914
DocketNo. 7811
StatusPublished

This text of 240 F. 174 (In re Sweetser) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Sweetser, 240 F. 174, 1914 U.S. Dist. LEXIS 1308 (D. Mass. 1914).

Opinion

MORTON, District Judge.

This matter relates to the final account of the assignees in bankruptcy of Elbridge E. Sweetser, who was duly adjudicated bankrupt on his own petition in this court on July 23, 1878, under the law of 1867, and to the petition of the assignees fof an [177]*177allowance of extra compensation. John C. Hammond and others, creditors, have appeared in opposition to the account and to the allowance of the petition for extra compensation; and they, and the assignees, and other parties interested have been heard at length.

Certain items relating to the early expenses of the assignees and dividends paid to creditors were objected to because not itemized as required, and were passed at the hearing with the understanding that itemized accounts relating thereto would be submitted by the assignees to the inspection and examination of the objecting creditors. No further objections have been made to those items, and I assume that they are correct and should be allowed.

The remaining items, so far as objected to, involve matters relating to the conduct of the assignees, and may be properly corisidered in connection with their petition for an allowance for extra compensation, which presents the principal question-at issue.

The assignees were appointed March 19, 1878, and consisted at that time of Mr. Dowse, who has continued to act as one ever since, and Mr. Dibble. Dowse, at the time of his appointment, was counsel for a firm by the name of Dolliver Bros., who had the second largest claim against the bankrupt estate, and Dibble was counsel for the Florence Machine Company, which had the largest claim against the estate, and with which Sweetser had been doing business several years. The assets of the bankrupt’s estate, so far as then known, consisted of about $1,200. Dowse and Dibble administered these assets and filed an account in May, 1887. Objections to it were filed soon after. So far as appears, they were never pressed. No evidence in support of them was introduced before me. I find that that account is correct, and should be allowed.

Mr. Kyle was admitted to the bar in 1880 and opened'an office in Boston. At that time his brother was treasurer of the Florence Machine Company. In the summer of 1881 Mr. Kyle was employed as counsel for the Florence Machine Company, an<J learned of what turned out to be a valuable vested interest in Sweetser under the will of one S. O. Richardson, which was subject to three'intervening life estates. In the fall of that same year, the Florence Machine Company brought a bill in equity in the Supreme Judicial Court in Suffolk county, to reach and apply that interest in its favor, on the ground that it had not passed to Sweetser’s assignees in bankruptcy. Mr. Kyle acted as counsel for the Machine Company until its dissolution in 1893, and he acted as counsel for its successor, the Central Oil & Gas StoVe Company. In 1882 Dibble resigned as assignee; Mr. Kyle was appointed in his place. He informed his coassignee of the bankrupt’s interest in the trust fund, and assisted Dowse in preparing a bill in equity to enforce the rights of the assignee thereto, which was duly filed in this court in September, 1882. The bankrupt’s interest in the trust fund might have been at once sold out by the assignees. It was, however, of very doubtful character, was expectant on three life estates, and was claimed by another party. In view of these facts, .it would at that time have brought very little, if put up for sale. The assignees therefore determined that, instead of selling out this inter[178]*178est, they would hold it and would keep the estate open. Of the wisdom of this decision there can be no doubt.

From 1882 to the death of the last life tenant, matters, according to Mr. Kyle’s statement, remained dormant. The assignees were responsible for the estate, and did whatever was necessary to hold the interest in the trust fund. ■ They were admitted as parties to the suit pending in the Supreme Judicial Court which had been brought by the Florence Machine Company; they filed an .answer therein, and from time to time they examined the records in that court and in this court, and in the probate coürt in Middlesex county, where the Richardson estate was in the process of settlement; and they attended to such incidental matters as came up. All parties seemed to have acquiesced in the policy of watching and waiting suggested by Mr. Kyle until the life estates fell in. Other suits were brought by Mr. Kyle for the Florence Machine Company against Sweetser, and he was busy in reference to those matters; but manifestly what he did as 'counsel for the Florence Machine Company can furnish no ground for extra compensation as assignee, and no such claim is here made.

The last of the life tenants died in December, 1900. The interest of the bankrupt in one-half of the trust fund, which had originally been $35,000, thereupon became complete, and he became entitled to immediate possession thereof. Up to this' point all parties were in friendly relations. • The legal situation at that time was, as to its important elements, as follows:

Mr. Hammond had become the owner of the claims and interests of the Florence Machine Company, the Monitor Oil Stove Company, and the Central Oil & Gas Stove Company. There was pending in the Supreme Judicial Court the bill in equity brought by the Florence Machine Company in 1882 to reach and apply Sweetser’s interest under the trust fund to its claim against him, in which Mr. Hammond had become the plaintiff and the assignees had appeared as adverse parties. Certain assignments of his interest in the trust fund, made by Sweetser while this suit was pending, had also become vested in Mr. Hammond. Subsequent to the first bankruptcy, Sweetser had given new notes to the Florence Machine Company for the same debt which it had proved against him in that bankruptcy. These notes had passed to Mr. Hammond with the rest of that company’s claim against Sweetser. Mr. Hammond therefore had at this time and was asserting, first, the equitable attachment in the suit to reach and apply the fund to the Florence Machine Company debt; second, the assignment from Sweetser' of all his interest in the trust fund; third, the claim in bankruptcy which had been proved against the Sweetser estate; and, fourth, the claim upon the new notes made by Sweetser after the first bankruptcy. There was no property whatever in the estate, and, if the Hammond claim to the trust fund should be established, nothing to pay the expenses of the litigation by the estate in resisting said claim. The bill in equity brought by the assignees in the United States District Court in 1882, asserting their right to the Sweetser interest in the trust fund, in opposition to the rights asserted by the parties through whom Mr. Hammond was claiming, was also pending. Just before the death of [179]*179the last life tenant, Sweetser had gone again into1 bankruptcy under the act of 1898 (30 Stat. 544, c. 541), and was endeavoring to defeat the right of his first assignee in bankruptcy to the trust fund. His trustee under the second bankruptcy was also claiming the fund. Almost 23 years had elapsed since the bankruptcy, and most of the claims proved in bankruptcy against Sweetser were in the hands of other persons than the original creditors, a substantial part of them having been purchased upon speculation for a very small proportion of their face value, and some of them had been paid by Sweetser or otherwise extinguished. ■

[ 1 ] Upon the death of the life tenants, Mr.

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Related

Hammond v. Whittredge
204 U.S. 538 (Supreme Court, 1907)
Whittredge v. Sweetser
75 N.E. 222 (Massachusetts Supreme Judicial Court, 1905)
Kyle v. Hammond
225 U.S. 692 (Supreme Court, 1912)
In re Many
16 F. Cas. 675 (S.D. New York, 1877)
In re Sweetser
128 F. 165 (D. Massachusetts, 1904)
Dowse v. Hammond
130 F. 103 (First Circuit, 1904)
In re Sweetser
131 F. 567 (D. Massachusetts, 1904)
In re Sweetser
157 F. 567 (U.S. Circuit Court for the District of Massachusetts, 1907)
In re Sweetser
168 F. 1018 (U.S. Circuit Court for the District of Massachusetts, 1909)
In re Kyle
181 F. 617 (U.S. Circuit Court for the District of Massachusetts, 1910)
In re Kyle
185 F. 219 (D. Massachusetts, 1910)
Kyle v. Hammond
186 F. 989 (First Circuit, 1911)
Kyle v. Hammond
192 F. 559 (First Circuit, 1911)
In re Sweetser
240 F. 167 (D. Massachusetts, 1907)

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Bluebook (online)
240 F. 174, 1914 U.S. Dist. LEXIS 1308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sweetser-mad-1914.