In re Shon

MORTON, District Judge. An involuntary petition in bankruptcy which was brought against the respondent having been-dismissed, the [798] respondent now moves that costs in his favor against the petitioners be so taxed as to include an allowance for counsel fees. He says that the referee’s report clearly shows that, as to the intervening petitioner Rabbe, the proceedings were not brought in good faith, and that alteration of a promissory note and perjury were resorted to in an effort to sustain them; and he contends that under such circumstances a further sum ought to be allowed in the way of costs beyond those which regularly follow the dismissal of a petition. There was no seizure of property, and it is at least doubtful whether the court has power to allow the motion. In re Ghiglione (D. C.) 93 Fed. 186; In re Morris (D. C.) 115 Fed. 591; In re Williams (D. C.) 120 Fed. 34; In re Hines (D. C.) 144 Fed. 147; Collier on Bankruptcy (9th Ed.) pp. 116, 1084. But see Andrews v. Barnes, 39 Ch. D. 133, as to the general power of courts of' equity over costs. I have not found it necessary to decide that question, because it seems to me that I ought, in the exercise of my discretion, to deny this motion. Such costs were Refused in the cases above cited; no American decision granting them has been called to my attention. To allow this motion would open the door to inquiry as to the good faith of the losing party in prosecuting or defending almost any equity suit or bankruptcy petition, and would establish a far-reaching precedent. The case is no doubt a hard one for the respondent, who has been put to much trouble and expense; but his situation is no worse than it would be if an unwarranted and fraudulent action at law had been instituted against him, in which event only a small part of his loss could be recovered as costs. It seems to me unwise to establish a different rule in bankruptcy or equity, or to attempt to determine on this motion questions which can be more properly raised by an action for malicious prosecution of the bankruptcy petition. Wade v. Nat. Bank of Commerce (C. C.) 114 Fed. 377; Pierce v. Thompson, 6 Pick. (Mass.) 193. The motion is denied, and the respondent takes the usual costs on a dismissed petition.