McDowell's Appeal

4 Pennyp. 384 | Pa. | 1884

the opinion of the Court was delivered by

Sterrett, J.:

There was undoubtedly great delay in disposing of the property, settling the business of the copartnership, and-filing a final account, but the receiver was not wholly to:' blame for that. At the solicitation of both partners, and with the view of better disposing of the stock on hand, he continued the business for about six months after the dissolution of the firm ; and, when he obtained an order' of court for the sale of all the property, including the patent and machinery, they interposed' and had the order so modified as to require the patent and machinery to be sold together for not less than $10,000. Pursuant to the order of sale, all the property was promptly sold, except the patent and machinery. For those articles, only a small percentage of the sum fixed by the Court, was offered and they were accordingly withdrawn. It is not even alleged that they, could have been sold then or since for anything near the amount named, and the partners made no effort to have the order so modified that a sale could be effected. It is true, the receiver himself might have applied to the court for a rescission or further modification of the order ; but, under the circumstances, it was quite as much their duty as his to make the application. Being thus prevented, by the active interference of the partners, from effecting a sale of the patent and machinery, the receiver was obliged to provide for the safe-keeping of the latter at considerable expense. It is not alleged that the amount paid for storage and insurance was unreasonable. The learned auditor substan-tially found that in disposing of the property and stock on hand, the receiver acted in good faith, under the advice of counsel, and that the parties now complaining either urged him to do what he did or acquiesced; and hence, he very properly refused to surcharge him either with the expenses of continuing the business, the amount expended for storage and insurance, or the alleged value of the machinery.

In view of the fact found by the auditor, we think there was error in refusing to allow appellant any compensation for his services as receiver. While he was clearly not entitled to the full amount claimed, it does not appear that anything was done or omitted to be done by him that should work a forfeiture of his entire claim. By far the greater part of the services for which compensation is claimed were either rendered at the instance of the partners or made necessary by their active interference. Objection to the allowance of compensation, therefore, comes with bad grace from them. Taking into consideration all the facts and circumstances, as shown by the auditor’s report, we think appellant is entitled to at least $300 for his services, and that sum is accordingly allowed.

The subject of complaint in the sixth specification of error is the surcharge of thirteen uncollected accounts amounting to $894 95, a schedule of which is appended to the auditor’s report. It was the duty of appellant to account for the property and assets that came into his hands as receiver, and if he failed to show that the accounts referred to were uncollectible or worthless, he was properly chargeable with whatever, in the exercise of reasonable diligence, he might have realized therefrom. He therefore undertook to prove that such of the accounts as were available had been collected, and on that subject he was examined by the auditor. Speaking of the accounts, a schedule of which had been furnished by the book-keeper of the firm, he testified in substance that he collected all he could; that he took the accounts to Fairthorn & Rand, a reliable collecting agency, and instructed them to collect all that were available ; that some of the accounts were refused by them as uncollectible ; and, as to those retained by them, they reported to him from time to time, collected all they could, paid over the proceeds, and he charged himself therewith in his account. There appears to have been no conflict of testimony as to these facts, and the only inference that can be fairly drawn from them is that appellant was reasonably diligent in endeavoring to collect the accounts that came into his hands.- Bnt, even if this were not so, there is nothing by which to determine the valne of the accounts with which he was surcharged. They were old accounts, some of them long past due, and for aught that appears, they were entirely worthless ; and, from the facts reported by the auditor, it may be fairly inferred that such was the fact. The evidence was insufficient to justify the surcharge complained of, and it should therefore be stricken out. The surcharge of interest complained of in the fourth specification is erroneous as to the amount thereof. The account of the receiver shows that the average annual disbursements made by him from 1872 to 1880, exceeded the interest on the fund assumed to be in his hands during that time. In computing the interest with which he should be charged, these disbursements should be taken into account. The fund on which interest is properly chargeable is still further reduced by the allowance of compensation to which he was entitled when it was earned, and that also lessens the item of interest making up the surcharge; but it is unaffected by striking out the surcharge for uncollected accounts, for the reason that no interest appears to have been charged thereon. The result of these corrections in the computation of interest is a reduction of $401 68 in the amount surcharged; and, to that extent, the fourth specification of error is sustained.

There is nothing in the remaining assignments of error that requires special notice. They are not sustained.

After deducting expenses of audit, $230 75, and the sums awarded to creditors, viz: $138 88 and $341 61, the balance found by the Court to be in the hands of appellant, and which was awarded to EL S. Hagert, Esq., attorney for Thomas A. McClelland, appellee, is $2,317 43, from which should be deducted as follows:

Allowance for compensation, .... $300 00

Surcharge for uncollected accounts, . 894 95

Reduction in surcharge of interest, . 401 68

-- $1,596 63

Leaving the correct balance,........ $720 80

' Payable to H. S. Hagert, Esq., attorney for appellee, with interest from December 15, 1872, the date of the decree in the court below. Under the circumstances, the costs of appeal should be paid by appellant.

•As above modified, the .decree of the court of common pleas is affirmed and appeal dismissed at costs of appellant.