179 F. 210 | 3rd Cir. | 1910
Lead Opinion
This is an appeal by Jacob Gold from an order of the bankrupt court confirming a report of á referee which rejected a claim of said Gold. The case arose on a certified question, viz.:
“Whether, under the facts set forth in the petition of Jacob Gold, and the testimony and evidence thereunder, the petitioner is entitled to have- allowed him the sum of $680 as commission on the sale of certain real estate.”
The petition of Gold set forth that he was a licensed real estate broker; that the highest price bid for the bankrupt’s property was $17,000; that “your petitioner succeeded in getting for the same the sum of $34,000, after working at the same for over three months.” There was neither proof nor allegation of any contract to pay on the part of the trustee, or any application to the referee for allowance for prospective service. • In the absence of such contract or allowance, was the court in error in sustaining the refusal of the referee to allow fees? Clearly not. No legal liability existed, and, while it may be that under the facts here disclosed the referee might have allowed compensation, such allowance would be an exercise of discretionary power, and not an enforcement of legal rights. Indeed, the counsel for’the appellant conceded at the argument in this court that the allowance of this claim by the court and referee was discretionary. Such being the case, and although there may be merit in the appellant’s contention, we are strongly averse, unless it clearly appears wrong was done, to reversing a ruling concurred in by both referee and District Judge in an administrative matter. If abuses threaten to creep into bankrupt procedure, those charged with local administration are in better position to prevent such abuses than are appellate tribunals. It follows, therefore, that in such matters the court’s action should not be reversed, unless unmistakably wrong.
Now in this case the appellant had no one but himself to blame if he is not paid for services he rendered. In common with a large number of brokers in the city, he received from the trustee a circular
“Q. What arrangements did you make with Mr. Gold, if any, with reference to this commission? A. I am not sure that anything was said about commission, but the first talk I told him we could and would not agree to pay him any commission — we could and would not pay any commission, but he would have to present a petition to the court; and I said, ‘In the event, if you would get a commission, what commission would you want?’ and he said, ‘Two per cent.’ We never made any agreement to pay him 2 per cent, or any amount, and I admit I think his efforts resulted in the sale; but I never agreed to pay him any commission, but he would present his petition here. As to whether he was to bo paid, it was simply that the trustee would not pay; but, if the court would allow him a commission, he would ask for 2 per cent.”
Had he made the application suggested, the lien creditors, who were entitled to the proceeds of the .sale of this real estate, would have had notice, and all dispute and uncertainty avoided. But in spite of the warning, and without making the application suggested, the broker went ahead. He was not only a volunteer, but a volunteer with warning. If under such circumstances he had a right to collect for his services, or the bankrupt court should allow them, we can well see a dangerous precedent might be set. In view of that possibility, we think it unwise to disturb the joint action of judge and referee.
The appeal is therefore dismissed.
Dissenting Opinion
(dissenting). This is not, in my judgment, a matter of discretion. The petitioner has a valid claim against the bankrupt’s estate for services performed as a duly licensed real estate broker, undertaken at the instance of the trustee, by which the estate was materially benefited; and the court was bound to recognize and allow it. After the property had been twice put up at public sale, at which $17,000 was the best bid that could be obtained, the trustee sent circular letters to a number of real estate brokers of Pitts-burg, including the petitioner, soliciting their assistance in procuring a purchaser; and after several months’ work the petitioner succeeded in interesting a responsible party and getting him to give the price which the trustee demanded, $34,000, at which the property eventually was sold to him. It was understood that the petitioner’s claim for commissions would be 2 per cent, on the amount realized, which the trustee assented to as reasonable, provided the court approved it. It is no doubt true that the trustee did not bind himself to pay that amount, and, indeed, could not, except conditionally; the approval of the court, as in every case, being essential. But subject to this condition the validity of the claim was recognized, and the court in justice was bound to ratify it. The claim was called to the attention of the referee before the sale had been finally confirmed, and it is not, therefore, as though it came in afterwards in reduction of the price at which the sale was reported. If this was a case between individual
The reasons given by the referee for rejecting the claim are far from satisfactory. He .seems mainly to rely on the policy which he has adopted, and the rule which he lias laid down in pursuance of it, by which he requires trustees to get authority in advance when the assistance of brokers is desired in making sales of real estate. No doubt the rule, as a rule, is a good one, and may properly be invoked to protect bankruptcy estates against inroads, to which they might otherwise be open. But judgment, after all, is to be exercised, and the rule is not to be applied indiscriminately to throw out claims of merit. A policy is not to be pursued as a hard and fast rule where it works injustice. It seems to be implied by the referee that, as trustees are the agents designated by the law to make sale of real estate, they are themselves to hunt up purchasers; but they are entitled to the assistance of counsel to guide them legally, and may employ an auctioneer to cry their sales without question; and why, then, may they not avail themselves in a proper case of the experience of real estate men to help dispose to advantage of the property? They certainly are not called upon to drum up bidders; and if they are not to be allowed to get such assistance, bankruptcy estates are likely to suffer, as would have been the case in this instance, rather than the opposite. Even, therefore, on the basis that the allowance of this claim is discretionary, the referee has practically refused to exercise his judgment with regard to it, disposing of it on immaterial issues, rather than a consideration of the merits.
To affirm this decree, in my judgment, would work an injustice in order to support a policy, and I therefore dissent from it.
