In re Samuel H. Babcock.

The only question here is as to the services performed by counsel after he became a bankrupt. As to those, it is found by the commissioner, that the assignee was advised to enter his appearance and acquiesce in the suit going on, and did right in continuing to make further defence. It is also found, that he was informed of the agreement in relation to the payment of costs.

It does not, to be sure, appear by the commissioner's report, that the assignee expressly stipulated to continue to pay the same proportion as Babcock had; and the claim for it is therefore disallowed by him. But it appears that he did not object to or dissent from that arrangement; and it is clear, that he assented to the further defence of the action for the benefit of the estate, with full knowledge of the agree

ment.

It strikes me that, under such circumstances, it is just and reasonable to infer his acquiescence in the continuance of the payment of one half of the future expenses by Babcock's estate. It seems equitable, also, to charge that estate with one half, as the estate was reaping any advantage likely to arise from a continuance of the defence on the former agreed terms, and without which terms the defence would not be continued.

The opportunity thus enjoyed for an expected gain or benefit should not be taken without incurring the charge attached to it.

He took it, then, cum onere; nor do I see any thing in the case to show the further defence by the assignee to have been improper, or likely to prove prejudicial to the estate. Nothing of that kind has been pointed out, and it is not to be presumed where the defence, as in this case, was advised by respectable counsel, and is justified by the commissioner.

In England, an assignee cannot commence and prosecute suits in equity so as to charge the estate with costs, unless he previously consults the creditors, and obtains the support

In re Moses Guild.

of a majority of them. 1 Cooke on Bankrupt Law, 292; 1 Atk. 91, 106.

But here it was the defence of an old suit in equity, rather than the institution of a new one; and as the commissioner reports in favor of the propriety of the defence, I am not disposed to inquire further into that branch of the question.

No objection being taken to the amount of any of the items in the account, the claim as made by the assignee is allowed.

IN THE MATTER of Moses Guild, a Bankrupt.

If creditors object to the discharge of a bankrupt, and obtain a verdict against it in the District Court, and on appeal here a verdict is rendered for the bankrupt, on new evidence, filed in a new examination and disclosure allowed to him on leave, costs are not allowed to either party.

In such cases, usually, it is equitable to give costs on each verdict to the prevailing party in each; but not to the party last recovering, unless it was on the same evidence, and unless he was able to pay costs, if losing the verdict.

THE bankrupt in this case moves for costs to be allowed him against Earle, a creditor, who had opposed his discharge.

It appeared, that in the District Court, on a trial of the facts in issue, relating to his discharge, a verdict was returned against Guild; but or appeal here and another trial had, he was discharged.

The motion was for costs in both trials. C. M. Ellis for the bankrupt, and Bradley, of Rhode Island, for the creditor.

WOODBURY, J. By the 25th rule of the District Court for Massachusetts, in cases of costs in bankruptcy, it is provided that they are to be paid "according as the Court shall finally award and direct in each particular case-taking into consideration all the circumstances and equities thereof."

In re Moses Guild.

The power to be exercised in this case is, therefore, very broad; but should be regulated, in some respects, by what is deemed equitable elsewhere under like circumstances and systems.

In England, costs are very seldom to be paid by a bankrupt. Eden on Bankr. 461. Probably the practice rests there on his supposed inability, after a surrender of his effects, to discharge any considerable amount of costs.

Here, by our rules, also, he is not named expressly as one of the persons liable in certain events to pay costs.

It seems to me, therefore, that he should not, as a matter of course, be subjected to pay costs where an issue is found against him, but only in extreme cases of negligence or fraud, or other injurious misbehavior, and then with much caution, if he is really a bankrupt. But as to creditors, the rule is less stringent, as they are able to pay costs, and are named twice in the rules as subject to costs. And in England, a creditor failing to establish an objection to the discharge of a bankrupt, is generally taxed with costs. Montagu on Bankr. 358.

What, then, are the peculiarities in this case, which render it equitable to give or withhold costs, either as to the bankrupt or creditors?

It appears, that the issue below, after a full hearing, was found against the bankrupt, and for the creditor. Now, on that finding alone, costs would often go against the bankrupt. But the verdict was reversed in this Court. If the first finding had been reversed on the last trial on like evidence and explanations, the last finding would be proof, of some strength, that the first verdict was erroneous, and consequently that the bankrupt, so far from being liable in the first case, should be entitled to costs in both cases against the creditor objecting to his discharge.

Such is the claim set up by the present motion. But, at the same time, the case shows, that there was strong proba

In re Moses Guild.

ble cause at the first trial for the creditor to object to the bankrupt's discharge. The explanations by him had then been very general and imperfect as to a large amount of property; and in the interval, before the second trial, he obtained leave to make new explanations, and to furnish new evidence in favor of his discharge that was very material.

It appears, further, that the case was contested as doubtful at the last trial, even after the new explanations and evidence.

Hence, I think, there is no equity in allowing him costs on the first trial, and I exonerate him from liability to pay costs in that case, only on the grounds of his general exemption from liability except in extreme cases, coupled with the circumstance, that the last finding in his favor rebuts, on the whole, any designed or corrupt concealment of property, or any fraud in making such imperfect disclosures and proof as were offered by him in the Court below on the first trial.

In respect to the trial in this Court, where a verdict was returned in favor of the bankrupt, costs would be allowed of course in his favor, and against the creditor, if there had been no kind of misconduct on his part, which naturally induced the creditor to object to his discharge. 1 Rose, 376, in case of the Bank of Scotland, cited in 1 Montagu on Bankruptcy, 358.

But here there had been an omission to disclose very material explanations and facts. He had, also, been indulged in a new examination, and on terms as to costs, to be afterwards settled. It had become necessary for him to ask indulgence to make new explanations, by having a new and fuller examination. Beside this, important circumstances were introduced at the second trial, which had before been overlooked or suppressed.

The whole of this amounted to such misconduct on his part, as in England would probably have prevented the allowance of costs, even on the dismission of a petition praying

In re Moses Guild.

a stay of a certificate of bankruptcy. Note in Rose, before cited.

The whole case, likewise, as tried in this Court, having, as before suggested, been one to the last moment very questionable on the merits; and the course of the bankrupt, in not going into more explanatory details, having been procrastinating and reluctant, and in the management of his estate, of doubtful fairness, I think, that the cost since incurred has, in an equitable view, resulted quite as much or more from his own misbehavior, than from any thing culpable in the course pursued by his creditors. Consequently, if no costs in either trial are allowed, either to the bankrupt or the creditors, they will be left in a condition not apparently contrary to equity. Such was the conclusion in Alfonso v. The United States, 2 Story, R. 421.

We are the more confirmed in the justice of this conclusion, as it accords not only with what seems equitable, but with the legal course in some States, in analogous cases. Thus, in New Hampshire, on a review, though the verdict be different from what it was on the first trial, the costs in that trial are not disturbed, either by allowing them to the party now recovering, or by paying back to him what has been collected from him.

Where a cause is open to be tried on new testimony, letting the costs follow the verdict, as it may be in each trial, is not inequitable, and would lead to much the same result in the present case, as that we propose.

The only difference would be where the amounts by the different trials were not alike. But even then, if here, those on the last trial were granted, the bankrupt might not equitably be entitled to claim the balance, as his new examination, by which he has been enabled to prevail on the last trial, was granted on terms, which ought probably to cover all the excess.

Again, if the balance should, in this or any other case,