Scofield v. United States

• Decision Date: 16 November 1909
• Docket Number: 1,927.
• Parties: SCOFIELD et al. v. UNITED STATES ex rel. BOND.
• Court: U.S. Court of Appeals — Sixth Circuit

174 F. 1

SCOFIELD et al. v. UNITED STATES ex rel. BOND.

No. 1,927.

United States Court of Appeals, Sixth Circuit.

November 16, 1909

W. E Scofield, for plaintiffs in error.

G. C Bryce, for defendant in error.

Before LURTON, SEVERENS, and WARRINGTON, Circuit Judges.

SEVERENS Circuit Judge.

The record in this case, brought here on a writ of error, is of a trial in the District Court for the Northern District of Ohio of a cause instituted in that court by a petition of the United States, upon the relation of Bond, trustee in bankruptcy of Caroubas & Goodmanes, to enforce a bond given by Frank J. Kelleher, a former trustee in that matter, and his sureties upon his appointment as such trustee. Service of process was made upon the sureties, but Kelleher could not be found.

The petition stated that, after Kelleher was appointed, there was turned over to him on June 30, 1900, by the clerk, on the order of the court, the sum of $462.13, assets of the estate that he appropriated this money to his own use and left the state, was a long time in hiding, and is now residing in Pennsylvania; that on January 8, 1903, Kelleher was removed by an order of the court on account of his mismanagement of the estate and his failure to account for the assets; that thereupon the relator, Bond, was appointed trustee to collect and distribute the estate; that he duly qualified as such trustee, and has ever since been acting as such trustee; that he has frequently demanded of Kelleher the money in his possession belonging to the estate; that Kelleher has failed to comply with such demand, and has never paid the said $462.13, or any part of it. The sureties appeared, and filed various pleas and answers, raising issues, some of them relating to the power and jurisdiction of the court in making orders in the proceedings, and some of them relating to the insufficiency of the proceedings to establish any liability on the part of the sureties. But no objection was taken to the competency of the District Court to try the case. The questions thus raised will be presently stated. After the pleadings had been settled, the cause came on for a trial of the merits before a jury. The result was a verdict for the plaintiff for the $462.13, with interest from the date of Kelleher's reception of the money. The proof in the case was in accord with the allegations of the petition. It was shown that the trustee had demanded the money taken by Kelleher, and for which this suit was brought, by letter addressed to him in Pennsylvania, which was acknowledged, but the money was not forthcoming. Certain incidental facts appeared which form the basis of some of the defendants' assignment of errors.

1. No notice was given to Kelleher of the proceedings taken for his removal as trustee. It is therefore urged that the order of removal was unlawful and void. But he had absconded, a long time had elapsed, and he could not be found. It was his duty and he had given his bond, to 'in all respects faithfully perform all of his official duties' as said trustee, one of which was to remain under the view and jurisdiction of the court, whose officer he was, and subject to its summons and orders.

He fled, and hid, as the jury might well believe, for the very purpose of avoiding the service of the process of the court, and, if so, he should be deemed to have waived such service. It amounted to a consent that the necessary proceedings might go on in his absence. He left the court in such a position that it must dispense with giving notice, or the bankruptcy proceedings must prove abortive, and he himself escape with the fruits of his embezzlement. His consent, however, was not necessary. His conduct amounted to an abandonment of his office; and in such a case there is no requirement that a hearing be had or notice given. The abandonment ipso facto vacates the office, and a new trustee may be appointed. Hedley v. Board, 4 Blackf. (Ind.) 116; Osborne v. State, 128 Ind. 129, 27 N.E. 345; State v. Moores, 52 Neb. 634, 72 N.W. 1056; Attorney General v. Maybury, 141 Mich. 31, 104 N.W. 324, 113 Am.St.Rep. 512; People v. Common Council, 77 N.Y. 503, 33 Am.Rep. 659; 29 Cyc. 1404. In these circumstances we think the order of removal was not void-- at least, not in a collateral proceeding.

2. It appears that the creditors were not summoned to elect a new trustee, and it is urged that the court could only appoint the trustee in case the creditors failed to elect one. But the appointment of a trustee is finally subject to the approval of the court, and in some conditions the court might itself make the appointment. The whole...