Oscar C. Kolb, Bankrupt v. Robert A. Berlin, Trustee

356 F.2d 269, 1966 U.S. App. LEXIS 7081
CourtCourt of Appeals for the Fifth Circuit
DecidedFebruary 23, 1966
Docket22344_1
StatusPublished
Cited by11 cases

This text of 356 F.2d 269 (Oscar C. Kolb, Bankrupt v. Robert A. Berlin, Trustee) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oscar C. Kolb, Bankrupt v. Robert A. Berlin, Trustee, 356 F.2d 269, 1966 U.S. App. LEXIS 7081 (5th Cir. 1966).

Opinions

THORNBERRY, Circuit Judge:

The appellant-bankrupt is a federal civil service employee at Robins Air Force Base, Georgia. He filed his bankruptcy petition on March 18, 1963. Although no mention was made in the petition of accrued wages or annual leave, it [270]*270developed that at the time the petition was filed appellant was due $85.95 in accrued wages. In addition, a check in the net amount of $144.50, representing wages earned during the prior pay period and payable to appellant by his employer, had been processed but had not been delivered. Furthermore, it was established that as of March 18,1963, appellant had a balance of 144 hours of earned annual leave, valued at $288.00. The trustee thereupon filed an application to compel the appellant to turn over the total of the above amounts ($518.45).

The Referee, in a thorough and well-reasoned opinion, held that all the above interests were assets of the bankruptcy estate, ordered appellant to turn over to the trustee $230.45 (the total of the $85.95 in accrued wages and the check for $144.50), and further ordered that the bankrupt turn over to the trustee any payment for the 144 hours of earned annual leave which he might receive. The decision of the Referee was affirmed by the District Court on petition for review. We likewise affirm, for the reasons hereinafter stated.

The question to be determined is whether the above interests constitute property which under the provisions of the Bankruptcy Act1 vests in the trustee upon the filing of the 'bankruptcy petition. Each of the items will be discussed separately.

1. Accrued Wages of $85.95.

Appellant contends that under § 70a (5) of the Bankruptcy Act his accrued wages do not pass to the trustee since the United States, as sovereign, cannot be made to respond to levy or judicial process. Of course, the test under § 70a (5) is in the alternative — transferability or leviability. 4 Collier on Bankruptcy ¶ 70.15(2). In determining whether these accrued wages are transferable, we must first consider the possible application of the Assignment of Claims Act,2 which renders null and void transfers of any claim against the United States unless the statutory requirements are met.

This problem was considered by this Court in Segal v. Rochelle, 5th Cir. 1964, 336 F.2d 298. That case has now been affirmed by the Supreme Court in Segal v. Rochelle, January 18, 1966, 382 U.S. 375, 86 S.Ct. 511, 15 L.Ed.2d 428. There the Supreme Court reaffirmed the holding in Martin v. National Surety Co., 1937, 300 U.S. 588, 596, 57 S.Ct. 531, 81 L.Ed. 822, that the Anti-Assignment Act “must be interpreted in the light of its purpose to give protection to the Government” so that as between the parties effect might still be given to an assignment that did not comply with the Act.

The Court in Martin also stated: “An assignment ineffective at law may none the less amount to the creation of an equitable lien when the subject matter of the assignment has been reduced to possession and is in the hands of the assignor or of persons claiming under him with notice.” In Segal v. Rochelle, supra, the Supreme Court satisfied itself [271]*271that an assignment of the claims in question would be enforced in equity under Texas law and therefore found the claims to be transferable within the meaning of § 70a(5). In the instant case, it is equally clear that under Georgia law an assignment of appellant’s claim for accrued wages would be so enforced. See Atlanta Finance Co. v. Lunsford, 1924, 32 Ga.App. 787, 124 S.E. 813; Southern Railway Company v. Cole, 1934, 49 Ga.App. 635, 176 S.E. 512. Therefore, we hold that appellant’s accrued wages of $85.95 were property which could have been transferred under § 70a(5) and thus were vested in the trustee upon the filing of the bankruptcy petition.

2. Undelivered Pay-check for $H4.50.

Appellant’s argument here is that since the check had already been processed, he was in constructive possession of it and was thus entitled to a credit in the amount of the check against the sum of $300.00 which he paid for attorney fees and court costs after the bankruptcy petition was filed. The basis for this contention is that attorney fees and court costs have priority under § 64a (1) of the Bankruptcy Act, 11 U.S.C. § 104(a) (1).

The Referee correctly held this contention to be without merit. Of the $300.00, $50.00 was used to pay appellant’s filing fee and $50.00 was used to pay his wife’s fee (she also filed a bankruptcy petition). The remaining $200.00 was paid as attorney fees, but there is no indication of how much of this sum was paid for his wife’s attorney fees.

It is true that § 64a (1) of the Act lists “one reasonable attorney’s fee” among the debts which have priority, but it is clear that “[t]he amount of attorney’s fee to be charged the estate as an expense of administration is subject to the examination and approval of the court.” Watkins v. Sedberry, 1923, 261 U.S. 571, 575, 43 S.Ct. 411, 412, 67 L.Ed. 802. See also Texas Bank & Trust Co. of Dallas v. Crippen, 5th Cir. 1956, 235 F.2d 472. In other words, once the bankruptcy petition is filed, the award of an attorney’s fee is a responsibility of the Court which cannot be exercised by the bankrupt.

As to the court costs, § 64a(l) of the Act is itself sufficient answer to appellant’s contention, since it gives priority status only to persons other than the bankrupt who have paid his filing fees. There is no provision in the Act authorizing reimbursement to the bankrupt for costs which he has paid.

While conceding that the distribution of the bankruptcy estate is a duty which falls specially upon the bankruptcy court, appellant urges that no creditors have yet filed proofs of claim and therefore argues that to sustain his position would not frustrate the broad purpose of the Bankruptcy Act, which is to effect equitable distribution of the bankrupt’s estate among creditors. Kothe v. R. C. Taylor Trust, 1930, 280 U.S. 224, 227, 50 S.Ct. 142, 74 L.Ed. 382. As pointed out by the Referee, however, tardy creditors are still not precluded from filing claims under § 57(n) of the Act, 11 U.S. C. § 93 (n). In short, appellant may not administer his own estate without the intercession of a referee and a trustee.

3. Earned Annual Leave.

Under the provisions of 5 U.S.C. § 2062(c), appellant was entitled to accumulate unused annual leave for use in succeeding years not to exceed a total of thirty days. At the time he filed his petition, appellant had accumulated 144 hours of earned annual leave.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
356 F.2d 269, 1966 U.S. App. LEXIS 7081, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oscar-c-kolb-bankrupt-v-robert-a-berlin-trustee-ca5-1966.