328
FEDEUAL REPORTER.
In ?'e COOK and another. (District Court, S. D. New Y01'k. 1. July 5,1883.)
BANKRUPTCY-ASSIGNEE'S ACCOUNT Fon ATTO"NEY'S CHAnUEs.
An as,ignee's account for moneys patd to an attorney for services not authorIzed hy the court cannot be allowed beyol1l1 wimt the evidence shows to be reasonable, having reference to the amount and circlllllstanees of the e3tate. OF BAXKRUPT'S ESTATE.
2. 3. 4.
It is the hllsiness d the as,ig;.:tee to make reasonahle pl'Liiminary inquiries as regards the facls of alleged conce"lment of tiLl bankrupt's property S,UlE-ASSIGNEE CIADIIXG Fon SEHYICES AS ATTO·\l\EY.
An attorney, in performing the ordinary dUlies of the assignee, cannot claim from the estate compensation as for professional services. IN SEAHCUlXG Fan PeOPEHTY.
An assignee cannot be permitted to ('xpc.ld the ell,ef part of collected lly him in the ('mployment of an attorney to tind addition.al pr\)perty, which results in nothing. 5. S,UIE-,\LLOWANCE FOIt ATTOHNEY'S FEES. . ,Yhen' in b7-! an re, e.ved $1,250 upon sale of the bankrupt's bookaccounts ahout tw,) months after the adjlld cation, and in 1883 presented his account. in which $171.2i.l was charged for 'sements and $1,06.3.36 for moneys paid to hiS a torney for alleged services, none of which was ever anthorized by the court, and the attorney being dend and no hill of items being produced. and the testimony as to services being vague and general, held, that i!i:300 only shonld be allowed for the attor!ll'y, and that the assignee should account for the residue, with intelest -tile money been "i by his 0 \ ,1 business firm.
Objections to an Assignee's Discharge. Hoes J: .Horgan, for the assignee. D. TV. }.'lIcLenn, for creditors opposed. BROWN, J. The assignee of the bankrnpts in the above matter applies for the approval of his account, and for his discharge, upon the report of the register, to which objection is made on behalf of the creditors. The eutire receipts of the assignee amounted to the sum of $1,250, derived from a single sale of the bankrupt's hookaccounts, of $6,fiOU,made on the twenty-fourth day of November, 1874. No other collections were made by the assignee from any source. His charges against the estate, in the account presented by him, are being $44.86 in excess of his receipts. There has never been any dividend to creditors. The estate is debited $171.20 for fees of the clerk, register, and mar::;hal, and for advertising in the various stages of the The residue of the debits is for moneys paid to E. C. D. Kittrenge for his senices as attorney for tlle assignee, as follows: June 13, 1874, $50; December 7,1874:, $250; November 29, $368.36; December 16, 1876, $400; in all, $1,OG8.36. The attorney died before the presentment of the assignee's account. The bankrupts were copartners, doing husiness in this city, and proceedings in bankrnptcy against them \'I'ere commenced by a peti-
'IN RE COOK.
329
tion in involuntary proceedings presented by the Meriden Company, and Bramhall, Deane & Co., two of their largest creditors. An adjudication of hankruptcy was made on the fifteenth of September, 1874, and on the thirteenth of October following, Mr. Deane, a member of the firm c,f Bramhall, Deane & Co., was appointed and qnalified as assignee. On the fourteenth of November, upon an application to the court for leave to sell the book-accounts, an order of reference was made to ascertain the facts and report; and upon the report thereon an order permitting the sale of the book-accounts for $1,z50 was made on the twellty-follrth of November, 1874, and on the same day the sale was made, and the sum of $1,250 paid to the assignee as above stated. 'l'his sum was then deposited by him with his own firm of Bramhall, Deane & Co., and an account on their ledger was opened with the assignee. Mr. Kittredge had been previollsly the attorney of Bramhall, Denne & Co. He conducted the involuntary proceedings upon which the bankrupts were adjudicated. The foUl" sums paid to him, and charged in the assignee's account as above stated, were all paid by DramlJUll, Deane & Co.; the first two by their checks payable to his order; the last two hy their promissory notes made to the model' of Kittredge; the one for $400 pa.yable two months after date, and the one for $368.36 payable one month after date. In the testimony upon the accounting it i8 stated by one of the firm that the reason why the last two payments to Kittredge in November and December, were made in notes instead of 11Oney, was because "it was not convenient at the time to pay in money." As there was then a large bt'.lance in the firm's hands of the money deposited by the assignee witll the firm on the twenty-fourth of November, 1874, the aum'e statement is sufficient evidence either that Kittredge was not at that time deemed to be employed by the asas such, but by the firm on their own account to investigate the bankrupt's affairs, and that these notes wel"e given in payment of their own debt; or else tlJat tile sum of $1,250, deposited with them by the assignee, had been used by the firm for their own uenefit: and, in the latter case, as the assignee was a member of the firm, the use of the money must be deemed a use by himself, and he mllst be charged with interest. The sums paid to Mr. Kittredge as attorney from 1874 to lS7fi, making in the aggregate $1,068.3H, as above stated, were all paid without any orner or approval of the court. To be allowed as charges against the estate, they must, therefore, be shown to have been eith8r necessarily or reasonauly incurred uy the assignee, or expended for the benefit of the estate. Gen. Ord. 30, § 5099; In Noyes, 6 N. B. R. 277; In re JVllrshinq, 5 N. B. R. 3nO; In 1"1' Davenport, 3 N. B. E. 77; Plott v. Archer, 13 B1atchf. 35t; Hunker v. Bill.q, 9 FED. REP. 277; In re Drake, l± N. B. R. 150; Ex parte JVhitcumiJ, 15 N. D. R. 92. It is impossible to say, in reference to most of the payments to Ur.
330
FEDERAL REPoRTbR.
Kittredge, that they are shown to have been for services either neces{lary or beneficial to the estate. The testimony upon the accounting in support of the charges is all vague and general. No bill of items is presented showing what the precise services, or what any of the payments, were for. If any bill of items was ever rendered by the attorney it is lost. The services rendered by the attorney are shown in a general 'yay to have been: (1) Procuring the adjudication in bankruptcy, for which a reasonable sum may be allowed, (In re N. Y. Mail Steam-ship Co. 7 Blatchf. 178;) (2) procuring the ortIer for sale of book-accounts in November, 1874; (3) consultations as to a chattel mortgage in this city, and a mortgage on real estate in Warren county, both foreclosed long before the bankruptcy; (4) examination of the bankrupt, which was not concluded, was never signed, and the minutes of which are not produced, but are lost; (5) investigations as to property of the bankrupts alleged to be at Rutland, Vermont, on which business Mr. Kittredge went there twice, the result being that they concluded that the writer of the letters on which this action was based "did not know what he was writing about," and nothing was discovered, nor any legal proceedings, even, were ever instituted for the recovery of anything there. The larger part of the attorney's charges, namely, those in November and December, 1876, for $708.36, is sought to be justified by the endeavors to find property of the bankrnpts alleged to have been concealed at Rutland, and the attorney's necessary visits there on that business, as above stated. But I find nothing in the evidence or the circumstances sufficient to justify any considerable charges for an attorney in that matter. The employment of professional services mnst be cautiously guarded, and careful regard at all times maintained for the interest of the creditors, and the amount and circumstances of the estate. In re N. Y. Mail Steam-ship Co. 7 Blatch£. 178; in re Drake, 14 N. B. R. 150. It is the business of the assignee himself to make all reasonable preliminary inquiries in regard to alleged concealment of property, and not to employ an attorney to do the assignee's proper work. The visits to Rutland were merely for inquiry into facts on the basis of certain letters received from some one there; inquiries such as any intelligent business person was competent to make, either in person or by correspondence. In this case, after the sale of the book-accountB, in November, 1874, the assignee paid little or no attention to the estate, hut left everything, according to the testimony, to the management 01 1\lr. Kittredge. If an attorney undertakes such business, 11e cannot claim compensation from the estate as for professional services. It would be an opprobrium upon the law, and is not to be tolerated, that an assignee, instead of distributing the funC!. collected among the creditors to wbom it belongs,. should be allowed to expend it all, or most of it, in the employment of counsel to perform the' ordinary duties of the. - assignee, or in the ., .' alleged but vain endea \"01' to. disco\'er !. -
IN RE RANSO.u.
331
other property, without the consent of creditors or the sanction of the court. Upon this subject I concur fully in the remarks of NIXON, J., in the Case of Drake, 14 N. B. R. 150, above cited. In regard to the other services of the attorney, the evidence is so vague that it is difficult to determine, in the absence of a bill of particulars, what \Vould be a reasonable compensation. There is no evidence of any special difficulty, or of laborious professional work of any kind, and the estate itself is small. Upon the whole, I think that $300, including the two items of June 13 and December 7,1874, will be a liberal compensation for all services of the attorney which the evidence discloses, or which may be fairly inferred from it; and it is more than could be allowed upon such evidence \Vere the attorney still living and his evidence procurable in support of the charges. The item of $58.55 paid to the attorney, September 18,1874, appears by the ledger of the Clerk of this court to have been paid by Mr. Kittl'edge for clerk's fees a few days afterwards, and is embraced in the sum of $171.20, disbursements above mentioned. . The assignee should, therefore, be allowed $300 for all the services of Mr. Kittredge as attorney; the sum of $171.20 for further disbursements; and $55.32, his own fees and commissions i-leaving from the sum of $1,250, collected by him, a balance of $723,48,w,hich, \Vith interest thereon from November 24, 1874, (with which the as-, signee must be charged, as the money was employed in the business of his own firm,) amounts to $1,092.45, on payment of which, less the sum of $50 costs allowed on tbis accounting, the assignee will be entitled to his discharge.
In re 1. BANKRUPTCY-EQUITABLE DOWER.
RANSOM.
(Distrtc' Court, S. D. Dew York.
June 28, 1883.)
Under the Hevised :Statutes of New York a widow is not entitlc(l to cquitable dower except in lands of which the husband was equitably seized at the tinic of his death, and has no interest in contracts of purchase which thc husband aliened in his life-time; nor has she any inchoate dower unless the husband have a valid and recognizable equitable estate. l:3.BIE-PARTNERSHIP PROPERTy-TITLE IN NA)IE OF PARTNER-TuUST.
2.
"Vhere four out of six members of the firm of "V. A. R & Co. contributed the consideration for the purchase of va 1m. hIe real estate which wa·safterwards :used in the firm business, and the title, by the arrangement and concurrence of tile four associates, was taken for convenience in tile name of .'V. A. It. only, and the rents for many years were divided ratably among the four, according to their contributions of tile purchase money, until the bankruptcy of all of them, when the property was transferred, first to a voluntary assignee and afterwards to the.assignee in bankruptcy, held that, under the New York HevisedStatutes, the other three associates had no recognizable.equitahle estate in tile property;and that"their wives had ·nO inchoate tight 01 dOwer thcrein. Held, also, that if the associates were as partners in.R particular purchase, still the property would be treated as personalty not subject to dower.