Appeals from the District Court of the United States for the Northern District of Illinois, Eastern Division; Evan A. Evans, Judge.
Before SPARKS, FITZHENRY, and ANDERSON, Circuit Judges.
These appeals arise out of the ruling of the District Court in the bankruptcy proceedings of Insull Utility Investments, Incorporated, with respect to compensation to appellant as receiver, and fees for his attorneys. The claims were as follows:
1. (a) $10,000 for his services as receiver in bankruptcy in the District Court for the Northern District of Illinois, Eastern Division, and ancillary receiver in bankruptcy in the District Court for the Southern District of New York.
(b) $7,500 for his services as ancillary receiver in equity in the District Court for the Southern District of New York.
2. $9,000 for fees of Allen and Dalbey as his attorneys as receiver in bankruptcy in the District Court for the Northern District of Illinois, Eastern Division.
3. $5,000 for fees of Cassels, Potter and Bentley as his attorneys as receiver in bankruptcy in the District Court for the Northern District of Illinois, Eastern Division.
The trustee in bankruptcy made no objection to the amounts thus claimed. Appellee Ettelson made no objection to claim 3, but filed her written objections to the other claims on the ground that they were exorbitant and excessive. She objected futher to claim 1 on the ground that Fentress was nominated and appointed as such equity and bankruptcy receiver at the instigation of, and in collusion with the bankrupt. She further objected to claim 2 on the ground that Allen and Dalbey were nominated and appointed as such attorneys at the instigation of, and in collusion with the bankrupt.
The court after hearing evidence upon the petition and objections, filed its memorandum opinion on December 22, 1933. On January 20, 1934, it found the facts specially and rendered its conclusions of law thereon,*fn1 and on the same day rendered three separate judgments to the effect that the petitions of appellant Fentress, Allen and Dalbey, and Cassels, Potter and Bentley, were denied in accordance with the views set forth in its written opinion. The expense accounts of both firms of attorneys were allowed. The memorandum opinion, which appears in 6 F. Supp. 653, 660, differs from the one first filed, as shown by the record, in that it adds the point that there was no ground for the appointment of a receiver in bankruptcy.
The facts pertinent to this controversy, as disclosed by the record, are as follows: On April 16, 1932, upon a creditors' bill in equity, filed in the District Court from which these appeals are prosecuted, appellant and one Cooke were appointed co-receivers of Insull Utility Investments, Incorporated. Cooke served in that capacity until his resignation on September 26, 1932, and appellant served until December 2, 1932, when he delivered the assets in his possession to himself as sole receiver in bankruptcy, having been so appointed on September 22, 1932, the day on which the Utility Investments Corporation was adjudicated a bankrupt on a petition filed on April 16, 1932. Appellant served as receiver in bankruptcy until the appointment of the trustee in March, 1933, and shortly thereafter, on March 30, he turned the assets over to the trustee in bankruptcy.
On May 19, 1932, appellant was appointed as ancillary equity receiver by the United States District Court for the Southern District of New York in order to safeguard valuable securities held as collateral by certain banks in New York City, and for the same reason, on October 5, following the adjudication, appellant was appointed ancillary receiver in bankruptcy in the Souther District of New York, and served as such until he was succeeded by the trustee in bankruptcy. In this jurisdiction and also that of the Southern District of New York, orders of court were procured by appellant and his attorneys temporarily enjoining the sale of pledged collateral of the approximate value of ten million dollars.
Under authority of the court, appellant employed the law firms of Allen and Dalbey, and Cassels, Potter and Bentley, who served as his solicitors in the equity case, and as his attorneys in the bankruptcy case in the jurisdiction of the Northern District of Illinois.
On August 29, 1932, prior to the bankruptcy adjudication, the District Court, on petition of appellant and his co-receiver, allowed on account, from the date of their appointments to September 15, 1932, the sum of $7500 to appellant as equity receiver, and the same amount to each firm of attorneys as fees for their services in the equity proceeding. After the adjudication in bankruptcy, on December 8, 1932, the District Court sitting a a court of bankruptcy, on petition of appellant and his co-receiver filed in the bankruptcy court, allowed to appellant on account ...