Humphrey v. Hart, 11083.

• Decision Date: 04 November 1946
• Docket Number: No. 11083.,11083.
• Citation: 157 F.2d 844
• Parties: HUMPHREY v. HART.
• Court: U.S. Court of Appeals — Ninth Circuit

157 F.2d 844 (1946)

HUMPHREY v. HART.

No. 11083.

Circuit Court of Appeals, Ninth Circuit.

November 4, 1946.

Sterling Carr and William B. Mead, both of San Francisco, Cal., H. H. Atkinson and H. R. Cooke, both of Reno, Nev. (Williamson & Wallace, of San Francisco, Cal., of counsel), for appellant.

James T. Boyd, of Reno, Nev., and Chester C. Kempley, of Los Angeles, Cal., for appellee.

Roger S. Foster, Sol., and Theodore L. Thau, Sp. Asst. to Sol., Clark Byse, Atty., SEC, both of Philadelphia, Pa., and W. Stevens Tucker, Atty., SEC, of San Francisco, Cal., for Securities and Exchange Commission.

Before GARRECHT, MATHEWS, and BONE, Circuit Judges.

MATHEWS, Circuit Judge.

On June 29, 1939, International Mining & Milling Company, a corporation, and Mount Gaines Mining Company, a corporation, filed petitions under chapter 10, (§§ 101-276) of the Bankruptcy Act, 11 U.S.C. A. §§ 501-676. Thereupon, on June 29, 1939, orders were entered approving the petitions, fixing a time of hearing, and directing that notice be given to creditors. Notice was given as directed, a hearing was had, and on August 11, 1939, orders were entered appointing appellee, James P. Hart, trustee of both corporations, hereafter called the debtors.

On November 16, 1939, C. F. Humphrey, an attorney at law, filed and presented to appellee proof of a claim for $10,000 for services rendered by Humphrey to the debtors.¹ On March 22, 1940, appellee filed objections² to the allowance of the claim. On May 27, 1940, an order was entered referring the claim to a special master, Arthur F. Lasher, who was also a referee in bankruptcy, with directions to conduct hearings, take evidence and file a report "containing his findings and recommendations." Between May 27, 1940, and May 26, 1944, the master conducted many hearings and took much evidence.

On May 26, 1944, the master filed a report recommending that the claim be disallowed. On June 5, 1944, Humphrey filed objections to that report. On June 12, 1944, an order was entered re-referring the claim to the master with directions (1) to permit Humphrey and appellee to submit further evidence if they so desired and (2) to file a "supplementary" report. No further evidence was submitted.

On September 12, 1944, the master filed a "supplemental" report setting forth his findings of fact and conclusions of law and recommending (1) that the claim be wholly disallowed, and (2) that the claim, if not wholly disallowed, be allowed in the sum of $1,675. On September 22, 1944, Humphrey filed objections to that report. On December 11, 1944, judgment³ was entered as follows:

"The supplemental report of referee and special master on claim of C. F. Humphrey, filed September 12, 1944, and objections filed thereto, having been heard and submitted, and the court being fully advised in respect thereto and having duly considered the same, it is the conclusion of the court that recommendation 1 of the referee and special master * * * should be approved.

"Wherefore, it is ordered that the claim of C. F. Humphrey against either or both debtor corporations be, and the same hereby is, wholly disallowed."

From that judgment Humphrey took this appeal.⁴

The record on appeal showed that the court below had not found the facts, as of course it should have done, either by adopting the master's findings or by making findings of its own.⁵ We therefore remanded the case to that court with directions to make findings. Findings were made and have been filed here. They are as follows:

"I. That C. F. Humphrey was not employed as general counsel for the International Mining & Milling Company, debtor in reorganization, or the Mount Gaines Mining Company, debtor in reorganization, jointly or severally, and was not general counsel for both or either of said corporations, jointly or severally, from June, 1937, to June 30, 1939, or at any other time, and was not employed as counsel with Wm. P. Hubbard or James H. Hogin, nor was he of counsel for either of said corporations in the matters and cases enumerated in his claim.

"II. That the said claimant, C. F. Humphrey, did not render services to either the International Mining & Milling Company or the Mount Gaines Mining Company, jointly or severally, of the value of $10,000 or of any other value.

"III. That the said International Mining & Milling Company or the Mount Gaines Mining Company is not indebted to the said claimant, C. F. Humphrey, either jointly or severally, or jointly and severally, in the sum of $10,000 or in any other sum or amount."

These findings are clearly erroneous. Appellee did not object to the claim on the ground that Humphrey was not employed as general counsel for the debtors, or on the ground that he was not their general counsel, or on the ground that he was not employed as counsel with Hubbard and Hogin, or on...