Page:The Green Bag (1889–1914), Volume 18.pdf/52

 EDITORIAL DEPARTMENT are given the absolute right to appoint one or three trustees. This conflict in the statutes has led to a curious result. For not only do the General Orders provide that no official trustees shall be appointed, but they have engrafted a limitation on the free right of selection of the trustee on the part of creditors so that the appointment is subject to the approval of the referee or judge. There is clearly no warrant for this usurpation on the part of the court. The seven years of practice under the pres ent statute has furnished an unbroken prece dent of the selection of trustee by the creditors. One of the most important questions relating to the election of trustee has arisen in the class of cases where the bankrupt seeks to in fluence or control the selection of the person who is to be trustee. It is an easy matter for the bankrupt to elect his nominee to the office of trustee. Such an action is gross fraud upon the creditors, and every court to whose atten tion it is brought should make every effort to defeat such a scheme. In the English case of ex parte Shaw it is held that it is against the first principles and the whole policy of the bankrupt laws to permit the bankrupts indi rectly to choose their own assignees, and it became a fixed principle of the English Bank ruptcy practice that such interference by the bankrupt avoided the election, until finally the subject seems to be satisfactorily covered by express provision of their bankruptcy statute. The courts in this country have not agreed upon either the theory or method of dealing with the problem. Where there is evidence sufficient to establish that the bankrupt or his representatives have interfered with the selection of the trustee, two possible courses seem to be open to the minority creditors. They may challenge the vote, or may demand that the referee disapprove the election. The real point is not whether the trustee chosen is qualified so as to be approved or disapproved by the referee, but whether the votes which were wrongfully influenced by the bankrupt shall be accepted. If the referee upon inquiry learns that the bankrupt is casting votes in his creditors' names, it is obvious that he may reject them. "When a referee finds that the bankrupt directly or indirectly controlled the votes, he finds that the creditors did not cast

33

the votes. And in such cases it is his duty to refuse those votes without passing on the qualifications of the appointee. There is an advantage in rejecting the votes rather than in disapproving of the trustee, for by rejecting the fraudulent or corrupted votes the ballots of the independent creditors will control the election, whereas if the appointee is merely not approved the same votes may control another election. CONSTITUTIONAL LAW (Contract — Due Process — State Decisis). T. F. C. Demarest in the November Albany Law Journal (V. Ixvii, p. 315) attempts to disentangle the labyrinth of the New York law relating to damages to abutters by the erection of elevated railways as finally affirmed in a recent decision of the Supreme Court of the United States. He concludes his suggestive study of the methods by which these courts have enacted judicial legislation with the following analysis of this new Federal case. It can be explained on two different but not inconsistent theories, each of which is dependent on holding to a phase of the early New York decisions as a step toward the conclusion that the United States Constitution has been infringed. "Unless the peculiar tenet that a railroad viaduct over and along a street negatived the latter's being kept open as a public street, had been adhered to, a contract-obligation would not have been found to be impaired. "Unless the peculiar tenets of the creating of private property in a street, and of the taking of that property by such a viaduct, had been adhered to, a deprivation of property without due process of law would not have been found. "Hence, the essential and ultimate founda.tion of the recent interesting and important decision of the United States Supreme Court appears to be — a vested right, in one acquir ing property, to an immutability of State judicial decision, where the value of his ac quired property would be depreciated by an overruling of such decision — a view appar ently in accord with judicial expressions con tained in the dissenting opinion." CONSTITUTIONAL LAW (Ohio — Elections). "Article XVII Amendment to Constitution," by Hon. Horace S. Buckland, Ohio Law Bul letin (V. 1, p. 442 ).