General Assignment for Benefit of Creditors of Shay, In re, A--943
| Decision Date | 06 July 1962 |
| Docket Number | No. A--943,A--943 |
| Citation | 183 A.2d 435,75 N.J.Super. 421 |
| Parties | In the Matter of The GENERAL ASSIGNMENT FOR the BENEFIT OF CREDITORS of Arthur SHAY, individually and t/a Michael Shay Toys, Assignor, to David E. Feldman, Assignee. David E. FELDMAN and Kleinberg, Moroney & Masterson, Appellants, v. SCHRANZ & BIEBER CO., Inc., Respondent. |
| Court | New Jersey Superior Court — Appellate Division |
James E. Masterson, Newark, for appellants (Kleinberg, Moroney & Masterson, Newark, attorneys for assignee).
Ralph Neibart, Newark, for respondent.
Before Judges CONFORD, GAULKIN and KILKENNY.
The opinion of the court was delivered by
KILKENNY, J.A.D.
The Somerset County Court allowed the assignee, David E. Feldman, $1,767.65 'as commissions,' $1,317.81 'as his disbursements,' and $6.80 for his out-of-pocket expenses, and denied the application of Kleinberg, Moroney & Masterson (hereinafter called the attorneys) for a fee as attorneys for the assignee. The assignee appeals, contending he should have been allowed more. The attorneys appeal contending they should have been allowed a fee. The assignee also appeals from the award of a $400 counsel fee to Ralph Neibart, attorney for the objecting creditor.
The trial court properly denied the application of the attorneys for the assignee for a counsel fee. They had not been engaged by the assignee upon an order of the court, as required by R.R. 4:69 and R.R. 4:68--4. Furthermore, there was no real need for the engagement of attorneys for the assignee in this case. The assignee is a member of the bar experienced in this type of proceeding and could have performed all of the services rendered by his attorneys. There was no litigation of any kind, and the only allegedly legal work involved herein consisted in the ordering of some lien searches, an examination of the respective interests of the assignor and his wife in a business, and the examination of the assignor under oath. All of these matters were within the easy competence of an attorney trained in insolvency matters, such as the assignee herein. In re Xaviers, Inc. 66 N.J.Super. 561, 169 A.2d 708 (App.Div.1961), is dispositive of this issue.
The award of a $400 counsel fee to Ralph Neibart, attorney for the objecting creditor, Schranz & Bieber Co., Inc., was proper. Mr. Neibart, on behalf of this creditor, whose claim represented 35% Of all the claims of creditors, had filed exceptions to the applications of the assignee and his attorneys for commissions and counsel fees, and to the disbursements made by the assignee as shown in his accounting. The assignee asked for commissions in the sum of $3100--approximately 20% Of the gross receipts--and in addition thereto prayed allowance for disbursements made by him for his bond premium, legal advertisements, transcripts of testimony, appraisal fees and auctioneer's fees, and other expenses in the total sum of $1317.81. His attorneys asked for a counsel fee of $2500. As the result of the exceptions filed on behalf of his client by Mr. Neibart and the hearing thereon, the application for counsel fees in favor of the attorneys for the assignee was denied and the claim for commissions was reduced from $3100 to $1767.65. Thus, the attorney for the objecting creditor performed services which resulted in a saving to the estate of $3832.35. Since the attorney's objections to the commissions, counsel fees and disbursements operated materially to the benefit of the estate and the ultimate benefit of the creditors generally, he was entitled to the reasonable counsel fee awarded to him by the trial court. In re Broad Street National Bank of Trenton, 37 N.J.Super. 171, 117 A.2d 129 (App.Div.1955); 7 N.J. Practice Series (Clapp, Wills and Administration) (3d ed. 1962), § 1545, p. 258, and § 1546, p. 263.
The assignee raises the technical objection that the award of a counsel fee to Mr. Neibart was erroneous because he had not served any prior notice on the creditors of his intention to apply therefor. We find no substantial merit in this contention. Any creditor given notice of an application for the approval of an account and for fees and commissions is on constructive notice that any one of the other creditors might file exceptions and, if the exceptions are sustained to the benefit of the estate, that the attorney for the exceptant may be allowed a counsel fee. Under the circumstances, we conclude that the award of this reasonable counsel fee for the valuable services rendered for the benefit of all the creditors by the attorney for the objecting creditor was proper.
We turn now to the award made to the assignee. His gross receipts were reported as being $15,461.30 and upon revision were established at $15,505.87. He asked for a commission of $3100--approximately 20% Of the gross as originally reported or revised--and in addition thereto he asked for approval of the following disbursements:
Assignee's bond premium $110.00
Legal advertisement--notice of
assignment 47.58
Legal advertisement--notice of sale 9.18
Advertising notice of sale 51.77
Transcribing testimony 87.50
Transcribing testimony 118.75
Overpayment on account receivable 20.00
Expenses of assignee during
administration 47.75
Appraisal fee to Joseph A. Sidoli 100.00
Appraisal fee to Murray Wengliss 50.00
Auctioneer fee to A.J. Willner 675.28
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Total disbursements $1317.81
The trial judge construed our opinion in In re Xaviers, Inc., supra, as meaning that he could allow the assignee under N.J.S. 2A:19--43, N.J.S.A., no more than 20% Of the gross receipts for his commissions, expenses and disbursements, no matter what those expenses and disbursements represented. Upon that theory, the trial court figured that 20% Of the gross receipts of $15,461.30 amounted to $3092.26, deducted therefrom the aforesaid disbursements of $1317.81 and the assignee's out-of-pocket expenses of $6.80, and awarded the net difference of $1767.65 to the assignee as commissions. N.J.S. 2A:19--43, N.J.S.A., reads as follows:
'Such commissions and allowances shall be made to the assignee or to the personal representatives of a deceased assignee, or to a person who has been removed by the court from his office as assignee for any cause other than his misconduct, on any intermediate or final account, as the court shall consider just, but not in excess of 20% On all sums received by the said assignee, except that this limitation shall be inapplicable where the amount of the estate is less than $500.'
The assignee argues that the construction placed on In re Xaviers, Inc., supra, by the trial judge was erroneous and that his disbursements aforesaid of $1317.81 should not have been deducted from the maximum statutory allowance of 20%, N.J.S. 2 A:19--43, N.J.S.A., because these disbursements do not constitute 'allowances' within the meaning of that statutory provision. He points to the fact that in the case of In re Xaviers, Inc., supra, the item therein of $446.51, described therein as 'distributions' but which actually represented disbursements for legal advertising, bond premium, appraiser's and auctioneer's fees, was not deducted from the 20%, because not regarded as 'allowances' within the act, and he asserts that the disbursements of $1317.81 in this case were for the same type of expenses. The assignee further asserts that the language of the trial judge indicates that he wanted to give the assignee the full 20% Of the gross estate for his commissions, plus his $6.80 out-of-pocket expenses, but felt himself prevented by our decision in the Xaviers case. On that reasoning, the assignee asks us to reverse the trial court and allow him 20% Of the gross for his commissions and $6.80 out-of-pocket expenses, plus the aforesaid disbursements of $1317.81.
Our determination in Xaviers was that the 20% Limitation of the statute, including both 'commissions' and 'allowances,' was confined to 'sums awarded directly to the assignee,' whether by way of compensation for actual services or reimbursement for out-of-pocket expenditures. It did not include items of expense paid out of the estate for which approval of the court was sought on the accounting. (66 N.J.Super., at p. 577, ...
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