97 F. 547 | D. Minnesota | 1899
In this case the principal assets of the bankrupts consisted of a large and valuable flouring-mill property, and other improved and income-producing real estate, in the city of Minneapolis, upon which the bankrupts had on June 1, 1893, executed a mortgage (which was duly recorded) to the Min
Amount realized (loss value of equity of redemption) from sale of the mortgaged property, and payable to the bondholders pro rata ....................................................... $131,777 82
Amount for division to general creditors...................... 12,52146
$144,302 28
And his report allows as commission to be paid to Orlando O. Merriman, as referee, $1,443.02, or 1 per cent, upon the aggregate amount applicable to dividends to the secured bondholders and to the general creditors, and from which to pay the commissions. The allowance of this commission to the referee is objected to by the Hennepin Land Company, the creditor holding the largest amount of thé said bonds, on the claim that neither the referee nor trustee is entitled to any commission on the moneys realized from the sales of the mortgaged real estate for the benefit of the bondholders, because of their mortgage lien or security, and that the commissions of the referee should only be $125.24, or 1 per cent, on the amount to be divided among the unsecured creditors. It contends, further*, that in any event the referee is not entitled to commission upon the sum of $68,696.32, being the dividend of the Hennepin Land Company as holder of bonds upon the sum of $181,-777.82 produced by the security, and which sum of $68,696.32 said Hennepin Land Company was credited upon its purchase of mortgaged real estate upon indorsing the same as payment upon its bonds, and no part of which, therefore, actually passed through the hands of the trustee in bankruptcy.
The hearing on the applications above mentioned might have been had before the referee, and all the orders aforesaid could have been made by him; and the fact that the judge, at the request of the parties, and because of the large amount involved, and the unusual character of the proceeding, consented to act in some matters where the referee might have acted, in no way affects the right of the referee to commissions. His commissions are fixed absolutely by the terms of the act, and cannot he increased, however inadequate they may appear in view of the amount of services actually performed by the referee, nor diminished in the rare cases where they may seem to afford a very generous compensation for such services. The commissions of referees are fixed by section 40 of the act, which provides that they shall have “from estates which have been administered before' them one per centum commissions on sums to be paid as dividends and commissions.” The commissions of trustees are by section 48 of the act based up
Having ascertained the scope and meaning of the word “dividend” as employed in this act, it remains to be considered whether, in the administration of an estate in bankruptcy, there may be circumstances under which payments to secured creditors of moneys coming into the hands of the trustee, and into the referee’s accounts of the estate, upon sale by the trustee, agreeably to orders of the court of bankruptcy, of the property pledged or mortgaged, —the moneys being paid to the secured creditors as the avails realized from their securities, — can or ought to be treated and regarded as “dividends.” in respect to which rights to commissions in favor of the referee and trustee attach. While the act is intended to enforce the payment of debts having priority, as well
The case of In re Slevin, 4 Dill. 131, Fed. Cas. No. 12,942, has no bearing. There the sale was made by the trustee named in the mortgage, and the assignee in bankruptcy, who would have been entitled to receive only any surplus after the payment of the mortgage debt, joined in the deed. But there was no surplus, no money whatever to be administered by the court of bankruptcy, and he was properly held entitled to no commission. Here the entire fund was obtained through the action of the court of bankruptcy, whose officers alone made the sale and administered the fund; paying the avails of the security directly to the bondholders, and entirely disregarding the trustee named in the mortgage. The mortgage was functionless in the proceeding, except as it showed the extent of the rights and equities of the bondholders which were entitled to the protection of the court. The payments to the bondholders were of their dividends or allotments of the fund produced in the court of bankruptcy through the execution of its orders by its officers upon the motion or request of the secured creditors, and the referee and trustee are entitled to commissions on such dividends. Such sale, when agreed to by all the parties, was doubtless within the equity powers of the court of bankruptcy. Ex parte Christy, 3 How. 292, 315. It enabled the mortgagees or bondholders to realize with greater speed, the avails of the security than could have been done by foreclosure under the terms of the mortgage, .and of the law under which the creditors might have acted. But there is nothing in the law which excludes the referee from commissions upon dividends to any class of creditors from a fund obtained through the action of the court alone, and the services of its officers, when such action and services have been invoked by such creditors. The commission of the referee is therefore allowed at the sum of $1,443.02, as stated in the final account filed by the trustee.