Full opinion text
STONE, Circuit Judge. This appeal and three other appeals (No. 12,002, 130 F.2d 687, No. 12,003, 130 F.2d 691, and No. 12,004, 130 F.2d 695) are concerned with the bankruptcy of the Calhoun Beach Club Holding Company, a Delaware corporation. Each of these appeals has to do with a separate order in that proceeding. This appeal is from an order (January 2, 1941) denying a petition by four creditors for the removal of the trustee in bankruptcy (Harold W. Cox) and his attorneys (Oscar A. Brecke and Benedict Deinard) and for return to the bankrupt estate of all fees “heretofore allowed and paid them, or which might be paid them herein.” Appeal No. 12,002 is by the same four creditors and Harry S. Goldie from an order (January 2, 1941) allowing attorney fees ($2,000.00) to the above counsel for the trustee for services from September 23, 1938 to March 21, 1939. Appeal No. 12,003 is by Harry S. Goldie from an order (January 2, 1941) denying an amended claim of Harry S. Goldie for services and disbursements ($5,-618.55) as preferred administrative expenses. Appeal No. 12,004 is from an order denying two amended general claims (Nos. 184 and 185) of Harry S. Goldie ($26,406.-26 and $26,761.59, respectively) except for an item of $8,000.00 on bonds (in claim No. 184) which is not involved in the appeal. Historical Statement. While each of these appeals must be determined separately upon the facts particularly applicable thereto, yet it is useful, to avoid some repetition, to make here a brief outline statement of certain matters of historical background. In 1926, the Calhoun Beach Holding Company (a Minnesota corporation and hereafter called “Holding Company”) owned certain vacant lots advantageously located in the lake district of Minneapolis. Harry S. Goldie and two associates owned a majority of the capital stock and Mr. Goldie was the dominating influence. It was planned to develop this property by building thereon a combined club and apartment building. To carry out this plan, the bankrupt (Calhoun Beach Club Holding Company, a Delaware corporation) and the Calhoun Beach Club (a non-profit Minnesota corporation and hereafter called “Club”) were incorporated in the autumn of that year. Mr. Goldie owned a majority of the capital stock of the bankrupt and was the. dominating personality therein. The plan contemplated acquisition of the above land by the bankrupt which was to construct, equip and maintain the building for the exclusive use of the members of the Club. The method for financing was through Club membership fees and later through money from a bond issue and from sale of stock in bankrupt. To procure membership in the Club and the resulting fees, the Club made a contract (December 11, 1926) appointing the Bankrupt to conduct a membership campaign, bankrupt to bear expenses thereof and to receive 15% of such membership fees as its pay. This contract provided for placing the 85% of such Club fees in trust and that, when such trust fund should equal $255,000.00 and the bankrupt should turn over to Club an acceptable agreement to furnish the necessary balance to construct and open the Club, the trust fund and later membership fees should be turned over to bankrupt and it would construct, maintain and operate the Club building. Provision was made, also, for earlier termination of the trust and handing over of the fund to bankrupt. About two months later, these contracts were altered to allow 20% instead of 15% of membership fees as compensation. In turn, bankrupt made contracts employing Mr. Goldie to carry out the above contract (and later the altered contract) on the same terms in so far as securing membership in the Club. The membership campaign proceeded producing cash and notes. In May, 1927, the trust was terminated and the trust fund directed turned over to bankrupt. Construction by bankrupt began about August 1, 1927, with the Fleisher Engineering and Construction Company as general contractor. In the spring of 1928, negotiations began between bankrupt and H. O. Stone & Company to secure a bond mortgage loan to complete the construction. As a result thereof, the latter agreed to a loan issue of $1,075,000.00 (divided in two issues of bonds) ; the mortgage deed of trust was registered October 15, 1928. There seems to have been suspensions of work during the summer and autumn of 1928; and, after September 25, 1928, the work proceeded, under another general contractor (Joseph A. Holpuch Company), until the final suspension- about December 1, 1929—at which time the superstructure, walls and roof were in place. The Joseph A. Holpuch Company had given a contractor’s bond to complete the work, with the Fidelity and Casualty Company of New York as surety. This suspension seems to have been caused by failure of H. O. Stone & Company to continue and complete payments for bonds purchased, or to be purchased, by it. The cause for such failure is disputed but not here material. After this suspension of work, the history of this matter is one of various litigations. A number of mechanics’ liens were filed and an action in the State district court to foreclose thereon was filed December 11, 1929. May 27, 1931, judgment went allowing liens to a large total and ordering foreclosure sale of the property in satisfaction. Except the relatively small amount of two claims, the Hens were adjudged prior to the bond deed of trust. Sale was confirmed August 20, 1931, to the purchasers who were the prior lien judgment creditors. On the date (August 20, 1932) of expiration of the statutory redemption period, the bankrupt and the Holding Company began an unsuccessful action in the State court to set aside the above lien judgment and sale. In September, 1932, an unsecured judgment creditor of bankrupt began an action in the State court for appointment of a receiver for bankrupt. While this case was pending on continuance, members of a Chicago law firm with an unsatisfied judgment for fees filed, on October 11, 1932, an action in the United States Court for the District of Minnesota for appointment of a receiver for bankrupt. The same day, consenting answer was filed by bankrupt and an order entered appointing Charles B. Cooper as receiver. He qualified the following day. Four days later (October 15, 1932) an involuntary petition in bankruptcy was filed against bankrupt. Bankrupt filed an answer challenging the jurisdiction but this was later withdrawn and adjudication had on December 12, 1932, and the matter referred to the referee. February 20, 933, Paul E. Von Kuster was appointed eceiver in bankruptcy in order that an ction might be filed that day against the idelity and Casualty Company of New ork, as surety on the above contractor’s ond of Joseph A. Holpuch Company— raste in this action was necessary to avoid he bar of limitations. At the first meeting f creditors (April 28, 1933), Harold W. Cox was, without objection, appointed trustee by the referee (there being no agreement on a trustee by the creditors) and later was substituted for Von Kuster as plaintiff in the suit on the bond. The bond suit resulted in the recovery of $31,001.89, which, with either $10.00 or $20.00 other-where collected by the trustee, constitutes the entire assets of the estate. Numerous claims, aggregating many thousands of dollars have been allowed with no dividend payment thereon and, so far as we are informed, with no prospect of further collection of assets. So much for the historical outline of the general situation. We pass to consideration of this appeal. I. Removal Proceedings. Prior to the filing of the present removal proceedings, there had been three earlier like proceedings. The first removal proceeding was begun (December 6, 1935) by a petition of six creditors (A. P. Kimm, Fred E. Andersen, Hennepin Transfer Co., B. G. Shapiro, N. W. Remóle and J. H. Kammerdiener) praying removal of the trustee and his attorneys (Benedict Deinard and Oscar A. Brecke) and for disallowance of their fees. The matter was referred to the then referee (Alexander Mc-Cune) as special master. After full hearing the special master reported, with recommendations against removal and against forfeiture of fees. On review, the Court adopted the recommendations against removal and against forfeiture of fees of the trustee; but disapproved the recommendation against forfeiture of fees of the attorneys. The action of the Court as to attorney fees was based on failure to comply with General Orders 42 and 44 and local Rule 10. This order of the Court (July 22, 1937) required refund of $3,000.00 attorney fees theretofore paid. August 12, 1937, Brecke and Deinard filed a joint “petition and motion for rehearing” attacking that portion of the order denying their fees. Therein, among other things, they charged error in failing to hold that the order was without prejudice to an application for fees by them upon compliance with the General Orders and the Rules of Court and in failing to return the report to the referee for a corrected and supplemental report upon the filing by them of a proper petition and affidavit in accordance with the General Orders and the Rules if they could be properly made. January 24, 1938, an order was entered: “that the prayer of the respondents for rereference to the Referee be granted; that the case be referred to the Hon. Alexander McCune, Referee in Bankruptcy, for consideration of any presentation which respondents may make affecting their effort at compliance with the General Orders in Bankruptcy and local bankruptcy rule 10, and to act thereon in its relation to the subject matter of fees as in his judgment seems fitting.” From this order, an appeal was sought in this Court. This was opposed on the ground that such order was not a final order but purely intermediate and preliminary—not determining the rights nor disposing of the controversy between petitioners and respondents—and, therefore, not appealable. Appeal was denied. There was no appeal from those portions of the order of July 22, 1937, denying removal and denying forfeiture of the trustee’s fees. The second petition for removal was by Goldie (as sole petitioner), filed before the referee on January 14, 1939, and denied by him on January 20, 1939. No review of this denial was sought. Three days later (January 23, 1939), Goldie filed the same petition in Court. Respondents filed motion to strike this petition as “sham, frivolous, impertinent and scandalous.” After denying a motion by Goldie to continue until after determination by the referee of a pending motion to reopen and deny certain claims filed by Goldie and after affording opportunity to offer evidence in support of the petition, the Court denied a motion by Goldie to dismiss the petition without prejudice and entered an order denying the petition and striking it from the files. A petition for appeal made to this Court was denied. This Removal Proceeding. The Petition. June 28, 1939, four general creditors (A. P. Kimm, J. H. Kammerdiener, N. W. Remóle and Fred E. Andersen), whose claims had been allowed, filed a joint petition praying removal of the trustee (Harold W. Cox) and of his attorneys (Oscar A. Brecke and Benedict Deinard) ; forfeiture of all fees paid “or which might be paid them”; and an accounting and restoration of all such fees as had been drawn from the estate. This petition is quite long and involved but an outline of its essentials may be stated as follows. Statement of interest of petitioners and appointment of Mr. Cox, as trustee, and of Mr. Oscar A. Brecke and Mr. Benedict Deinard as his attorneys—such appointment of attorneys being under order of the referee of May 22, 1933. Allowance of fees of $11,000.00 to Brecke and Deinard on November 15, 1935. Outline of the above first removal proceedings (filed December 6, 1935) and of resultant proceedings. Further the petition sets forth the history of events leading up to the voluntary dismissal (February 15, 1939) of the appeal (taken on October 22, 1938) as follows. Harry S. Goldie had, prior to November 9, 1935, filed a petition for allowance of $3,277.35 as administrative expenses and, about the above date, two amended claims ($26,406.26 and $26,761.59) aggregating $53,167.85. On November 13, 1935, Mr. Goldie and his counsel and the trustee and his counsel entered into a stipulation of compromise and settlement of these three items, with “the full knowledge and express consent and approval” of the then referee (Alexander McCune). This stipulation provided for allowance of the administrative expense for $1,500.00 and of the two general claims for $50,000.00; that such allowances should be in full settlement of all claims of any kind by Mr Goldie; that the stipulation was made subject to approval of the referee; and that if allowed by the referee, the partie. agreed to accept such in “full compromise and settlement of the matters in dispute i connection with said claims”. The referee had endorsed his approval on each of said two “claims” for $25,000.00. On January 4, 1936, shortly after the hearings by the referee on the first removal proceeding, the trustee and his counsel filed a petition for leave to withdraw from the above stipulation “in so far as the same relates to the allowance of the so-called priority claim in favor of Harry S. Goldie in the sum of $1500.00.” About three years later (December 13, 1938) and while these petitioners were working on their above appeal, the trustee filed a petition for leave to withdraw from the stipulation as to the two general claims. Both of these petitions were in retaliation and reprisal against these petitioners and Goldie on account of the removal and fee proceedings. There was a creditors ^committee representing some 90% of the unsecured claims. This committee included the petitioners in the first removal proceeding (as also the present petitioners) and Mr. Goldie was chairman. The situation, as viewed by the committee at this time, was that their effort and expenditures in connection with the removal proceedings were considerable; that many unsecured creditors needed dividends; that the attitude of the trustee and his counsel was very “bellicose” toward the committee and its chairman; that Deinard stated they would war on Goldie and his claims until he would not recover a cent; that the “only way to get the estate closed and to maintain the settlement stipulation aforesaid in force, was to have the said appeal voluntarily dismissed”; that the committee “sensed, as it then seemed,” a desire of Deinard to get an immediate termination of the bankruptcy proceeding; and that Brecke had repeatedly said he would be glad to see the appeal dismissed as its pendency was the only obstacle to ending the fight on Goldie and closing the estate and as he badly needed the fee. Late in December, 1938, the Court called a conference of various counsel stating to them that he had received various inquiries from creditors as to when the estate would be closed and they would receive any dividends. The conference resulted mainly in an exchange of views. There were subsequent conferences of the Court with members of the committee and with the trustee and his counsel and one conversation between a member of the committee and Brecke. A meeting of the committee occurred shortly before (February IS, 1939) and three members thereof met the Court that day and reported in detail the proceedings of the committee and of its secretarial representative. In the meanwhile, a hearing was going on before the referee on the above petitions to withdraw from the stipulation concerning the Goldie claims. In the above series of conferences and contacts, the committee and Goldie were “definitely assured” by the trustee and his counsel that the appeal could be “safely” dismissed; that, since such dismissal would inure to the benefit of such counsel, concessions would be made in order to bring about immediate closing of the estate; that appellants could “safely” rely upon such assurances; that adjustments and allowance of all fees would be left to the Court with recognition of the view of appellants and of the committee that some reduction should be made in the fees involved in the appeal; that counsel for the trustee would press for no further fees, or at most for a nominal amount; and that the trustee and his counsel would “lay aside all animosity and would cooperatively proceed forthwith to bring the bankruptcy administration to immediate terminus.” “In sole reliance on said assurances by respondents, and not otherwise, the said appellants, petitioners herein, thereupon, on or about February 15, 1939, caused said appeal to be dismissed, and would not have done so save for such assurances of respondents and the trusting reliance of said appellants thereon. Said dismissal, moreover, was made in the belief, induced by respondents’ said assurances, that the interests of the bankruptcy creditors would be greatly served thereby through resultant saving of expense of administration and the closing of the estate forthwith.” The order of dismissal was entered in the appellate court about March 2, 1939, and mandate issued. Meanwhile, the above proceedings before the referee had been discontinued. About March 4, 1939, and immediately upon receiving notice of such dismissal, the fee of $7,950.47 and items of administrative expense disbursements ($107.25) were paid out to counsel for the trustee without notice to these petitioners or their counsel. Such “secret” payment was in violation of the understanding with the committee and petitioners and a breach of faith. Petitioners first had knowledge of such payment shortly after April 12, 1939, when they received a notice from the referee of a meeting of creditors—the notice listing such among the trustee’s disbursements. Between the dismissal of the appeal and the date for the creditors’ meeting (April 24, 1939), Goldie had prepared exhaustive data as to the items in his claims. This was done at the suggestion of Brecke, acting for the trustee and his counsel, and in accordance with specific directions which Brecke outlined and represented as sufficient to satisfy the technical requirements, as he represented, of his associates, so that the evidential submissions might be therewith completed as a matter of mere formality to obtain a pursuant order from the referee denying the petitions for leave to withdraw from the stipulation of settlement of such claims. In that connection, Brecke repeatedly promised to inform the referee that the trustee and his counsel “were now satisfied from said check-up on the said claims” that the stipulation should stand as a settlement “in the best interest of the Estate” leaving for adjudication only the issue of law (raised in the second petition for leave to withdraw) as to whether any of such claims should be subordinated to creditors holding bonds of the bankrupt guaranteed by Goldie. To the contrary, the trustee and his counsel urged the referee to set aside the stipulation of settlement and procured an order from the referee to that effect on April 22, 1939. Beginning with the date of meeting of the creditors, April 24, 1939, the trustee and his counsel have waged war on the committee, their counsel, Goldie and his claims at great expense to the estate. Such expense being occasioned by their “perfidious scheme, determination and conspiracy to defeat the claims which they previously had settled and adjusted by stipulation.” “The configurations of such perfidy and betrayal arise from a startling pattern of circumstances and testimonial developments in the instant proceedings before Referee Newton.” One instance is the accusation by Deinard that Goldie is attempting to evade the implications of liability to the bankrupt for $25,525.08 (involving a release from that liability), without disclosing that Deinard’s law firm was employed and paid by Goldie in connection with that release and advised correction of the bankrupt’s books to show such. Such deliberate concealment, by the trustee and his counsel, of material evidence in their knowledge and possession is a “brazen attempt to delude and deceive the court and to prostitute the orderly processes of law in their schemed determination to defeat the ends of justice.” A further instance is the failure to produce office files, etc., concerning services to Goldie under a subpoena duces tecum against Deinard and his law partners; and their testimony as to the existence thereof—leading to the conclusion that Deinard “has deliberately suppressed, concealed or destroyed evidence at all pertinent times in his possession or under his control, material to the issues involved.” A few days prior to April 24, 1939, “in the course of a circumstantial examination of said judgment roll” of the above mechanics’ liens foreclosure suit, petitioners first discovered a certain stipulation therein which was out of its normal place. This stipulation shows Deinard’s law firm as attorney for two lien creditors (one holding undelivered property of the bankrupt), Brecke as attorney for three creditors, and Brecke and Deinard as attorneys for the bankrupt. The papers in the foreclosure and subsequent litigation make clearly apparent “a fundamental conflict of interest has at all times existed, since said foreclosure, between the bankrupt and its various creditors concerned in said litigation and the subject matter thereof.” Because of this concealment, the trustee and his counsel should be removed, required to restore fees paid, all other allowances be set aside, and held for damages to the creditors. It was misconduct against the Court to remain silent as to this fact in the hearing before the referee in the first removal proceeding. Not only did the trustee and his counsel so conceal and suppress, but Brecke and Deinard each testified (in the first removal proceeding) that neither had ever represented the bankrupt except in a “single isolated occasion” in connection with a motion involving appointment of a substitute trustee under a trust deed covering the bond issue on the bankrupt’s property. Such testimony was perjury and res judicata does not apply to prevent introduction of this stipulation in this present proceeding—as ruled by the referee. Apparently for the purpose of showing that there yet remains much to be done before the estate can be closed, several matters are stated in paragraphs 46 and 47 of the petition. The conclusion is stated that “the interweaving interests of the respondents and their private dients are such that-there is no possibility under existing conditions of securing impartial administration of the bankrupt’s estate and prompt and proper closing thereof.” Reference. An order of reference to Walter H. Newton (who had succeeded Mr. McCune, resigned, as referee) was made, which contained the provision following: “The said Referee may in his discretion limit the scope of said hearing to the new matter only, set up by the petitioners, and the issues thereby created, counsel for the petitioners having heretofore advised the court that the essential parts are embodied in paragraphs 33 to 45 and in photostat exhibits ‘E’ to ‘H’ of said petition.” Anszver. The day following the reference order, a joint answer was filed with the referee by the trustee and his counsel, Brecke and Deinard. The answer is extensive-—answering the paragraphs of the petition separately. The substance thereof is as follows. A plea of sole jurisdiction in the referee under an earlier general order of reference and under the Chandler Act. A plea of res judicata based on the statement that all matters in the present petition were covered and determined in the first removal proceeding and have become final. That the first removal petition was, in fact, the petition of Goldie and filed to assist him in an effort to secure from Brecke and Deinard a portion of their allowance of fees and that this was found therein by the referee, sustained by the court and has become a final adjudication thereof. Admit that Brecke and Deinard and Deinard’s law firm (Leonard, Street and Deinard) represented certain lien claimants in the mechanics’ lien foreclosure suit. Admit that Brecke and Deinard testified, in substance, in the first removal proceedings, that the only service ever performed by them as attorneys for the bankrupt comprised an appearance in an application to substitute a trustee in the bond trust deed. Admit the allegations as to the order of July 22, 1937, and filing application for rehearing. Answering the allegation as to their position on the application hearing, say they “asserted that they could comply with the requirements of the General Orders and the Rules of this court, and allege” that they have done so. Admit petition for and allowance of petition for nunc pro tunc order amending order for their employment of May 22, 1933. Admit filing application for fees, that objections were filed thereto, that allowance thereof was made in sums stated in petition, that rehearing was denied, that appeal was taken and that record on appeal was transmitted to Court of Appeals. Admit filing of the two amended general claims and of claim for administrative expense by Goldie; that stipulation for allowance thereof was made, with approval of referee (McCune) “for the purpose of disposing amicably of. said unsecured claims and said petition, without putting said estate to the delay and expense of extended litigation and trial, and with the object of permitting the estate to be promptly closed, so that the creditors whose claims had been filed and allowed might promptly receive their dividend on liquidation”; and that allowance was “endorsed” thereon by the referee (Nov. 15, 1935) “but no formal order of allowance” was ever entered. Deny that any data supporting the claims was submitted to the referee prior to 1939. Admit filing petitions to withdraw from above stipulation concerning Goldie claims and to contest same on merits. Deny purpose of such petitions was other than to protect estate against “unjustified claims” and to assist in due and proper administration of estate. Deny that Benedict Deinard was ever employed by Goldie but allege that Amos Deinard, of the firm of Leonard, Street and Deinard, was employed by L. I. Sutterman, J. R. Mendelson, the bankrupt and Goldie “to perform, and did in the year 1929 perform certain services with respect to said Calhoun Beach Club building enterprise.” Alleges that the bankrupt, through Goldie and “in the names of certain persons masquerading as a creditors’ committee,” solicited claims in the name of George C. Stiles (counsel for bankrupt between filing of involuntary petition and adjudication) and that Stiles endeavored to vote such at first meeting of creditors in an attempt to control estate but was prevented on objection that claims were solicited. “Admit and allege that thereafter in the year 1935, said Goldie organized or reorganized a purported creditors’ committee, consisting of certain of his friends and associates masquerading as a committee representing creditors, under the name of ‘Creditors’ Committee, Calhoun Beach Club Holding Co., Inc., Bankrupt,’ and caused the same to solicit representation of claims, including the aforesaid claims solicited in the year 1933, on the basis of receiving 50 per cent of all additional sums receivable by claimants on account of any reduction that could be procured in allowance to the trustee and his attorneys, and caused the aforesaid removal petition to be filed in the year 1935, in the names of certain of the members of said purported Committee. Specifically deny that said Committee was formed by the action of any creditor aside from said Goldie, and certain of his friends and associates interested in the espousal of his claims; admit and allege that in response to said solicitation, said purported Committee received powers of attorney signed by certain [cerditors], and entered into champertous and unlawful agreements with them on the basis aforesaid; admit and allege that thereafter in the year 1936, said purported Committee solicited certain of said creditors to execute orders or assignments transferring to said Committee a portion or fraction of the dividends to be received by them upon their claims, and in fact received certain of such orders and assignments upon the champertous and unlawful agreements aforesaid. Specifically deny that said purported Committee was organized to protect the interests of any of the creditors aside from said Goldie. Allege that on or about March 1, 1939, the trustee was served with a purported ‘Notice of Substitution of Attorneys-in-Fact’, addressed to the Referee and to the trustee, signed by said George C. Stiles, wherein by reference to a schedule containing a listing of the claims of numerous creditors, said George C. Stiles purported to consent that one A. P. Kimm and Seth Lundquist, Esq. should appear in his place as attorneys-in-fact and representatives of all of said claimants, and that any dividends payable under or in connection with said claims should be forwarded to said A. P. Kimm and Seth Lundquist, Esq. as such representatives of said claimants, without prejudice to the attorney’s lien of O. J. Ertsgaard, Esq., and to the lien of said George C. Stiles against the claim of said Goldie, and wherein said A. P. Kimm and .Seth Lundquist assert that they now appear as attorneys in fact and representatives of each of said claimants in place of said George C. Stiles. Respondents are informed and verily believe that said A. P. Kimm is the person who has been denominated Secretary of said Committee, and that he is not an attorney-at-law, and that said Seth Lundquist is acting as the attorney for said purported Committee, and that said O. J. Ertsgaard was formerly an attorney for said Golding; and that said ‘Notice of Substitution of Attorneys-in-Fact’ was prepared, served, and filed for the purpose of effectuating said champertous and unlawful agreements, and with the design of affording said Kimm and Lundquist an opportunity to receive and negotiate the dividend checks payable to creditors. Allege that the trustee has filed his Petition for Instructions with respect to the persons to whom said dividend checks shall be made payable and the persons entitled to receive the same, and that the Referee has issued his citation to creditors thereon, and that a hearing thereon was duly set for Tune 29, 1939.” Admit orders, alleged in petition, on first removal proceedings and allowance of attorney fees of $7,950.47. Allege payment of dividends withheld because of impossibility to close estate while such proceedings pending. Deny statements concerning dismissal of appeal attributed to Brecke and Deinard except that Brecke stated the pendency of the appeal necessarily suspended closing of estate. Admit conference of counsel with Judge Joyce and discussion of situation of estate. Allege that trustee and counsel stated there that, if appellants dismissed the appeal, they would reserve full freedom of action; they would consider Goldie claims on merits without any personal bias; and Brecke stated he would accept reasonable fees for general service to estate taking into account prior allowance. Deny all allegations in petition as to statements by them that appeal could be “safely” dismissed; that they would not oppose Goldie claims; that they would consent to reduction of allowed fees; or would accept less than reasonable fee for general services to estate. Admit receipt of allowed fees and disbursements but deny any secrecy or any violation of understanding. Admit Brecke conferred with counsel for Goldie with reference to preparation of schedules and tabulations of such claims, pursuant to instructions from referee that such be prepared to shorten trial thereon. Deny Brecke represented that such tabulations would satisfy requirements of proof, or that presentation of claims would be mere formality, or that referee would deny petition to reopen claims or that Brecke would recommend such; and allege such were prepared after petition had been granted and such claims ordered re-examined. Admit draft of such order by Brecke at request of referee after announcement of such in open court. Admit and allege report of auditor, employed by bankrupt, and books of bankrupt show an indebtedness of Goldie to bankrupt of $25,525.08 never credited on claims. Admit services by Amos Deinard (of Leonard, Street and Deinard) (between December 1, 1928 and October 16, 1929) to bankrupt, Goldie and others in connection with Calhoun Beach Club enterprise and letter suggesting that books of bankrupt show the above amount ($25,525.08) “wiped out” in accordance with intention of Club minute book entry of February 7, 1927. Admit issuance of subpoena duces tecum and allege that all matters called for were produced and in court at that time except file of correspondence with Messrs. Mendelson and Sutterman, produced later. Admit existence of stipulation (Exhibit H, showing representation by Brecke or Deinard of various creditors and of the bankrupt, in the mechanics’ lien foreclosure suit) and representation shown therein. Allege it has been in the judgment roll of that suit since 1932 and that such judgment roll was introduced in the first removal proceedings. Deny any concealment thereof in judgment roll and allege it was bound therein by the court clerk “in its customary and appropriate place.” Deny any concealment of existence of this stipulation. Admit and allege that they have objected to introduction of such stipulation on proper grounds that it has been in judgment roll since 1932 and such roll was introduced in first removal proceedings and such objections have been sustained. Admit that Brecke and Deinard testified, in first removal proceedings that the only legal services performed for bankrupt by them was an appearance to an application to appoint a substitute trustee in the bond deed of trust. Deny that they “wilfully testified falsely to any fact upon said proceeding.” Admit certain matters yet pending and consent that claim No. 26 be re-examined if Goldie or his counsel will indemnify estate against loss by increase of the claim upon reexamination. Reply. As to the jurisdictional defense, aver that this matter was referred to the referee before answer was filed. As to defense of res judicata by first removal proceedings, deny that all matters set forth in this petition were included in the first removal proceedings or became res judicata; allege petition contains “new matters arising since” disposal of the first proceedings ; allege that matters concealed by respondents and wholly unrevealed in the first removal proceedings formed no part or substance of the adjudication therein; that it was the duty of respondents to reveal existence of the stipulation (Exhibit H) in the first removal hearing, but they concealed same and deliberately testified falsely as to their employment. Aver that the original letter (February 26, 1929) from Leonard, Street and Deinard to Goldie (concerning amendment of bankrupt’s records to show “wiping out” of indebtedness of Goldie of $25,525.08), which had been introduced by Goldie in the first removal proceedings, had been abstracted from the clerk’s office and secretly withheld by respondents during the hearing on Goldie’s claims and was not produced in response to the subpoena duces tecum but was later produced by Deinard from his files. As to reexamination of claim No. 26, that Brecke is attorney both for the claimant and the estate. Referee’s Findings. After full hearing, the referee filed (September 1, 1939) an extended and detailed report of his findings. The results stated in the report were as follows. The referee found that Goldie caused the formation of the “Creditors’ Committee”-; caused the first removal petition to be filed; caused that proceeding to be had; and was the moving spirit therein. Also, that the same situation existed as to the present proceedings. That there was identity of nominal parties and “of real parties in interest” in both the first and this removal proceedings. That the first removal proceedings had become final. That “all matters which transpired prior to the trial of the first removal proceeding” were res judicata “with the sole exception that the instant petitioners have a right to urge their claim that the trustee and his counsel testified falsely as to material facts in the first removal proceeding.” Concluding that he had no right to retry matters “within the enlarged scope” of the first removal proceeding nor to review previous orders of the court which have become final, the referee limited the hearing to two issues which were: “1. Whether the Trustee and his attorneys testified falsely as to any material facts in the First Removal Proceeding. “2. Whether the Trustee and his counsel have been guilty of misconduct since the trial of the First Removal Proceeding.” Such issues were considered separately and each found in favor of respondents. An order was made “in all things” denying the petition for removal. Court Order. On review, the Court determined (after extensive oral arguments and exhaustive briefs) that the findings of fact and order of the referee “be and hereby are in all things adopted and affirmed”; and “in all things” denied the petition for removal. From this order comes this appeal. Scope of Issues on Appeal. In the briefs and oral arguments, there is partial diversity as to what is presented for our decision. Appellants argue four points. Points I and II have to do with the proposition (as stated in I) that “The Trustee and His Attorneys Were Disqualified Because of Their Adverse Interests.” Point III is “The Nunc Pro Tunc Appointment and Pursuant Allowance of Fees Were Void.” Point IV is that “The Newly Discovered Evidence Calls for a Reexamination of the Qualifications of These Officers of the Court.” Appellees state the issues on this appeal to be “the two contested before the Referee, namely: 1. Whether appellees testified falsely as to any material facts in the First Removal Proceeding; and 2. Whether Appellees were guilty of misconduct after the trial of the First Removal Proceeding.” They argue four points which are: I, “Appellants do not argue either issue tried below”; II, “Findings on each issue sustained by the evidence”; III, “Orders of June 4, 1938, and June 20, 1938, not open to attack” (these two orders are the nunc pro tunc order and the pursuant order allowing attorney fees) ; and IV, “Appellees not disqualified” (a) by representation of general creditors or (b) by previous representation of bankrupt. The lack of agreement, thus revealed, as to the issues to be here presented compels this Court to determine for itself just what is before us for decision on this record; and, keeping the matters in the briefs in mind, to resolve such. Reconsideration of First Removal Proceeding Matters. One essential difference between these positions of the parties is as to what extent the trial court might decline, in the present removal proceeding, to reconsider matters which were or which might have been determined in the first removal proceeding. First. As to governing legal principles. Since a bankruptcy ' proceeding, from the filing of the petition to the final settlement of the estate, is but one continuous suit, and since the bankruptcy court is always open and has no terms, any order of the court may be reexamined and vacated within such pendency unless such vacation would disturb rights which have become vested in reliance upon such order or action. Wayne United Gas Co. v. Owens-Illinois Glass Co., 300 U.S. 131, 136, 137, 57 S.Ct. 382, 81 L.Ed. 557; Sandusky v. First National Bank, 23 Wall. 289, 90 U.S. 289, 292, 293, 23 L.Ed. 155; Wharton v. Farmers & Merchants Bank, May 5, 1941, 119 F.2d 487 this Court; Mulligan v. Federal Land Bank of Omaha, April 9, 1942, 129 F.2d 438 this Court; Wharton v. Farmers & Merchants Bank of Green Ridge, Mo., 119 F.2d 487, 489, this Court; Webster v. Barnes Banking Co., 10 Cir., 113 F.2d 1003, 1005; In re Windsor Square Development Co., 9 Cir., 91 F.2d 493, 496; In re Ives, 6 Cir., 113 F. 911, 913, 914. Whether a prior order should be reexamined or whether, if reexamined, it should be vacated is a matter of sound discretion. Hunter v. Commerce Trust Co., 55 F.2d 1, 4, this Court; McLeod v. Boone, 9 Cir., 91 F.2d 71, 73, and see cases just above cited. What will constitute an abuse of discretion depends upon the particular facts and situation in each case. 2 Remington on Bankruptcy, 4th Ed., p. 655, § 1111. The exercise of such discretion is reviewable. Woodford v. Cosden & Co., 289 F. 67, 69, this Court, and see cases above cited where review was had. Disputed questions of fact are reviewable only to ascertain “whether or not there was any substantial evidence” to sustain the ruling of the trial court. Good v. Kane, 211 F. 956, 958, this Court. Where the bankruptcy court acts in a matter of appointment or removal of trustee, “there must be a clear showing of abuse [of discretion] to warrant the appellate court in interfering”. Woodford v. Cosden & Co., 289 F. 67, 68, this Court Finding of a referee on conflicting evidence adopted by the trial court will not be disturbed “unless manifestly erroneous.” Platt v. Schmitt, 87 F.2d 437, 440, this Court, and see Rule 52(a) Rules of Civil Procedure, 28 U.S.C.A. following section 723c. “The court may, in its discretion, withhold all compensation from any * * * trustee, attorney * * * who has been removed from office or dismissed because of the unlawful sharing of fees or for any other cause.” Title 11 U.S.C.A. § 76, sub. e. Second. As to the facts. In the order referring the present petition to the referee, it was provided: “The said Referee may in his discretion limit the scope of said hearing to the new matter only, set up by the petitioners, and the issues thereby created, counsel for the petitioners having heretofore advised the court. that the essential parts are embodied in paragraphs 33 to 45 and in photostat exhibits ‘E’ to ‘H’ of said petition.” In the answer of respondents, one defense was that all of the matters set forth in the present petition were contained in the petition in the first removal proceedings ; had been determined therein adversely to these petitioners; and such determination has become final and the matters res judicata, wherefore these peti•tioners “are thereby barred and estopped from asserting said claims anew.” On the hearing, respondents moved “to limit the scope of the hearing to the new matter set out in the petition and the issues created thereby.” After stating identity of parties in the first and in this removal proceeding, the referee concluded that the decisions of the referee and of the Judge in the first removal proceedings were res judicata of “all matters which transpired prior to the trial of the First Removal Proceeding, with the sole exception that the instant petitioners have a right to urge their claim that the Trustee and his counsel testified falsely as to material facts in the First Removal Proceeding. The undersigned concluded that he has no right to re-try the matters which were within the enlarged scope of the First Removal Proceeding, and which were finally determined in that proceeding, nor to review such decisions or any of the previous orders of this Court which have become final.” Therefore, the referee limited the hearing to the two issues of: “1. Whether the Trustee and his attorneys testified falsely as to any material facts in the First Removal Proceeding. 2. Whether the Trustee and his counsel have been guilty of misconduct since the trial of the First Removal Proceeding.” All of these conclusions are stated in Finding X of the referee. The hearing consumed four days (July 12 -IS, 1939). The record before us does not purport to contain all of the testimony and evidence. The testimony and evidence in the transcript of this appeal is made up of (1) pleadings, evidence (or extracts from evidence) and orders of various proceedings all prior to the filing of this petition (including inter alia the first removal proceedings, the application of the trustee’s counsel for allowance of fees for general services, hearing as to Goldie’s claims and hearing on the trustee’s “interim account” or report) ; and (2) testimony and certain exhibits introduced at the hearing on the present petition. This latter consists of a portion of the testimony of A. P. Kimm and various exhibits which are not a part of this testimony by Kimm. In the course of this testimony by Kimm, there is no objection or ruling or statement concerning the scope of this hearing revealing the attitude of petitioners on the above limitation of issues except one statement by counsel for petitioners (appellants) where, in connection with an objection to a question, he stated: “I might make the further objection that it is not proper cross-examination and I am also going to say it is res adjudicata because it has been covered before. Perhaps my objection on that line would not be good, though, but, at any rate it seems to me that it is quite foreign to the issue of the trustee’s and counsel’s guilt in this case which relate fundamentally to three propositions, trickery, fraud and deceit, double crossing so far as the Creditors Committee is concerned, and then false swearing on the part of trustee’s counsel.” The petition for review contains a specific reference to Finding X as follows: “5. Division X, pages 11 and 12, of said decision, should be stricken as manifestly presenting simply views and notions on the part of the Referee, wholly apart from and devoid of any content of fact.” In the short memorandum on the petition to review filed by court, the court stated: “many of the issues presented have already been disposed of by orders of Judge Joyce and former Referee McCune.” The findings of fact and order of the referee were “in all things adopted and affirmed.” The Statement of Points by appellants contains no specific attack upon the affirmance “in all things” of all findings of the referee, including of course the finding X, although it attacks other findings specifically. It does contain “point 11” as follows: “The misconduct of the Trustee and his Counsel, in violating General Orders 42 and 44 in Bankruptcy and in entering into the fee-splitting agreement aforesaid, was contrary to public policy and professional ethics and to the purpose, intent and spirit of the Bankruptcy law and General Orders in Bankruptcy, and constituted subversive misconduct which could not be excused or condoned by any court order, and which requires the removal of the Trustee and his Counsel.” Conclusion. In the order of reference, there appears the permission to the referee “in his discretion” to “limit the scope of said hearing to the new matter only, set up by the petitioners, and the issues thereby created.” This action of the Court was, at least in part, induced by the attitude of petitioners, the Court stating in the order “counsel for the petitioners having heretofore advised the court that the essential parts are embodied in paragraphs 33 to 45 and in photostat exhibits ‘E’ to ‘H’ of said petition.” In the very brief oral testimony taken on this hearing and in connection with the introduction at this hearing of various exhibits, there is no statement of objection to the limitation of issues made by the referee except the statement (above quoted) by counsel that the issue as to the trustee and his counsel in this case “relate fundamentally to three propositions, trickery, fraud and deceit, double crossing so far as the Creditors Committee is concerned, and then false swearing on the part of trustee’s counsel.” In the petition for review, the only attack upon that part of the findings of the referee (Finding X), which stated the limitation of the issues, is that it “should be stricken as manifestly presenting, simply views and notions on the part of the referee, wholly apart from and devoid of any content of fact.” In this just stated position of petitioners, up to the order of the court (here appealed), we can find no basis for concluding that this limitation of issues by the referee was so challenged in the court below as to leave that matter open for attack upon this appeal. However, if it were open here, there is no ground for disturbing it. As shown by the cases cited above, the trial court has a discretion in such matters and such exercised discretion will not be overturned on appeal except upon a showing that such has been abused. It is not an abuse of discretion in a bankruptcy proceeding for the trial court to refuse to retry the same matter upon essentially the same fact situation. Even where the same matter is sought to be tried again upon the basis of additional facts, there is a discretion to try or not which will not be disturbed except for abuse; and whether there is such abuse may be affected by the situation that such additional facts were in existence when the first hearing was had and could, with reasonable diligence, have been then presented. Here the court, in referring the first removal proceeding, instructed the referee broadly that the reference was “for the purpose of finding out, and making a report to this Court, as to whether or not there is anything unethical, unlawful or improper in the conduct of any of those whose names are mentioned in connection with that petition.” In his report, the referee expressly recognized such instructions and stated that he had ruled “that inquiry might be made by the petitioners beyond the allegations of their petition, in order that a complete and final determination might be made of all charges against the trustee and his attorneys.” With one possible and one close exception, every matter now urged was included in the evidence at the first hearing. The possible exception is the charge that Brecke and Deinard each knowingly swore falsely in the hearings on the first removal by stating that their sole employment by the bankrupt was in connection with a motion to substitute a trustee in the deed of trust securing the bonds issued by bankrupt. We say possible exception because of the situation now set forth. This charge of false swearing is founded on a stipulation (Exhibit H to the present petition) between five lien claimants (in the State court lien foreclosure suit) and the bankrupt. This stipulation was signed, for the bankrupt, by Harry S. Goldie. The stipulation was “approved by the attorneys of record for all parties to said action.” Under this approval, appears the signatures of “O. A. Brecke and Benedict Deinard Attorneys for Calhoun Beach Club Holding Company.” It is upon the last quoted matter that reliance is here placed to show perjury of Brecke and of Deinard in the first removal proceeding. This stipulation was in the judgment roll of the mechanics’ lien foreclosure suit in the State court and that judgment roll was introduced in the first removal hearings. Also, Mr. Goldie seems to have referred to this stipulation in his testimony in the first removal proceeding, so he must, in an incidental way at least, have had its existence in mind at that time although its bearing on the then hearing seems not to have impressed him or anyone else-—probably because the misconduct of the trustee and his counsel most relied on in that hearing was in connection with representation of interests other than the bankrupt and with other matters. However, this matter of false swearing in the first removal hearings was the first of the two issues expressly stated and tried by the referee in the present proceedings. The clear exception is as to misconduct of respondents since the first removal proceedings—this being the second issue stated and heard by the referee in the present proceeding. Among the matters included in the testimony at the first removal hearings, are exhibits E, F and G to the present petition, being the three itemized bills for services (beginning December 1, 1928, and ending October 16, 1929) rendered by Leonard, Street and Deinard (1) to “Mr. Harry Goldie, Leonard Sutterman, and Calhoun Beach Holding Company” on July 1, 1929, and (2) to “Mr. Harry Goldie (Joint account with Mr. Leonard Sutterman and Mr. J. R. Mendelson and Calhoun Beach Holding Company)” on September 5, 1929, and November 1, 1929. Carbon copies thereof from the office files of Leonard, Street and Deinard were introduced, at the hearing on the first petition for removal, by Deinard who specifically called attention to them and counsel for the then petitioners sought, unsuccessfully, to exclude them. From the above recitation of the situation, it is clear that the referee and the court were innocent of any abuse of discretion in eliminating from consideration, on this present petition, all matters occurring prior to the hearings on the first removal petition with the exception of the charges of false swearing by Brecke and by Deinard in those hearings. II. The Nunc Pro Tunc Order. Point III of appellants’ brief is “The Nunc Pro Tunc Appointment and Pursuant Allowance of Fees Were Void.” This is presented under the sub-headings: “A. The Court Had No Power to Make the Nunc Pro Tunc Order of June 4, 1938”; “B. The Nunc Pro Tunc Order of June 4, 1938, Was Contrary to Public Policy and Therefore Void”; “C. The Order of June 20, 1938, Allowing Brecke and Deinard Attorneys’ Fees Was Void.” In their brief, appellees counter the above under an argument headed “Orders of June 4, 1938, and June 20, 1938, Not Open to Attack”, where-under they argue (1) that appellants’ attack upon the orders is collateral and the orders are not open to such attack because they were appealable, were appealed from, and the appeal voluntarily dismissed, whereupon they became final; (2) that appellants conceded, before the referee, that they could not collaterally attack such orders, took no exception to the referee’s ruling on the point, and cannot here reverse the position they took in the trial court; (3) even if the order of June 4, 1938, were void (as contended) yet the court determined it had jurisdiction when it made them, the determination was appealable and became res judicata against collateral attack; (4) that not only was such order not void, it was not erroneous because a proper exercise of the bankruptcy court’s discretionary power. It is clear that this attack upon the orders is collateral and such seems conceded by appellants in their brief (last paragraph p. 32). Against collateral attack, these orders are protected by the rule of res judicata. Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 376, 377, 60 S.Ct. 317, 84 L.Ed. 329; Stoll v. Gottlieb, 305 U.S. 165, 172, 59 S.Ct. 134, 83 L.Ed. 104; Oriel v. Russell, 278 U.S. 358, 363, 49 S.Ct. 173, 73 L.Ed. 419; Levy v. Charlesworth, 74 F.2d 495, 496, this Court; In re Schulte-United, 59 F.2d 553, 559, this Court. This does not mean that any order made in the course of administration of a bankrupt estate is not open to challenge therein, so long as vested rights founded thereon have not intervened; but the only permissible method of so doing is by direct challenge (such as motion to vacate) where the bankruptcy court may exercise its reasonable discretion and such is reviewable (see cases cited under I of this opinion and Stoll v. Gottlieb, 305 U.S. 165, 176, 59 S.Ct. 134, 83 L.Ed. 104; Vallely v. Northern Fire & Marine Ins. Co., 254 U.S. 348, 41 S.Ct. 116, 65 L.Ed. 297; In re Schulte-United, 59 F.2d 553, 560, this Court. Another reason why this point is not open for examination on this appeal is that, as presented here, it was not an issue before the referee. This Court is not a court in bankruptcy but acts purely as an appellate court and will not consider questions not presented below. Amick v. Columbia Casualty Co., 101 F.2d 984, 986, this Court; Cowherd v. Phoenix Joint Stock Land Bank of Kansas City, 94 F.2d 329, 331, this Court; Levy v. Charlesworth, 74 F.2d 495, 496, this Court; In re Schulte-United, 59 F.2d 553, 559, this Court. The matter is presented here as though the validity of these orders had been challenged and determined below. That was not the case. The petition presents no such issue. No such issue was presented to or passed on by the referee. At the hearing before the referee, counsel for petitioners correctly stated the general scope of the issues to be “three propositions, trickery, fraud and deceit, double crossing so far as the creditors committee is concerned, and then false swearing on the part of trustee’s counsel.” III. Fact Issues as to Misconduct. The fact issues considered and determined by the referee and affirmed by the court are two: (a) “Whether the trustee and his attorneys [knowingly] testified falsely as to any material facts in the First Removal Proceeding”; and (b) “whether the trustee and his counsel have been guilty of misconduct since the trial of the First Removal Proceeding.” (a) False swearing issue. This issue has to do with a statement in the testimony of Deinard and of Brecke at the hearing of the first removal proceeding. Each of these witnesses testified that the only legal services by him to the bankrupt was in connection with opposition to a motion to substitute a trustee under the deed of trust securing bonds issued by the bankrupt, about April 24 and 25, 1931. In the answer of respondents to the present petition, they admit this statement was not true. The issue here of misconduct is not that the statement was untrue but that it was deliberately made with knowledge of its falsity. The referee found that, in addition to the services in connection with the above substitution of trustee, the two attorneys represented the bankrupt in three other instances in the lien foreclosure suit. As stated by the referee, those three were as set forth in the footnote. In their brief (pp. 8-9), appellants list ten instances, of which three (numbered 2, 3 and 6) are those stated by the referee, and two (numbered 4 and 5) related to the substitution of trustee matter (the matter testified to by Deinard and Brecke at the first removal hearing). The other five are set forth in the footnote. In appellants’ petition to review, there was no exception to or mention of the action of the referee in confining the instances of service to the above three. In no way, appearing in this record, was this drawn to the attention of the court below in connection with such review. The first appearance in this record is in point “6” of the “Statement of Points” on this appeal. Since this matter of error, if it be such, is raised for the first time on appeal and not presented for action to the trial court, it is not open here. Amick v. Columbia Casualty Co., 101 F.2d 984, 986, this Court, and cases there cited. We are confined to the three instances discussed by the referee. The detailed discussion of the evidence bearing on the question as to whether Brecke or Deinard consciously swore falsely as to this matter on the first removal proceedings is analyzed in detail by the referee in his findings and his conclusions. These are set forth in the footnote. On review, the Court entered an order affirming and adopting the findings of the referee “in all things”; and filed a brief memorandum wherein he stated: “Counsel have made extensive oral arguments to the Court and have filed exhaustive briefs which have been carefully considered. I have examined all of the files and records and have fully familiarized myself with the various contentions of the parties. I might spend weeks in preparing an extensive memorandum setting forth my views in great detail, but no particular good would be accomplished. I cannot hope to convince the aggrieved parties tha