In re Molina

HamiltoN, Judge,

delivered tbe following opinion:

On a rule to show cause wbj he should not proceed with the proceedings in the foregoing bankruptcy case, it appears that the referee, Salvador Suau, had notified the attorney for the bankrupt that, unless a deposit was made with the referee of $25 before incurring any expenses, as required by General Order No. 10, he would not proceed any further in said case, noting also that the money would be refunded out of the estate as part of the costs of the administration.

This is a case of voluntary bankruptcy, without the poverty affidavit. The preliminary deposit of $25 for fees of officers was duly made (bankruptcy act, § 51), and the question now certified up by the referee on motion of the bankrupt relates to a demand by the referee that another $25 be deposited for expenses under General Order No. 10, to be repaid, however, out of the estate.

Tbe referee in tbis return states tbat $25 is wbat bas been found to be necessary to cover expenses connected with publishing and mailing notices and tbe like. Tbis is contested by tbe bankrupt as incorrect, at least for tbis particular case, and be says tbat be bas met tbe expense of publishing and mailing as far as be bas been notified, and will meet tbe other necessary expenses in future. Tbe question, therefore, resolves itself into whether tbe referee is bound to collect for each expense as it occurs, or can exact a round sum in advance, and save himself tbe trouble of several notices to tbe bankrupt, with tbe incidental delays of collecting payment.

The wording of General Order No. 10 is tbat, “before incurring any expense in publishing or mailing notices, or in traveling, or in procuring tbe attendance of witnesses, or in perpetuating testimony, the clerk, marshal, or referee may require, from tbe bankrupt or other person in whose behalf tbe duty is to be performed, indemnity for such expense.” Tbis rule would be satisfied by tbe bankrupt’s giving security satisfactory to the referee, or by depositing wbat is shown to be necessary for tbe purpose. Tbe referee should not be put to tbe expense and ■delay of going to the bankrupt for each expense incurred.

It is therefore ordered that tbe action of the referee in requiring a deposit of $25 is disapproved, and that be is hereby directed to require from tbe bankrupt or other person- in whose behalf duties are to be performed indemnity for tbe expense thereof or a deposit not exceeding $10. When such indemnity or deposit is exhausted, he may then require not exceeding $10 more, and so on until tbe case is brought to an end. Tbis is to be used exclusively for expenses set out in General Order No. 10, and is not to be used for fees of officials, they being limited to .the preliminary deposit of $25 made with tbe clerk. Collier, Bankr. 7th ed. 864.