(2) That under the bankruptcy law, no receiver can be appointed at the request of the petitioning creditors, unless they have filed a bond approved by the court, conditioned for the payment of all costs, expenses, and damages occasioned by seizure of the property of the bankrupt.
At the request of the alleged bankrupt, this day was fixed for hearing of the exceptions. The petitioning creditors did not appear, and their counsel, Hymen Schlesinger and Isadore Schlesinger, wrote a letter to counsel for the alleged bankrupt, Frank Stonecipher, stating that they had no objections to offer on the argument of exceptions. This letter was presented to the court, and is filed as a part of the record in this case.
After hearing counsel, and on due consideration of the exceptions, we find that the second exception should be sustained, because no bond of the petitioning creditors has been filed, conditioned as required by the Bankruptcy Act, § 3 (11 USCA § 21), for the payment, in case the petition is dismissed, to the respondent, his or her personal representatives, all costs, damages, and expenses occasioned by such seizure, taking, and detention of the property of the alleged bankrupt. The filing of such a bond is a necessary prerequisite to the appointing of such a receiver. The referee made the order conditioned upon the petitioning creditors giving such bond, but, in our judgment, the conditional order should not have been made, because, as we view the law, the filing of a bond is a condition precedent to the power of the court to appoint a receiver on the petition of the petitioning creditors in bankruptcy. The second exception therefore will be sustained.
Order of Court.
Now, January 12, 1934, this case came on to be heard on exceptions to the order of the referee in bankruptcy, as special master, appointing a receiver for the Ziegler Printing Company, Inc.
After hearing counsel for exceptants, and the filing of a letter from counsel for the petitioning creditors that they did not care to be heard with reference to these exceptions, the court proceeded to hear the matter.
And on due consideration thereof, it is hereby ordered that exception No. 2 be sustained, and that the order of the referee, as special master appointing a receiver in this case, be vacated and set aside.
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