Gold v. South Side Trust Co.

BUFFINGTON, Circuit Judge.

This is an appeal by Jacob Gold from an order of the bankrupt court confirming a report of á referee which rejected a claim of said Gold. The case arose on a certified question, viz.:

“Whether, under the facts set forth in the petition of Jacob Gold, and the testimony and evidence thereunder, the petitioner is entitled to have- allowed him the sum of $680 as commission on the sale of certain real estate.”

The petition of Gold set forth that he was a licensed real estate broker; that the highest price bid for the bankrupt’s property was $17,000; that “your petitioner succeeded in getting for the same the sum of $34,000, after working at the same for over three months.” There was neither proof nor allegation of any contract to pay on the part of the trustee, or any application to the referee for allowance for prospective service. • In the absence of such contract or allowance, was the court in error in sustaining the refusal of the referee to allow fees? Clearly not. No legal liability existed, and, while it may be that under the facts here disclosed the referee might have allowed compensation, such allowance would be an exercise of discretionary power, and not an enforcement of legal rights. Indeed, the counsel for’the appellant conceded at the argument in this court that the allowance of this claim by the court and referee was discretionary. Such being the case, and although there may be merit in the appellant’s contention, we are strongly averse, unless it clearly appears wrong was done, to reversing a ruling concurred in by both referee and District Judge in an administrative matter. If abuses threaten to creep into bankrupt procedure, those charged with local administration are in better position to prevent such abuses than are appellate tribunals. It follows, therefore, that in such matters the court’s action should not be reversed, unless unmistakably wrong.

Now in this case the appellant had no one but himself to blame if he is not paid for services he rendered. In common with a large number of brokers in the city, he received from the trustee a circular letter calling attention to this property. In response thereto he met the trustee, was encouraged to sell, and a commission of 2 per cent, was talked about; but, as he testifies, the trustee did not hire him to sell, and expressly told him that he “would have to present your petition to the referee, or the court, in case you wanted any commission in the matter.” The testimony of the trustee’s officer was:

“Q. What arrangements did you make with Mr. Gold, if any, with reference to this commission? A. I am not sure that anything was said about commission, but the first talk I told him we could and would not agree to pay him any commission — we could and would not pay any commission, but he would have to present a petition to the court; and I said, ‘In the event, if you would get a commission, what commission would you want?’ and he said, ‘Two per cent.’ We never made any agreement to pay him 2 per cent, or any amount, and I admit I think his efforts resulted in the sale; but I never agreed to pay him any commission, but he would present his petition here. As to whether he was to bo paid, it was simply that the trustee would not pay; but, if the court would allow him a commission, he would ask for 2 per cent.”

Had he made the application suggested, the lien creditors, who were entitled to the proceeds of the .sale of this real estate, would have had notice, and all dispute and uncertainty avoided. But in spite of the warning, and without making the application suggested, the broker went ahead. He was not only a volunteer, but a volunteer with warning. If under such circumstances he had a right to collect for his services, or the bankrupt court should allow them, we can well see a dangerous precedent might be set. In view of that possibility, we think it unwise to disturb the joint action of judge and referee.

The appeal is therefore dismissed.