144 F. 557 | W.D. Pa. | 1906
On October 23, 1899, proceedings were instituted in this court by the creditors, of Hamilton Bros, to have them declared bankrupts; and the same day, upon affidavit that they were insolvent and were disposing of their property, to the serious detriment of the petitioners, a warrant was directed to issue to the marshal, under which he took possession of their canning factory at Northeast, Erie county, Pa., where they were in business. Accompanying this, a bond was-filed in the sum of $1,000, with two good and sufficient sureties approved by the court, conditioned as required by the statute (Bankruptcy Act July 1, 1898, c. 541, § 3e, 30 Stat. 547 [U. S. Comp. St. 1901, p. 3423]) for the payment' to the respondents, in case the proceedings should be dismissed, of all costs, expenses, and damages, occasioned by the “seizure, taking, and detention” of the property. The respondents contested their bankruptcy, and, the petitioning creditors not being able to show that they were insolvent, or had committed .an act which made them liable, on December 5, 1899, the proceedings were dismissed. Thereupon, pursuing the course marked out by the statute (section 3e), the respondents petitioned the court to fix and allow the amount which should be paid by the obligers on the bond by reason of the warrant to the marshal; and the case, having been referred to a. special master, comes up now on exceptions to his report.
The master finds that the respondents aré entitled in this proceeding to an allowance (a) for such costs, by reason of the filing of the petition and its dismissal, as would be allowed to a party recovering in a suit in equity, citing rule 34 (32 C. C. A. xxxiii; 89 Fed. xiii; 18 Sup. Ct. ix), but not specifying them; (b) to such costs, counsel fees, and expenses as were incurred as a result of the seizure and detention of their property by the marshal, which he was not, however, able to fix for want of evidence; (c) to damages to the extent of $53, caused by the freezing and bursting of the pipes in the canning factory, while the marshal was in possession — this being the only specific sum shown, out of the $20,.000 claimed, independent of what was to be assigned to the bringing of the bankruptcy proceedings. Following the terms of the statute, the bond, on the security of which the warrant of the marshal' was issued, was conditioned, as already stated, for the payment of “all costs, expenses, and damages, caused by the seizure, taking, and detention of the property,” in case the petition was dismissed by which the proceedings in bankruptcy were instituted. This was the undertaking of the obligers, and to this their liability is to be
Counsel fees stand exactly the same as costs, and are to be similarly disposed of. The respondents are entitled to recover whatever was incurred by them on that account, because of the seizure and detention of the property, but not outside of that. They can claim nothing, for instance, for the assistance of counsel in defending and successfully resisting bankruptcy; and as this is all that was shown, and practically makes up the whole of this part of their claim, there is nothing to be allowed under that head. And the same is true, also, as to the matter of expenses. The chief item, however, put forward by the respondents, is for damages. But here, again, the result of the institution of the proceedings in bankruptcy is not to be confounded with the seizure under the warrant to the marshal. The one was no doubt calculated to affect the credit, and so may have worked the financial injury of the firm in a way that may make the petitioning creditors liable to action. But these consequential damages are quite different from those due to the taking possession of their canning factory, by which their business was directly interfered with, if that was in fact the case. Both steps may have combined to work their injury, but each in its own way, and only that which is directly attributable to the one which we are considering is recoverable for here. Upon that point it is to be observed that already, early in October, the same month in which the
It is contended by the petitioners that the respondents had free access to the factory, and ought to have known of the danger better than the marshal, and taken steps to prevent it. But I agree with the master that the draining of the pipes, to keep them from freezing, was sufficiently obvious, and that, in taking the property out of their hands as they did, the petitioning creditors assumed full responsibility for its care, relieving the respondents from looking after it.
The results reached by the master being- thus substantially correct, the exceptions are overruled, and the costs, counsel fees, expenses, and damages for which the obligers in the bond are liable are fixed at $53, as recommended by the master in his report.
Specially assigned.