Irving I. Bass, Trustee in Bankruptcy of Zipco, Inc., a Corporation, Bankrupt v. Robert H. Shutan

Zipco Inc., a corporation, found itself in financial difficulties. Milo M. Turner at the time was its sole shareholder, director, president, and general manager. Prior to the institution of bankruptcy proceedings certain checks were issued by the corporation in payment of wage claims. The checks were dishonored by the bank upon which they were drawn because of insufficiency of funds. Turner, as an individual, and not in any connection with the corporation secured funds and paid to the individuals holding the checks the amounts thereof. He took in return an assignment of the checks.

The financial condition of the corporation continued to deteriorate and it was decided to petition for arrangement' under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq. This action required the service of an attorney. Turner consulted appellee Shutan who agreed to undertake the work for the sum of $1,500.

Turner was without funds to páy said amount so it was decided that Turner assign to Shutan the checks representing the amount of the wage claims which Turner had paid.

The petition for arrangement under Chapter XI was prepared by Shutan and filed. The corporation was adjudicated a…