In re Stillwell

• Decision Date: 09 April 1926
• Docket Number: No. 4545,4546.,4545
• Citation: 12 F.2d 205
• Parties: In re STILLWELL et al. In re ASHBAUGH.
• Court: U.S. Court of Appeals — Sixth Circuit

12 F.2d 205 (1926)

In re STILLWELL et al. In re ASHBAUGH.

Nos. 4545, 4546.

Circuit Court of Appeals, Sixth Circuit.

April 9, 1926.

In Case No. 4545:

Franklin Rubrecht, of Columbus, Ohio, for petitioners.

Samuel L. Black, of Columbus, Ohio, for respondents.

In Case No. 4546:

Franklin Rubrecht, of Columbus, Ohio, for petitioner.

Samuel L. Black and D. B. Ulrey, both of Columbus, Ohio, J. W. Barry, of Mt. Gilead, Ohio, and Henry Gumble, of Columbus, Ohio, for respondent.

Before DENISON, MOORMAN, and KNAPPEN, Circuit Judges.

MOORMAN, Circuit Judge.

In September of 1921 the Knox Tire & Rubber Company was adjudged a bankrupt and Paul M. Ashbaugh appointed trustee. The estate was a substantial one. Robert M. Greer, the referee in bankruptcy, was appointed special master, and L. C. Stillwell and F. O. Levering were employed as attorneys for the trustee. After more than two years, during which the estate was in process of administration, Greer was removed from office by the judge, and Ashbaugh resigned, after filing what purported to be a statement of his accounts, which was referred to Frederick N. Sinks, referee, to take proof on exceptions filed thereto by various stockholders and report to the court. Petitions to review certain findings of the referee, not necessary to set out here, were brought to the District Judge, who, among other rulings, entered an order on his own motion reducing the fee allowed Stillwell and Levering (Ashbaugh had paid them, with Greer's approval, $20,000) from $15,000 to $5,000. The case is here on petitions to revise the orders of the court reducing this fee and disallowing other credits claimed by the trustee, approximating $22,000.

The record does not contain findings of fact touching the questions to be reviewed, unless the judgment on the exceptions, wherein the court's views of the facts are expressed, be so considered. We accept them as findings, but we are without authority to decide disputed questions of fact or to do more than review the questions of law, considering in connection therewith whether there is evidence to support them. In re Stewart (6 C. C. A.) 179 F. 222, 102 C. C. A. 348; Powder Co. v. Sternbergh, 218 U. S. 299, 31 S. Ct. 25, 54 L. Ed. 1047. Exceptions were sustained to specific credits claimed by Ashbaugh, excluding the attorney's fee, as follows: Commissions and fees of Robt. M. Greer, referee and special master, amounting to $5,933.25; compensation or fees of the trustee as such $10,329.62; payments to W. W. Stillwell for clerical services to trustee, to the extent of $3,842.25; fee of $2,000 paid to E. G. Lloyd as attorney and receiver for the Mt. Vernon Rubber Company.

The argument of counsel for petitioners is devoted mainly to the reduction of the attorney's fee. We advert briefly to the matters just mentioned, which more directly affect the trustee. For more than two years he did not report to the referee the condition of the estate, and, when he did report, did it so imperfectly as to render impracticable an ascertainment of the true state of his accounts. He misused some of the funds of the bankrupt; others were never placed in the designated depository; his expenditures on behalf of the trust were frequently improvident; many of them were not counter-balanced by voucher or receipt; he finally resigned, and refunded more than $17,000 to the receiver which he had wrongfully appropriated. In view of these abuses of the trust, it was eminently proper to deny him compensation. In re Leverton (D. C.) 155 F. 931; In re Schoenfeld, 183 F. 219, 105 C. C. A. 481.

The referee's conduct was equally reprehensible. He did not at any time require the trustee to report the status of the estate, never prepared a dividend sheet or list of claims, made no orders for the payment of claims, kept no intelligible record of the proceedings in the case, and permitted the extravagant if not wrongful use of the trust funds; in fact, failed in practically every essential particular to require an economical administration of the estate...