In re Eagle Paint & Varnish Co.

SCHOONMAKER, District Judge.

The trustee, Robert C. Sproul, petitioned the referee for leave to retain Lewis M. Alpern, Esq., and Sidney J. Watts, Esq., as attorneys in the matter of this estate.

Lewis M. Alpem had already been acting as attorney for the former trustee of the estate, Elliott Frederick, who had been removed; and Alpem’s appointment was refused, because the referee was of the opinion that Alpern was disqualified immediately, by the fact that he represented the former trustee.

We cannot see that this fact of itself would disqualify Alpem. Whether he was disqualified in fact would depend upon his connection, if any, with the causes which led to the removal of the former trustee. As counsel for the former trustee, appointed with leave of court, he had a duty to perform as to this estate, both to the court and to the estate; and his relation with the former trustee was not so personal as to disqualify him by that fact alone.

Each ease, as we view it, must be decided upon its own facts. We can conceive of a situation where the facts of the ease would be such that the attorney for the former trustee ought not to be retained as counsel for the new one. If there are such facts in the instant ease, they should be found by the referee as disqualifying facts. Without such finding, we cannot approve the order of the referee as to Lewis M. Alpem. The case will be referred back to the referee as to Alpem, to ascertain whether or not there are any facts in this case which would disqualify Alpern from serving as attorney for the present trustee.

As to Sidney J. Watts, it appeared that he at one time acted as personal counsel for Elliott Frederick in matters involving the conduct of Elliott Frederick as receiver and trustee in bankrupt estates in this court. We think that would disqualify him and that the referee was right in refusing to appoint him as counsel.

Order of Court.

Now, November 1,1933, this case came on to be heard on certificate to review an order of the referee made the 26th of March, 1932, denying the petition of Robert C. Sproul for leave to employ Lewis M. Alpem and Sidney J. Watts as his attorneys.

And on due consideration thereof, the order of the referee is confirmed so far as concerns Sidney J. Watts, Esq., but is referred back to the referee so far as concerns Lewis M. Alpem, Esq., to ascertain and find whether or not, as a matter of fact, his relations with the former trustee, Elliott Frederick, were.such as to disqualify him from acting as counsel for the new trustee, Robert C. Sproul.