Branch v. American National Bank , 57 Kan. 282 ( 1896 )

Johnston, J.

This proceeding was brought to review the rulings of the District Court in the allowance made for services of an assignee and two others who assisted in the settlement of an assigned estate. In February, 1891, the Security Investment Company of Cawker City, Kansas, made an assignment for the benefit of creditors, and W. T. Branch was duly appointed assignee. On March 9, 1892, the assignee filed his first annual report and undertook to give an account of his trust up to and including February 8, 1892. When the report came on for hearing, the Court determined that an additional notice should be given in the official paper of the County, and the hearing was •continued for that purpose. A number of the creditors appeared and objected to certain items of the report, alleging that some of the claims were extravagant and the expenses unnecessary and wasteful. Upon motion of the creditors the assignee was required to make his report more definite and certain in respect to certain items in the expense account, one of which was for salaries and attorney’s fees, $11,560.64. When the claim for salaries and attorneys’ fees was itemized, it developed that it was made up in part of the salary of the assignee for one year at $250 per month — $3,000; to V. H. Branch, who was called general assistant, one year at $175 per month — $2,100; and the charge in favor of D. M. Thorp for attorney’s fees and expenses was $4,689.02. An extended inquiry was made, and, after much testimony and argument were submitted, the Court found that $200 per month was reasonable compensation for the assignee, and a reduction of $600 from the charge, made in his accounts for the year was ordered. It was found that $125 per month was fair compensation for the services of V. H. Branch, and a reduction of $600 in the charges made in the accounts in his behalf was ordered. It was further found that reasonable and fair compensation for the services performed by D. M. Thorp, attorney on behalf of the estate, for the year, was from $2,000 to $2,500, and that a reasonable allowance, including expenses and hotel bills, was $2,689, making a reduction in the bill of Thorp in the sum of $2,000. An item of $6.25 for proxies was found to have been erroneously charged to the estate, but all other items charged in the accounts of the assignee were approved. As a conclusion of law it was found that the amount charged in the accounts of the assignee should be allowed as reported, less the sum of $3,206.25.

1. Compensation of asignee allowed by court not disturbed, unless-. Several objections are made to the rulings and the final decision of the Court. It was the duty of the Court, whether objections were made by the creditors or not, to supervise the management of the estate and to examine the accounts of the trust. The statute requires that the assignee shall annually exhibit upon oath a statement of the accounts of the trust, with proper vouchers, to the District Court. It is the province of the Court to require the giving of such notices of the hearing thereon as the circumstances of the case seem to require. ¶ ¶ 357, 359, Gen. Stat. 18S9. The objecting creditors were entitled to be heard, and the assignee has no cause to complain that he was required to give an additional notice of the hearing upon his accounts, nor of the order requiring him to itemize several of the charges in his report.

2. Security for costs by objecting creditors. An objection is made that the Court refused to require the objecting creditors to give security for costs, but it has recently been held that such refusal is not reversible error. Caldwell v. Matthewson, ante, p. 258.

3. Evidence justified allowance made. The assignee acts under the direction of the District Court, and the allowances for salaries and attorneys’ fees are largely within the discretion of the Court. ¶387, Gen. Stat. 1889. The assignee is entitled to reasonable compensation for the services performed and the responsibilities assumed, but he cannot be permitted arbitrarily to fix his own compensation or that of those who assist him. It is to be ascertained and awarded by the Court upon the rendering of his accounts; and, from an examination of the testimony in the record, we cannot say that injustice was done in the allowances that were made. Aside from the testimony in the case a large part of the services of the assignee, V. H. Branch, and D. M. Thorp, were performed under the eye of the Court and in the courts of the counties over which the District Judge presided. The Judge was, therefore, much better qualified to weigh the testimony and to determine what is reasonable compensation than we are, but a mere reading of the testimony leads us to the conclusion that fair compensation was awarded.

The fact that the Assignee obtained the approval of the Court of some charges shortly after the assignment was made does not prevent a re-examination of the accounts for the entire year, nor conclude the creditors or the Court as to the amount of the allowances to be made. It appears that the approval of the Court to these charges was obtained from the Judge at chambers, without notice to the creditors and upon ex parte hearings. Such orders can have little binding force, but in any event they .do not deprive the Court of the right and power to make an equitable adjustment and a proper allowance for the services of the complaining parties for the entire year. The objections to the testimony are deemed to be immaterial, and none of the errors assigned can be sustained.

The judgment of the District Court will be affirmed.

All the Justices concurring.