103 F. 854 | D.S.C. | 1900
The above-named was adjudged a bankrupt in involuntary proceedings November 18, 1899, upon tbe petition of certain creditors. Tbe same creditors had previously instituted proceedings in attachment in the state court, early in October; and the stock of merchandise was seized in those proceedings, which attachment, however, has been dissolved in tbe state court. A trustee in bankruptcy was duly appointed, and in due course an accounting was had before the referee, and the bankrupt was examined. As tbe result of such examination and accounting, the referee, in a careful and
The testimony shows that Anderson conducted a mercantile business at Timmonsville, in connection with his brother, during the year 1898, and that about the end of that year a fire occurred, as a result of which the business was broken up, and that he commenced business on his own account, with a part of the damaged stock, and with some money received as insurance. The amount of this capital is stated as $3',700, but upon the argument before me it was contended that lliis was an overestimate. No books of account were kept, or at least no books from which the true condition of the business could be ascertained. Kuril as were kept are of such fragmentary character that it is impossible to ascertain from them any correct, or approximately correct, idea as to the business. It is not alleged that the failure to keep proper books was due to the fraudulent purpose of concealing his true condition, and the testimony tends to show that it was to be attributed, rather, to his inexperience and incapacity, lie is a very young man, and had had very little knowledge of business. Upon'the report of the referee, it seemed to me incredible that such a large deficit should honestly occur in a business of such small magnitude within such a comparatively brief space of time, and as the referee had evidently considered the ease with care and deliberation, and is a lawyer of the highest character and intelligence, I was greatly inclined to accept his report as conclusive; for, having opportunity of seeing the witnesses, which the court had not, his conclusions were justly entitled to great weight. Rut, inasmuch as the enforcement of any order made by me1 would involve imprisonment for an indeterminate period, I felt it to be my duty to proceed with caution, and the bankrupt was brought before me. Upon that hearing it transpired that he had had dealings with the Rank of Timmonsville during the year 1899, and it did not appear that his account with that bank had been produced before the referee. Thereupon an order was made for an examination of this account, and 1 have before me the statement of the cashier, showing the transactions of the bankrupt. I have not the advantage of any comment upon this testimony by the counsel for the creditors, and therefore accept the exhibits as filed by the cashier as true. Exhibit A, which is entitled, “Mr. O. Anderson in Account with the Rank of Timmonsville,” shows the debits and credits from January 17,1899, to October 3, 1899, with one item of $2.32, amount paid to Thompson, trustee, on December 12th. This account shows deposits of $8.629.66, and payments to .the same amount. It, therefore, would not affect the figures given or the results reached by the referee. It tends to show that the volume of business transacted during the year was considerably larger than might he inferred from the referee’s report. Exhibit R, however, which is entitled, “Memorandum of Cash Received in Payment of Draffs Kent Me for Collection on C. Anderson,” shows that the hank paid out during the' period beginning February 4th and until September 19th, to the various mercantile establishments whose names are given, the sum of $1,664.92. Exhibit G, which,
The next question to be considered relates to the claim of the homestead exemption. • The trustee has set apart the wearing apparel of the bankrupt in his possession, of the value of $50, and one bicycle, of the value of $25, and allows him out of the cash in hands of trustee (being proceeds of the sales and stock of merchandise in the store in Timmonsville, and sold by the trustee under order of this court) the sum of $425. He also sets apart the dwelling house and lot in the town of Timmonsville, of the value of $1,000.
First, as to the personal exemption: The constitution of South Carolina exempts from attachment, levy, and sale personal property to the value of $500, or so much thereof as the property is worth, if its value is less than $500. So the exemption of the wearing apparel and bicycle, of value $75, is allowed. The amount of $425 of cash from the proceeds of the sales of stock of goods cannot be allowed. The proof shows clearly that these goods had not been paid for. Claims of creditors to the amount of about $10,000 for goods sold have been proved against the bankrupt, and are unpaid. One of the provisos of section 32, art. 2, of the constitution, under which the homestead is claimed, is as follows:
“That no property shall he exempt from attachment, levy or sale for taxes 'or for payment of obligations contracted for the purchase of such homestead or personal property exemption or the erection or making of improvements or repairs thereon.”
Second, as to the real estate: The constitution allows a homestead in lands to the value of $1,000, with the same proviso above recited; and it is claimed by tbe creditors that the improvements upon the real estate assigned as homestead were made with money derived from the sales of the merchandise, and therefore it is in the nature of purchase money, and that such exemption should not be allowed. There is some force in this contention, and 1 have not been able to reach a conclusion with reference to it entirely satisfactory to my mind. This real estate was purchased by the bankrupt in July, and the .title was taken in his wife’s name. The house was erected subsequent to that date out of moneys received by the bankrupt at his store. Inasmuch as there is proof that the bankrupt at the time when he commeuced business, in January, was iu possession of funds to tbe amount of $1,000, at least, and at tlie'time when the lot was purchased, there is not sufficient evidence that he had such contemplation of bankruptcy as would lead to fraudulent diversion of moneys properly belonging to his creditors in the improvement of the homestead. I am inclined to allow this exemption, and do so order. Inasmuch, however, as the proof tends to show that the house and lot exceed $1,000 in value, the case is recommitted to the referee, with directions to have appraisers appointed, — one to be selected by the bankrupt, one by the trustee, and one by himself, — who shall appraise the homestead. If it exceeds in value $1,000, it will be assigned as homestead upon the payment to the trustee of any sum in excess of the amount of $1,000.
The next question relates to the allowance of $90 to W. F. Clayton, Esq., as attorney for the bankrupt, to which allowance the creditors have excepied. 'Section 64b of the bankrupt act, which provides for the payment of costs in the administration of the bankrupt estate, provides for “one reasonable attorney’s fee, for tbe professional services actually rendered, irrespective of the number of attorneys employed, to the petitioning creditors in involuntary cases, to the bankrupt in involuntary cases while performing the duties herein prescribed.” Tbe amount that should be allowed to the attorneys for the bankrupt in involuntary cases should be limited to compensation for such services as are presumptively of benefit to the estate. The bankrupt in such cases is required to prepare schedules, which require the services of a lawyer; and, if he is compelled to attend references before the referee in matters involving the conduct of his business prior to the bankruptcy, he should be allowed services of counsel, to the extent of protecting his rights on the inquiries so made. This is in aid of the proper administration of the estate, and allowances out of the estate should be strictly limited to services so rendered. Ko allowance should be made for services rendered in defending the bankrupt from charges of fraudulent conduct or concealment of property. I am of opinion (hat the allowance of $90, under the circumstances, is not excessive, and the report of the referee is therefore confirmed.