197 F. 1012 | E.D. Mich. | 1910
Application is now made to me to provide for the appointment of a trustee for the individual estate of Cameron Currie, as distinguished from the partnership estate. Up to this time Mr. Austin has acted as trustee generally for both firm and individual estates.
On the other hand, the appointment of different trustees for the different estates should be avoided wherever possible. The power is not beyond doubt, such appointment may cause more complications than it cures, and it is certain to promote contests and expense. My conclusion is that the court has the discretionary power to provide for separate trustees, but this power should be exercised only in case of special and peculiar necessity.
In this case, Austin, trustee, has successfully prosecuted to a decree for $90,000 a case in the Wayne Circuit Court, in chancery, against Hayden, Stone & Co., upon the theory that defendants were indebted to him, as trustee for firm creditors, and that certain of the firm creditors had special and peculiar rights of recovery against Hayden, Stone & Co. If the defendants therein submit to the decree, without appeal, or if it is affirmed on appeal, they claim a right to resort for indemnity to certain property said to constitute their security, which same property is said to have been the individual estate of Cameron Currie, and to have been expressly pledged (perhaps subject to Hayden, Stone & Co.’s lien) to secure some of his individual creditors. Thus a possible, or probable, conflict of interest between firm and individual creditors appears. To protect the latter, an appeal to the Supreme Court of the state of Michigan from this decree may be advisable; particularly if the defendants to the record do not appeal; but Austin, trustee, cannot appeal from the decree in favor of Austin, trustee. So if the trustee, claiming a greater sum, should appeal, it might be desirable for the individual creditors to be heard in the Supreme Court in opposition to the demand for a larger decree; but Austin, trustee, cannot prosecute and defend the same appeal.
It does not follow that there must be a separate trustee, if there is any other way in which the rights of the individual creditors can be
The meritorious question argued before me was whether the now petitioning creditors had so far acquiesced in the Wayne Circuit Court proceedings that it would be inequitable to permit them, in their own name, or by new trustee, to intervene and complain of what has been done; and this question is wholly and solely one for that court, not for this. An application to that court B>- creditors or by a new trustee would be decided according to the rule of law and due exercise of discretion as to that court, might seem proper. The entire adversary conflict with Hayden, Stone & Co. is in that court, and every question there arising should be decided without embarrassment or suggestion of embarrassment from anything which I have said in the foregoing memorandum.
The petition for a separate trustee is denied, with leave to renew the same if it hereafter appears that the Wayne Circuit has denied the individual creditors’ petition to intervene, and that such denial was not on the merits of the application, but was on the ground that they cannot be heard unless they appear by their separate trustee.