Gray v. Grand Forks Mercantile Co.

• Decision Date: 09 May 1905
• Docket Number: 2,032.
• Citation: 138 F. 344
• Parties: GRAY v. GRANT FORKS MERCANTILE CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

138 F. 344

GRAY v. GRANT FORKS MERCANTILE CO. et al.

No. 2,032.

United States Court of Appeals, Eighth Circuit.

May 9, 1905

Sydney Anderson (George F. Porter, on the brief), for appellant.

Daniel B. Holt (John D. Benton and Verner R. Lovell, on the brief) for appellees.

The appellant is the trustee, and the appellees are creditors, of the estate of one O. H. Johnson, who was adjudged a bankrupt on his voluntary petition. In his final report and account the trustee claimed credit for three items of $56.80, $9.75 and $2.50, paid to C. J. Murphy, C. E. McNamara, and Alice Blair, respectively, for legal and stenographic services rendered at the instance of the trustee in connection with objections made by him to the bankrupt's application for a discharge. In his final report and account the trustee also reported that, among others, there were 'unpaid bills against said estate' as follows: Alice Blair, reporting testimony in connection with the hearing upon the bankrupt's application for a discharge, $5. John Lynch clerk of court, fees connected with that hearing, $15; W. J Carroll, sheriff, expenses incurred in an attachment of goods of the bankrupt prior to the filing of the petition in bankruptcy, $143.40; George F. Porter, services as attorney for the trustee, $500; A. W. Gray, the trustee, expenses incurred and special services rendered in the administration of the estate, $272.22. The appellees, as general creditors, objected to the claim of the trustee's attorney, Porter, as excessive, and to the trustee's claim for special services as without foundation in fact and without authority in law. Other creditors, not parties to this appeal, objected to the items shown to have been paid to Murphy, McNamara, and Blair, and to the unpaid claims of Blair and Lynch, as not proper charges against the estate, and to the unpaid claim of Carroll as excessive, and not a preferred claim. Upon the hearing had upon these objections the referee made an order approving the payments made to Murphy, McNamara, and Blair, directing the payment of the unpaid claims of Blair, Lynch, and Carroll, allowing $75 for Porter's services and disallowing the balance of his claim, and allowing $122.22 to the trustee for traveling and other expenses incurred by him and disallowing his claim for special services amounting to $150. The trustee, Porter, and some of the creditors excepted to the order of the referee, and upon their petition the referee certified to the District Court the questions presented in respect to each of these claims, together with the evidence and his findings and order. In the District Court a decree was entered sustaining the action of the referee, and to obtain a reversal of that decree the present appeal was taken by the trustee within 10 days thereafter. The assignments of error challenge the allowance of the claims of Murphy, McNamara, Blair, Lynch, and Carroll, and the partial disallowance of the claims of Porter and the trustee. The appellant asks that the decree of reversal include a direction that Murphy, McNamara, and Blair be required to return to the trustee the moneys paid to them upon their claims. Porter did not appeal, but he procured the allowance of the trustee's appeal, and has participated in its prosecution. No citation or other notice of the appeal was issued or given to Murphy, McNamara, Blair, Lynch, or Carroll, and no appearance on behalf of any of them has been entered in this court.

Before SANBORN, VAN DEVANTER, and HOOK, Circuit Judges.

VAN DEVANTER, Circuit Judge, after stating the case as above, .

The principle that a court cannot directly adjudicate the rights of a person who is not before it is fundamental. (Gregory v. Stetson, 133 U.S. 579, 10 Sup.Ct. 422, 33 L.Ed. 792) and is as applicable to courts exercising appellate jurisdiction as to those whose jurisdiction is original (Terry v. Abraham, 93 U.S. 38, 23 L.Ed. 794; Davis v. Mercantile Co., 152 U.S. 590, 14 Sup.Ct. 693, 38 L.Ed. 563; Dodson v. Fletcher, 24 C.C.A. 69, 78 F. 214; American Loan & Trust Co. v. Clark, 27 C.C.A. 522, 83 F. 230; Grand Island & W.C.R. Co. v. Sweeney, 43 C.C.A. 255, 103 F. 342; Marshall, Field & Co. v. Wolf Bro. Dry Goods Co., 57 C.C.A. 326, 120 F. 815). But one may be before a court so as to enable it to adjudicate his rights, and yet not be an actual party to the proceedings; as when he is represented by a receiver or trustee who is an actual party, and whose duty it is to protect his interests. He is then what is termed a quasi party, and is bound by the judgment or decree, unless there be fraud or collusion between his representative and the adverse party. Kerrison, Assignee, v. Stewart, 93 U.S. 155, 23 L.Ed. 843; Atlantic Trust Co. v. Dana, 62 C.C.A. 657, 670, 128 F. 209, 222; Chatfield v. O'Dwyer, 42 C.C.A. 30, 101 F. 797; In re Utt, 45 C.C.A. 32, 105 F. 754; Foreman v. Burleigh, 48 C.C.A.

376 109 F. 313; In re Lewensohn, 57 C.C.A. 600, 121 F. 538. By the decree challenged by this appeal it was adjudged that the claims of Murphy, McNamara, Blair, and Lynch represent legitimate expenses and costs of administration; that the claim of Carroll, while not of this character, is yet a lawful one, and entitled to priority; and that each of these claims is properly payable out of the bankrupt's estate. The question whether the decree shall stand or be reversed is obviously of direct interest to the claimants whose claims are sustained by it, and because of this interest the question cannot be determined without affording these claimants an opportunity to be heard in defense of the decree. That this is so is made plain in Terry v. Abraham, supra, where the court, while doubting the existence of any good reason for the decree challenged by...