83 F. 772 | U.S. Circuit Court for the District of Southern New York | 1897
This is a motion (a) to confirm the report of the master, and (b) .to direct the receiver to transmit the balance of the funds in this jurisdiction to the cour t of primary jurisdiction in Connecticut for distribution. Upon the argument there was practically no objection to the report of the master. Since the argument a letter has been received from the attorney for several creditors, whose claims aggregate a little more than $3,000, asking to be allowed to appear, to file objections, and submit affidavits in opposition. This request is denied. Abundant notice was given to all creditors of the proceeding before the master, full opportunity was given for all to appear, the testimony has all been taken and closed, and the whole proceeding should not now he reopened to allow the dilatory creditors to delay the active ones by belated appearances, objections, and testimony. The report of the master is therefore confirmed, and the accounts of the receiver settled in conformity therewith. The allowances for receiver and his counsel are also settled, as suggested by the master, at $5,000 for each, respectively. Moreover, inasmuch as it appears that by reason of the investigation of the accounts of the insolvent corporation, which was conducted by an expert accountant retained and paid by certain creditors; a large sum of money ($20,000) was realized for tbe receivership, it is proper that the expense of such investigation should be borne by the fund, and not by individual creditors. The receiver will therefore repay to the attorneys for those creditors their disbursements for such accountant, which the master reports amount to $480.25. The motion to allow a further sum to said attorneys as counsel fee is denied. The allowance to attorneys who conducted the proceedings to recover the $20,000 must he taken as covering all services other than those of the accountant. When the accounts, etc., were sent to the master, he was instructed to report as to the claims of creditors. Hearings thereon have been had,
There is a considerable fund in the hands of receivers in Connecticut. There is also nearly $80,000 within this jurisdiction (subject to reduction by payments for receiver, counsel, etc., already approved). The claims of the “resident” creditors aggregate less than $50,000, and in this district the rule of distribution above referred to is well settled. There are, however, some creditors, whose claims aggregate many thousands of dollars, who insist that, although actually nonresident, they are entitled to share on the ‘same basis as the 'resident creditors. The equity upon which this court protects resident creditors is found in the circumstance that the interference and intrusion of the federal court has' deprived residents of the state of their remedies under state laws by attachment or similar process ; that, had this court not interfered, such creditors would have secured their claims out of the tangible property of the insolvent within this jurisdiction, and on the strength of which they gave credit to the insolvent. ' The nonresident creditors above referred to insist that under the laws of the state they, equally with residents, were entitled to the same remedies, and that, therefore, their exclusion
There are, however, nonresident creditors, who were not, at the time receivers were appointed, in any position to avail themselves of remedy by attachment, etc., in the state courts. Their claims aggregate many thousand dollars. They insist ilia.t the rule of distribution followed in this district is inequitable, and not supported by precedent, and it is quite apparent that they have the means and the desire to secure a review of any decision of this court by the appellate tribunal. Tills question has never been presented to the court of appeals, and in the condition of the calendars many months must elapse before a decision in that court could be obtained. Moreover, the question seems never to have been squarely presented or flatly decided in the supreme court of the United States, and it is a question which must be continually presenting itself in nearly every federal district in the United Slates. Under these circumstances it is quite conceivable that the supreme court: might grant a certiorari, or even that the court of appeals might certify the question to the supreme court. Should the case be carried so far, decision might not be reached for years. Meanwhile the fund’ would have to remain in the hands of the receiver, or in the treasury of the court. Wholly uninformed as to the creditors who proved their claims in the court of primary jurisdiction, and uncertain as to what basis of distribution might ultimately be decided upon by the court: of last resort, it is difficult to see how even a partial dividend could be safely declared. It was undoubtedly an appreciation of these conditions which induced resident creditors, whose claims aggregate many times those of the opposing creditors, to agree to a disposition of the fund which might give them less than they would recover at the end of a prolonged litigation, hut would give litem whatever they were to receive with reasonable promptness. The agreement which it was supposed had been entered into by all would seem well calculated to commend itself to all interests, and therefore time will be given for a fuller discussion of the situation among the creditors, in ¡lie hope that some practical adjustment may be arrived at, which will not embarrass those whose claims are heavy, while those whose interests are small are, busied settling academic questions for the benefit of counsel and the future illumination of courts.
