72 Miss. 390 | Miss. | 1894
delivered the opinion of the court.
The Perry-Mason Shoe Company, in its original cross petition, states that it ‘“submits to the jurisdiction of the chancery court in respect to all litigation and liability growing out of the bond given in this cause,” and, in its bond, obligates itself to “pay, to whomsoever the . . court shall order, the dam
The original cross petition o,f the Perry-Mason Shoe Company, “ seeking, ” in the language of the chancellor in the final decree, ‘' to rescind the sale of certain goods, and replevy the same,” is the one dismissed, not the amended cross petition asking the fixing of a lien and personal decree against W. E. Howard for $1,055.45 worth of goods alleged to have been sold as a “different lot of goodsfrom the lot replevied. On the return of the case into the court below, such personal decree should be entered. The case is still pending there. There was no error, in this view, in not entering the decree on the amended cross petition still pending.
On the merits the chancellor must have found, as facts, that the representations made by Howard to Perry were made not to induce the sale of goods, but to secure an extension of time on past-due indebtedness, for the payment of which Perry was then making very exigent demand — threatening suit; that the goods sold by the agent, Craddock, were sold before, and not on the faith p'f any such representations, if then made ‘ ‘ in general conversation” by Howard; and that the goods originally sold, and those sold through Craddock, were not sold in reliance upon the reports of the commercial agencies. We cannot say that these findings of fact are unwarranted. This disposes of the appeal by the Perry-Mason Shoe Company.
The appeal of Blacker, Gerstle & Co. (it is not a cross appeal) questions the correctness of the chancellor’s action in allowing the sums set out in the decree to the receiver and assignee as compensation for his services as receiver and assignee; to the receiver and assignee as attorney’s fees, and as compensation for W. E. Howard, for services as clerk.
The assignment was set aside, the debt preferred by Howard in favor of his wife being void under § 1178, code 1880, the chancellor finding that both Mr. and Mrs. Howard acted ‘' in perfect good faith. ’ ’ The bill of exceptions has been stricken from the
As to the allowance made to the receiver for Howard, we are not prepared to say it is unreasonable, in the absence of the bill of exceptions. Respecting the amount decreed to W. Gr. Sykes, as receiver, the chancellor manifestly made the allowance as a gross sum for the entire service as receiver — not as part for salary as clerk, and part as commissions; and this, as to the mode of fixing his compensation, was correct, the receivership being one “in which the receiver was at once receiver and manager of a business.” Lichtenstein v. Dial, 68 Miss., 54. As to the reasonableness of the compensation, as to amount, in the absence of a bill of exceptions, and ' ‘ in view of the facts of the case, and the duties and responsibilities of the receiver, ’ ’ we cannot say the chancellor erred in the exercise of the large discretion committed to him in such matters. Bernheim v. Brogan, 66 Miss., 184.
More difficulty is encountered in the consideration of the allowance of the attorney’s fees to the receiver and assignee. 'We concur entirely with the learned chancellor in holding that it was perfectly proper, under the circumstances of this case, for the attorneys of the receiver and assignee to accept, subsequently, employment by Mrs. Howard, the preferred creditor. The service rendered was in all respects the same“-identical throughout — with that which would have been necessary to be rendered by the attorneys, had Mrs. Howard not been in the case. “The validity of her debt went to the whole assignment, ’ ’ as correctly observed by the chancellor. High on Receivers (3d ed.), § 217; Beach on Receivers, § 263.
Leaving entirely out of view, however, the bill of exceptions, it clearly appears — especially from the statements in the ' ‘ petition for assignee and attorney’s fees,” and the “receiver’s final report” — that the amount allowed manifestly embraced, in part, fees for services in defending unsuccessfully the suits
The question is thus squarely presented, in the construction of chapter 8 of the code of 1892, where an assignment for the benefit of creditors is declared void, not for actual fraud, but by reason of failure to comply with some positive, requirement of statute law, can the assignee — regarded in the character of assignee or of receiver — be allowed fees for attorney’s services rendered in an unsuccessful defense of the assignment against cross petitioning creditors, who set aside the assignment, and secure prior liens, under § 121 of the code of 1892, such fees to be charged upon and payable out of such assigned property on which such liens have thus been fixed ?
It will serve to clear the real point under review of embarrassment to say the services of the attorneys of the assignee and receiver rendered in successfully defending the claims made by Bolton and the Perry-Mason Shoe Company in their cross petitions, whereby they sought to rescind the sales, and recover the specific goods, were services for which compensation was properly allowable, as having been rendered in litigation resulting in the preservation for all entitled to the property oí the assignor, either under the assignment or the cross petitions. These services resulted in preventing the withdrawal from the property assigned of a part of it, open alike to those protected by the assignment, if it had stood, or to those who, as successful cross petitioners, fastened leins upon it. The case of the Haydock Carriage Co. v. Pier, 78 Wis., 582, is decisive of this point. Fees were allowed the assignee’s attorneys in that
In Woodruff v. N. Y., L., E. & W. Railroad Co., 129 N. Y., p. 31, the trustee — one who had " acted the part of a trustee,” in Justice Bradley’s language — was allowed compensation for his own " time, labor, trouble, and traveling expenses, ’ ’ and his attorneys’ fees, all incurred in a successful litigation of thirteen years’ duration, resulting in the " ' creation ’ ’ and preservation of the fund. To the same effect are Daniel v. Fain, 5 Lea (Tenn.), 258, the case of a quasi bill of interpleader, filed in the preservation of the estate; Clark v. Sawyer, 151 Mass, 64, a case where the assignee made advances in good faith to pay off an insolvent’s workmen before accepting an assignment, and subsequently acting under the assignment, which was set aside, not for any fraud with which the assignee was connected, and where the court say: 'The jury were instructed that the assignment was void as against the plaintiff, and that any legal services rendered to carry out or maintain it, could not be paid for out of the estate, but that the defendant had a right to pay a reasonable sum for services, in good faith, to aid him in protecting the rights of all parties, and to enable him so to conduct the business intrusted to him that the interests of all parties affected by it should be guarded. We have no doubt the instruction was right in what it disallowed. Hastings v. Spencer, 1 Curtis, 504. With more hesitation, we are of opinion that it does not appear to have been wrong in what it authorized the jury to allow the defendant. . . The instructions to the jury, as we understand them, allowed the
In IIunker v. Bing, 9 Fed. R., 277 (cited in the fifth edition of Burrill on Assignments, in note 7, at page 666, but omitted, strangely, in the sixth edition), the court say, in a case where the assignment was declared void-for failure merely to comply (as here) with the positive requirement of statute law, to file proper “inventory and schedule,” after disallowing commissions to the assignee: 'It does not follow, however, that all remuneration should be denied to the respondent. No claim under the void assignment . . can be regarded. But for the other acts performed by the respondent, in the way of disbursements and services, which, considered independent of the assignment itself, were lawfully- rendered, and were beneficial to the general body of creditors, or which would have been necessarily incurred by the assignee in the care of the property, or in its conversion into money, compensation should be allowed. The express assignment affords the defendant no protection. He must bear all the charges and disbursements pertaining to it. . . But as it was not illegal for the debtors, by parol, to put their property into the possession of the respondent, as their factor or agent to sell it, and distribute its proceeds among their creditors, though subject to be withdrawn by the debtors at any moment, on the payment of charges, and subject to the attacks of execution creditors, or to proceedings in bankruptcy, so the respondent may be regarded as having-done what he did under an implied request to that effect, and to have acqiiired thereby an equitable lien upon the property in his possession for his necessary services and disbursements therein, which should t be respected in bankruptcy, so far as they have been necessary and beneficial to the general creditors, or such as the assignee in bankruptcy would otherwise have
But can the assignee and receiver be allowed fees for attorneys for services rendered in unsuccessfully resisting the cross petitioners who assailed the assignment as void, and had it declared void ? The services thus rendered were not in preserving the property assigned for all creditors, but in directly resisting the claims of cross petitioners in manifest hostility to their claims. To pay them out of the fund assigned, after the assignment is vacated, and the right of the cross petitioners to final payment over other creditors out of such fund has been established against the opposition of the assignee in such litigation adverse to the cross petitioners, would be to make the successful litigant pay the counsel of his adversary out of the very property the right to which was the question settled by the litigation. Manifestly, this cannot be done.
In White v. IIill, 148 Mass., 398, the property assigned was a printing press, and there were uncompleted contracts partly executed. The assignee, out of his own pocket, contributed the means to complete these contracts, for “the purchase of materials [p. 399] and the payment for labor, rent, other expenses,” and the court said: “If the assignees are entitled to receive all the proceeds of the expenditures made by Kimball, it is clear that they get not only the property belonging to White (the assignor), but also a considerable amount of the property of Kimball (the assignee). This is not just, and we think that Kimball is entitled to retain any reasonable and necessary expenditures made by him in good faith under his contract with White. ’ ’ Clearly, this case is one touching disbursements made in benefiting and preserving the property, and falls under the point first discussed in this opinion as to the attorneys’ fees in defending against the claims of Bolton and others to rescind. This was, it is to be noted, an assignment made in good faith.
In IIunt v. Weiner, 39 Ark., 70, it is expressly ruled that, " where an assignment is set aside as fraudulent by reason of
In IIunker v. Bing (a well-considered case), 9 Fed. R., 280, all " commissions ’ ’ were denied, and only those expens*es for assignee’s and attorneys’ services allowed, rendered in the clear
Section 582, code of 1892, refers alone to such compensation and expenses as are proper to be awarded as having been earned in preserving the estate in the discharge of a receiver’s ordinary duties, as does § 119. And this rule must be the same whether the assignment is void for actual fraud or for failure to comply with some positive requirement of statute law. The good faith of neither assignor nor assignee, nor of both, can avail to supply the lack of legal validity in the as
This rule, too, of allowing the assignee and receiver only such counsel fees as were for services rendered in benefiting and preserving the property assigned, is strictly in harmony with § 119 of the code of 1892, aided by § 582. The “ compensation and necessary expenses” referred to in § 582 are those earned in benefiting and preserving the trust estate for the parties ultimately entitled; and is in perfect harmony also with Grocery Co. v. Leach, 71 Miss., 959, where the counsel fees were allowed the assignee and receiver for the services of attorneys who had successfully defended the assignment. No counsel fees for such" defense would have been allowed there had the assignment been annulled, beyond Such as were rendered in preserving the estate. " Qualification of the as-signee,” preparing his “petition” and inventory,” were services of this character, anyway.
The true test, therefore, as to whether expenses incurred by an assignee and compensation claimed by him for services rendered, whether by himself or his attorneys, are to be allowed out of the estate assigned, is not whether the assignment was set aside for actual fraud of the assignor, of the assignee or of both, 'or for failure to comply with some requirement of law, statute or common, but is to be found solely in the nature and character of such expenses and such services as affecting beneficially or injuriously such estate. If such expenses and such services benefit such estate, better it, enhance it in value, preserve it for those ultimately adjudged entitled, whether under the instrument according to its terms, or against the instrument as successful cross petitioners assailing the instrument, then, in every such case, such ultimately entitled parties must take the estate charged with the payment of such expenses and
If it be said that, however true all this may be as to the ordinary assignee, it cannot be of the assignee who becomes a receiver of the court under chapter eight of the annotated code of 1892, a careful consideration of that chapter will show that the principles announced are strictly applicable to the assignee-receiver therein referred to. He does not cease to be assignee by becoming, also and additionally, the receiver of the court. His functions as receiver sippervene, but do not displace, his duties as assignee. Whether the assignment be sustained or annulled, is immaterial to him as receiver. In either case, and whether there be any contest over the assignment at all or not, as receiver he proceeds with the duties of a receiver under the orders of the court — pays taxes, insurance charges, keej>s and preserves the estate for those ultimately entitled. If the assignment be sustained, he distributes the funds realized to the
The decree on the appeal of the Perry-Mason Shoe Company is affirmed. The decree on the appeal of Blacker, Gerstle & Co. is affirmed as to the compensation awarded W. E. Howard and W. G. Sykes, receiver and assignee, and is reversed as to the allowance for attorneys’ fees in defending unsuccessfully against the cross petitions upon which the assignment was vacated, and remanded, with directions to the court below to allow the assignee and receiver a reasonable sum for attorneys’ fees in the receivership proper for services rendered in the care and preservation of the estate, and for services rendered in defending against the cross petitions of Bolton and the Perry-Mason Shoe Company, seeking to rescind the sales and withdraw specific property from the estate. The costs on this appeal to be equally divided.
Decree accordingly.