In re the Assignment of Schaller , 62 How. Pr. 40 ( 1881 )

Van Brunt, J.

— The irregularity in the proceedings of the assignee in reference to the accounting makes it impossible to confirm the referee’s report.

There is no affidavit of service of the notice to creditors to produce them claims before the assignee, as prescribed by the rules of this court.

Secondly. It appears affirmatively that the citation was not served upon | certain creditors who had filed claims with the assignee. It is true that the referee upon the reference has endeavored to cure this irregularity, but I find no authority in the statute authorizing the referee to usurp the powers of the court. Thes^ creditors had the right to be heard upon the application for a reference, and neither the assignee or any other person or court can deprive them of that right. It would seem, therefore, that the order of reference to take and state the accounts was entirely irregular and conferred no authority upon the referee.

It further appears from the papers which have been submitted that the citation-was served upon the creditors whom the assignee jclaims to have served by mail, and it does not appear that there was any authorization by the court that the service should be made in that way.

The referee’s report as to' the claim of Milo W. Pemher seems to mej entirely correct and should be confirmed. For these reas'ons the referee’s report cannot be confirmed, and for these, if for no other.

Note.—Application having been made by creditor Pember’s counsel for the settlement and entry of an order pursuant to .the opinion above, points were submitted on the question of costs as follows:

Ohaunaey B. Ripley, for creditor.

I. Costs should be allowed creditor Pemher of course, and a reasonable counsel fee (General Assignment Act, 1877, pamphlet with notes by Bishop, 28, sea. 26).

II. The costs asked are ordinary costs, viz.: Portydollars, i. e., twenty-five dollars before and fifteen dollars after notice, the same allowed for similar service in an action (Code Civ. Pro., see. 8240).

III. The disbursements have been proved by affidavit of creditor Pember’s attorney. '

IV. The allowance of $150 is reasonable for thirty sittings. Counsel for the assignee asks for an allowance of $250 in this very matter for his extra costs; it does not therefore lie in the mouth of assignee’s counsel to say that $150 is too much for his adversary, or $125 too much for the referee. The referee’s fees, $125, should be allowed because it has been paid as a necessary disbursement; besides, the parties stipulated not to oppose the amount; the amount is reasonable for work done; there having been between thirty and forty sittings.

V. The authorities sustain such charge: Where "the court ref erred the matter back to the same referee, directing him to report the evidence taken upon the first reference,” it is the same as if the testimony had been taken in the second reference (Roberts agt. White, 73 N. Y., 375). The referee does not forfeit his fees where he comes within the spirit of the statute or where the parties waive a technical irregularity (Cornelius agt. Barton, N. Y. Week. Dig., June 10 and, June 17, 1881, pp. 216, 217 ; First Nat. Bank agt. Tamajo, 77 N. Y., 476 ; Geib agt. Topping, 11 Week. Dig., 172 ; Waters agt. Shepherd, 14 Hun, 223). See, also, order Van Hoesbn, J., herein, In re Ashley’s costs, in which judge Van Hoesen expressly grants leave to Mr. Ashley to apply for costs.

VI. The special term decision of judge Joseph P. Daly (Matter of Cur rier, 8 Daly, 122), where the question arose on an application to take and state an account, is not necessarily in conflict with this application, for reasons: (1.) There the reference was not of the kind referred to in section 26 of the general assignment act; that is a disputed claim to which the power to award costs is limited (Matter of Currier, 8 Daly, 122). (2.) That case certainly holds that the creditor should be indemnified (Id., 123). (3.) And in this case the costs will, as a matter of fact, come out of John S. Hulin, who is the only other preferred creditor, and he is entitled to the entire fund; Hulin is the same person at whose request the matter was referred. (4.) H not payable out of the estate, the costs certainly should be paid by Hulin or the assignee personally (8 Daly, 123).

Thomas F. Wentworth, for assignee, made and submitted the following:

I. The only proper order herein to be entered under the decision and proceedings is one confirming the referee’s report.

II. The order of reference herein was made not to hear and determine, but simply to inform the mind of the court by taking the testimony and reporting the same with referee’s opinion. It was not a special proceeding as no issues were referred, but simply a reference to take testimony and return the ^ame for the use of the court.

III. The coupt could, under section 26 of the assignment act, order a reference of the issues either before a jury or a referee, and in this case the judgment of the referee would be final and the proceeding before him a trial entitling the prevailing party to costs, and the original order in this matter “tó hea/r and determine ” was annulled, and the present order entered in its sjtead simply to report to the court for the latter’s information. It was npt a litigation in a court of justice. The proceeding herein is a motion determined by the court on papers submitted. \

IV. Under the twenty-sixth section, costs and counsel fees are discretionary. There are four excellent reasons why they should not be allowed: 1st. When the assignee commenced this proceeding the release stood as a valid release bf those claims. 2d. Two of the notes proven against the .estate and rejected by the assignee, were made twenty-six days after the ■assignment, and it was not until this proceeding was inaugurated and ■during its progress, and by means of its record, that Pember changed •the character of his claim against the estate from one on these two promissory notes to one for goods sold and delivered, and this too when, 3d, he had already! taken judgment in the marine court on those two notes two months before the assignee made this motion, and thus giving presumptive notice at least that he did not propose two months after the judgment in marine court to turn around a third time and conclude to collect his claim as for goods sold and delivered.

V. The assignee should not be charged with Pember’s laches who neglects to set his release aside until after the motion in this matter, and then too without any notice to assignee.

When I read over the above, on second thought, it seems that Pember had no claim when this motion was made, and that he has done only what he was obliged to do, namely, come in and establish his claims, and he does so, if I understand the view probably taken by the special term, by proceedings since the assignee’s motion. Why should the estate pay Pember for doing that without which he never could have had a claim against it ? It is equivalent to being compelled to board a man for nothing, and also to pay him for his company in addition. I don’t think he ought to have a penny for establishing his claim (disbursements of costs).

Whereupon judge Van Bbunt directed the entry of an order as follows:

Ordered, that, the referee’s report as to the claim of Milo W. Pember be and the same is hereby -confirmed in all respects, and the said motion granted with the same costs and disbursements as are allowed to a successful plaintiff in an action by the Code of Procedure, with five per cent allowance upon the amount reported due said Pember; said costs and disbursements to be taxed by-the clerk upon two days’ notice to assignee, and with ten dollars costs of this motion to be paid by the assignee out of ithe.assigned -estate .to theiattorney for said Milo W. Pember, creditor.

And the costs were thereupon taxed and readjusted, on notice, as follows: Costs before notice of trial, twenty-five dollars; costs after notice of trial, fifteen dollars; trial fee, issue of fact, thirty dollars; allowance by court, five per cent on §1,227.38, amount allowed with interest, sixty-one dollars and thirty-six cents; motion costs allowed by court, ten dollars; trial occupied more than two days, ten dollars.

The disbursements were as follows: Referee’s fees paid C. B. Pentz, §125; clerk’s fees on entering judgment, fifty cents; affidavits and acknowledgments, ten, one dollar and twenty-five cents; satisfaction piece, thirty-eight cents; transcript and filing, eighteen cents; certified copies judgments, twenty-nine dollars and sixty-three cents; certified copies, orders, six, sixty cents; postage, sixty cents; stenographer’s fees, nine dollars and fifty-cenls; sheriffs fees on execution, seventy-two cents; attendance of following witness, Gk Zerwick, two days, one dollar; total amount of costs and disbursements, $320.72.