144 F. 147 | D. Or. | 1906
On the dismissal of the petition of certain creditors praying that S. E. Hines be adjudged a bankrupt, the respondent filed a cost bill, aggregating $ 1,939.30, which he claims should be adjudged as costs against the petitioners, under section 3c of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 546 [U. S. Comp. St. 1901, p. 3423]). When the petition was filed to have Hines adjudged a bankrupt, there was an action pending against him by J. 11. Guerry, who had previously attached a stock of merchandise of the respondent, which was at the time in the custody of the sheriff.
The question is now presented whether these costs, or any part of them, should be taxed against the petitioners, under this bond or otherwise. The statute relied upon by the respondent for the recovery of such costs, expenses, and damages provides, among other things, that:
“Whenever a petition is filed by any person for the purpose of having another adjudged a bankrupt, and an application is made to take charge of and hold the property of the alleged bankrupt, or any part of the same, prior to the adjudication and pending a hearing on the petition, the petitioner or applicant shall file in the same court a bond * * * in such sum as the court shall direct, conditioned for the payment, in ease such petition is dismissed, to the respondent, his or her personal representatives, all costs, expenses, and damages occasioned by such seizure, taking, and detention of the property of the alleged bankrupt. If such petition be dismissed by the court or withdrawn by the petitioner, the respondent or respondents shall be allowed all costs, counsel fees, expenses, and damages occasioned by such seizure, taking, or detention of such property. Counsel fees, costs, expenses, and 'damages shall be fixed and allowed by the court, and paid by the obligors in such bond.”
It will be seen that this statute is special, and intended to cover a given case. Where the property of the bankrupt is taken charge of and held upon the application of the petitioners, the bond spoken of is required as a prerequisite to making the order. As one court has said, it is analogous to taking property under attachment; the bond being required as a prerequisite to the issuance of the provisional writ. When such a bond has been filed, with the conditions prescribed, then the remedy which the statute has indicated may be pursued, and it is only in that case that the respondent can have the benefit of the statute. It does not apply to costs and expenses generally, but to a case where the property has been taken charge of or seized, to be held during the pendency of the adjudication touching the application to have the respondent declared a bankrupt. This doctrine has been previously declared in several cases. In the case of In re Ghiglione (D. C.) 93 Fed. 186, it was held that the provisions of section 3e of the bankruptcy act (30 Stat. 546, c. 541 [U. S. Comp. St. 1901, p. 3423]), for the allowance of costs, counsel fees, expenses, and damages to the respondent when a petition in involuntary bankruptcy is dismissed, apply only to cases where an application to seize
“But, in order to prevent a fraudulent disposition of the property pending the proceedings, it permits a seizure of the assets before the hearing, upon certain allegations, and the execution of a bond to pay the damages which the debtor may sustain by reason of the seizure, if upon a final hearing it is adjudged that the same was wrongful, in the same manner as in ordinary eases, when the same object is sought by a resort to proceedings by attachment. The only innovation to be found in the act is that attorney’s fees and expenses incurred by the successful debtor are to be elements of the damages awarded to him, not for the wrongful proceedings to have him adjudged a bankrupt, but for the wrongful ‘seizure, taking, and detention’ of his property.”
Now, to apply these authorities giving construction to section 3e, it would seem that the respondent is not entitled to recover and have assessed against the petitioners much the larger portion of his cost bill. The injunction bond which was given in the present case cannot, under any process of reasoning, take the place of the bond intended to be executed under section 3e. Indeed, in the present instance, the property of the debtor was not taken into custody. The only purpose of the injunction was to restrain the debtor, and the sheriff, who liad custody of the stock of goods, from disposing of them during pend-ency of the proceeding under the petition to have the debtor adjudged a bankrupt; the purpose being to have the matter remain in statu quo until it could be ascertained whether or not the defendant was in reality a bankrupt and whether his property should be taken charge of by the bankruptcy court. The conditions of the injunction bond are widely different from those prescribed for the bond to be given under section 3e, and if 1 were to look at the bond alone I could not adjudge, under its conditions, the relief demanded by way of costs ; but, it not having been intended for that purpose, the defendant cottld in no way be entitled to the relief which he seeks under section 3e, because the relief there provided for can only be had upon the bond contemplated by the section. I must hold, therefore, that the plaintiff is not entitled under his cost bill to the attorney’s fees prayed for. nor to the keeper’s fees, damages, or expenses claimed by Hines for attending court.
The order will therefore be that the costs last indicated be taxed in favor of the respondent and against the petitioners, but none other.