In re Utt

• Decision Date: 02 January 1901
• Docket Number: 692.
• Citation: 105 F. 754
• Parties: In re UTT et al. v. MATHENY. RIDGELY NAT. BANK
• Court: U.S. Court of Appeals — Seventh Circuit

105 F. 754

In re UTT et al.

RIDGELY NAT. BANK v. MATHENY.

No. 692.

United States Court of Appeals, Seventh Circuit.

January 2, 1901

C. L Conkling, for petitioner.

Samuel P. Wheeler, for respondent.

This is a petition under subdivision 'b' of section 24 of the bankrupt act of 1898 for a revision of proceedings in bankruptcy of the district court of the United States for the Southern district of Illinois. The material facts are these Pamelia S. Clark, holding a first mortgage, and the Ridgely National Bank of Springfield, Ill., holding a second mortgage, executed by Edgar W. Utt, John P. Utt, and Frank Utt, partners under the name of Utt Bros., upon real estate on March 21, 1899, obtained in the circuit court of Sangamon county, Ill., a decree of foreclosure, whereby there was determined to be due on the first mortgage $5,539.21, with $173 costs and solicitor's fee, and on the second mortgage $4,320.37, with $143 costs and solicitor's fee; and in pursuance of that decree the master in chancery of the court had duly advertised a sale of the property to occur on March 27, 1899. On March 17th the Black Diamond Coal Company and other creditors filed in the district court of the United States for the Southern district of Illinois a petition that the Utt Brothers be adjudged bankrupts, and on April 3d ensuing an adjudication to that effect was entered. Excepting the mortgaged property and the proceeds of the sale thereof, no assets of any character came into the trustee's possession. On March 22d, before the advertised day of sale and before the adjudication in bankruptcy, the Black Diamond Coal Company brought a bill in the United States circuit court for the Southern district of Illinois praying an injunction forbidding a sale of the mortgaged property by the master in chancery under the decree of the state court. On March 25th a restraining order was issued, and the defendants were ruled to show cause on April 5th why an injunction should not issue, and in June following the writ was ordered as prayed, and no appeal from the order was taken; but on November 4, 1899, the holders of the two mortgages joined in a petition to the district court that the trustee in bankruptcy be directed to advertise and sell the mortgaged property, and to pay to them out of the proceeds of the sale the amounts found due by the Sangamon circuit court. On November 27th the court made an order to that effect, including in the costs of this proceedings, directed to be first paid, the sum of $200 allowed to the solicitors of the petitioners. This allowance the solicitors for the Ridgely National Bank disclaimed in open court before the sale was made, and reserved to themselves and the bank the right to except to any allowance for any fees or charges in the bankruptcy proceedings. A sale made on December 26th was set aside because the bid was less than three-fourths of the appraised value of the property, and on January 18, 1900, a resale was made to the Ridgely National Bank for the sum of $7,600, there being due on the first lien more than $6,000, and upon the lien of the bank near $5,000. The sale was reported to and approved by the court on February 3, 1900, and on the same day the trustee presented to the court a petition asking that the sum bid for the property 'when recieved' be distributed as follows: 'First. That said sum first be applied to the payment of principal and interest due on the mortgage held by Pamelia S. Clark and all the costs of this bankruptcy proceeding, which said costs shall include the clerk's, referee's, marshal's, trustee's, and appraisers' costs and commission as provided by law, and all other costs incident to and growing out of such bankruptcy proceedings, and the sale of said real estate, including advertisements and other expenses incurred by the trustee in carrying out the decretal order of sale entered herein, and that said costs shall also include the sum of five hundred dollars for W. St. John Wines, the solicitor for the petitioning creditors, and also the sum of one hundred dollars for Robert Matheny, the solicitor for the trustee, which said sums of five hundred dollars and one hundred dollars, respectively, the court may find to be a reasonable compensation for their services; said payments to be made according to the schedule following, to wit. * * * Second. That after the payment of the said amount due the said Pamelia S. Clark and the costs and expenses as set out in the foregoing schedule the undersigned may be directed to apply the balance in his hands to the discharge of the principal and interest due on the mortgage held by the Ridgely National Bank set out in the decretal order heretofore entered herein, which said principal and interest at this date amounts to the sum of four thousand five hundred and seven and 57/100 dollars, and if, after the application of said balance, there should still remain in the hands of the said trustee any portion of the money realized from such sale, that the undersigned may be directed to bring the same into court for further order and direction. ' Of the items embraced in the schedule referred to, the Ridgely National Bank objected that the following were not properly chargeable against the fund in preference to the lien of the bank:

Lee Matheny, trustee's commissions . . . . . . . . . $202.00

Robert Matheny, attorney for trustee . . . . . . . . 100.00

M. B. Converse, clerk, for use of W. St. John Wines fees advanced . . . . . . . . . . . . . . . . . . . 25.00

C. P. Hitch, U.S. marshal, marshal's fees advanced for use of St. John Wines . . . . . . . . . . . . 2.00

Appraisers' fees and expenses . . . . . . . . . . . . 32.00

W. E. Shutt, referee's expenses . . . . . . . . . . . 18.25

Attorney's fees W. St. John Wines . . . . . . . . . . 500.00

W. E. Shutt, referee's commission on sale . . . . . . 76.00

S. D. Scholes, attorney's fees in Clark mortgage in district court . . . . . . . . . . . . . . . 100.00

W. St. John Wines, expenses advanced in injunction suit . . . . . . . . . . . . . . . . . . . . . 11.55

C. P. Hitch, marshal, for use of St. John Wines . . . . 6.00

J. T. Jones, clerk's costs in injunction proceedings . 7.30

J. T. Jones, clerk, use W. St. John Wines . . . . . . . 5.00

The court, on April 27, 1900, overruled the objection, and ordered 'that the said trustee proceed to distribute said proceeds in the manner indicated in his said petition. ' These facts in greater detail, with full copies of the documents, orders, and decrees referred to, are set forth in the petition presented by the Ridgely National Bank to this court on May 15, 1900. The record shows a notice dated May 14, 1900, and addressed 'To Lee Matheny, trustee, Robert Matheny, attorney, W. St. Jones Wines, William E. Shutt, S.D Scholes,' etc., to the effect that on May 15th, or as soon thereafter as the court would hear the same, application would be made to this court for leave to file a petition for the review of the order dated April 27th. Service of that notice on the day of its date was acknowledged by each of the persons to whom it was addressed. Upon presentation of the petition the order of this court was that it be filed and that 'Lee Matheny, trustee, answer thereto within twenty days from service of a copy of this order. ' He filed an answer on June 5th, 1900, reiterating in...