In re Stowe

• Decision Date: 05 September 1916
• Docket Number: 10215.
• Citation: 235 F. 463
• Parties: In re STOWE.
• Court: U.S. District Court — Northern District of California

235 F. 463

In re STOWE.

No. 10215.

United States District Court, N.D. California.

September 5, 1916

R. C Pardoe, of Stockton, Cal., for petitioner.

Clarence A. Grant, of Stockton, Cal., for bankrupt.

DOOLING District Judge.

In the early part of June, 1916, Herbert A. Stowe, the bankrupt herein, made to Fillmore C. Marks an assignment for the benefit of his creditors. This was to be effective if all of the creditors assented thereto. Some of them did not do so and the bankrupt then filed his petition and schedules and was duly adjudicated a bankrupt. Lafayette J. Smallpage was the attorney for the assignee, and when the bankruptcy proceedings were inaugurated he sent out to the creditors a circular letter in which he says 'We desire to represent you at the election of the trustee, and will do so without charge, provided you execute the enclosed proof of debt.'

At this time the assignee had collected a considerable sum of money for which he would necessarily have to account to the trustee who might later be selected. In response to this letter a number of creditors sent their claims with power of attorney to Smallpage. These claims were afterwards turned over to R. C. Pardoe, who attempted to vote them at the election for trustee. The referee refused to permit them to be voted, on the ground that the attorney for the assignee was endeavoring in this manner to control the election of trustee. In this connection the bankrupt testified as follows:

'Isn't it a fact, Mr. Stowe, from your knowledge, and with your approval, and you participated in it, Mr. Smallpage, representing the assignee nominally, and Mr. Stewart, representing you, were working together, were endeavoring to get all the claims in to elect the trustee in this matter? A. We were trying to get an assignment of all the claims; Yes, sir.'

The action of the referee in this regard is approved.

The referee also rejected the claims of E. B. Stowe, father of the bankrupt, for the reason that the nominee of said E. B. Stowe was the same as the nominee whom Smallpage and the bankrupt were endeavoring to elect, and that the said E. B. Stowe had joined with Smallpage in endeavoring to control the bankrupt's estate. His action in this regard is also approved.

There is no disposition on the part of the court to prevent the creditors of a bankrupt from selecting a trustee. But when some of the creditors knowingly join with the attorney of...