United States v. Ward

257 F. 372, 1919 U.S. App. LEXIS 2211
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 3, 1919
DocketNos. 5223-5226
StatusPublished
Cited by17 cases

This text of 257 F. 372 (United States v. Ward) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Ward, 257 F. 372, 1919 U.S. App. LEXIS 2211 (8th Cir. 1919).

Opinion

CARLAND, Circuit Judge.

These are suits on bonds of referees in bankruptcy to recover fees, costs, commissions, and compensation alleged to have been illegally collected and received by them in excess of the amount allowed by law. They were brought by the United States on its own behalf and on behalf of various suitors and parties interested in the administration of bankrupt estates. The defendants in each case are the referees and the sureties on their official bonds. The items for which a recovery is sought are stated in detail in exhibits attached to the complaints. These items may be grouped under three heads: (1) Services for which the bankruptcy law fixes the compensation. (2) Services for which the compensation is fixed by the United States District Court. (3) Costs and expenses allowed by said court.

[1] The defendants filed general demurrers, which were sustained. The United States electing to stand on. its complaints, judgments dismissing the same followed. The condition of each bond sued upon was for the faithful performance of the official duties of the respective referees. The United States was the obligee, and the law provides that the bond may be sued upon, in the name of the United States for the use of any person injured by a breach of its condition. In our opinion, Congress intended that the bond should protect private individuals as well as the United States. The requirement that referees in bankruptcy should execute a bond for the faithful performance of their duties was an assurance to persons interested that, within the penalty of any bond taken from them by the United States their rights would be protected against any act or omission on the part of referees resulting to their injury. Howard v. United States, 184 U. S. 676, 692, 22 Sup. Ct. 543, 46 L. Ed. 754.

The case cited was an action by the United States, for the use of one David D. Stewart, against the sureties on the official bond of one Watson, formerly clerk of the United States Circuit Court for the Western District of Missouri. Stewart had brought a suit against Henry county, Mo., to recover the amount of three bonds issued by it. The county, when it answered, paid to Watson $2,525 as a tender to the plaintiff, and thought it was depositing the money in court; but Watson did not think so, and converted the same to his own use. The condition of Watson’s bond was that he would faithfully discharge the duties of his office and seasonably record the 'decrees and determinations of the court of which he was clerk. Not[375]*375withstanding Watson’s bond was silent as to his accounting for money coming into his hands as clerk, and notwithstanding there was nothing in the bond or in the law that provided for any one bringing a suit on the bond other than the obligee, the United States Supreme Court allowed a recovery against the surety, Howard. We therefore think that upon principle and authority, where a referee has collected, from parties or estates in bankruptcy proceedings, moneys as compensation that under no theory of the law was he entitled to, and these fees have been collected or withheld from parties who are numerous and the individual amounts small, the United States has the legal and moral right to bring one suit in behalf of all parties injured, to recover back compensation illegally exacted by him. Any other view would render a referee’s bond largely valueless in respect to such matters.

[2] The names of the individuals for whom the United States sues are not given in the complaint, but this is not always necessary. It is a matter upon which no issue can be made. American Bonding Co. v. Allison, 182 Fed. 810, 105 C. C. A. 242; Schott v. Youree, 142 Ill. 233, 31 N. E. 591; Clarkson’s v. Doddridge, 14 Grat. (Va.) 42; Boston El. Ry. v. Grace & Hyde Co. et al., 112 Fed. 279, 50 C. C. A. 239; United States v. Abeel, 174 Fed. 12, 98 C. C. A. 50.

[3, 4] Counsel seem to treat the items sued for as belonging all to one class, and the trial court so treated them; but manifestly they cannot be so treated. Coming to the merits, we think it must be conceded that where a duty is imposed upon a referee by the bankruptcy law, and compensation is also fixed by that law for the performance of that duty, no power or authority exists in the United States District Court sitting as a court of bankruptcy to allow him any other or further compensation for the performance of the duty than that fixed by the bankruptcy law, and it must be further conceded that where the duty to be performed is a duty clearly imposed by the bankruptcy law upon the referee as such, and no specific compensation is fixed for the performance of said duty, the compensation fixed by the bankruptcy law (Act July 1, 1898, c. 541, 30 Stat. 544 [Comp. St. §§ 9585-9656]) as a whoie is the only compensation which the referee can receive or that the court has power to allow. Section 72 of the Bankruptcy Act as amended (section 9656) reads:

“Neither the referee, receiver, marshal, nor trustee shall in any form or guiso receive, nor shall the court allow him, any other or further compensation for his services than that expressly authorized and prescribed in this act.”

General Order 35 (89 Fed. xiii, 32 C. C. A. xiii) provides:

“The compensation of referees, prescribed by the act, shall be in full compensation for all services performed by them under the act, or under these general orders.” In re Halbert, 134 Fed. 236, 67 C. C. A. 18; In re Langford (D. C.) 225 Fed. 311, 314, 315; Dressel et al. v. North State Lumber Co. (D. C.) 119 Fed. 531.

The administration of the bankruptcy law existing prior to the enactment of the present one had been attended by grave abuses and scandals, resulting from the absorption of bankrupt estates in fees and costs of the officers connected with its administration. Congress therefore by the above legislation intended to cure the evil so [376]*376far as possible, and the courts should construe the law with reference to the object that Congress had in mind.

[5] The language of the complaint, in referring to the items which it is sought to recover, speaks of them as having been allowed to the referees. The trial court assumed, and it may have been justified in so doing; that it had the right to consider tie excess fees, costs, and compensation as having been allowed by the United States District Court. The case being thus viewed, it sustained the demurrer by invoking the general principle that, 'where a court has once acquired jurisdiction, it has the right to decide every question which arises in the cause, and its judgment, however erroneous, cannot be collaterally assailed. The general principle as stated is correct, but, like all general principles, is subject to many qualifications in its application. The District Courts have a general jurisdiction in bankruptcy, but they have no power, when exercising that jurisdiction, to allow a referee, under any form or guise, any other or further compensation for his services as referee than that expressly authorized and prescribed by the bankruptcy law. It cannot transcend the power conferred by law. If a court has jurisdiction of an action on a money demand, it cannot in that action imprison the defendant. If it has jurisdiction of an action for libel, specific performance of a contract cannot be decreed in that action. If it has jurisdiction of an action for the possession of real property, the court cannot in that action probate a will.

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Bluebook (online)
257 F. 372, 1919 U.S. App. LEXIS 2211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-ward-ca8-1919.