Bank of Genesee v. Denning
Bank of Genesee v. Denning
Opinion of the Court
The Bank of Genesee, a corporation, filed its petition in insolvency, and was, on the twenty-seventh day of November, 1895, by adjudication in the court below, declared to be insolvent. At a meeting of the creditors, John H. Gaffney, the appellant, was elected assignee of said insolvent; and he was thereafter, by order of the lower court made April 23, 1896, duly confirmed as such assignee, and required to execute an undertaking as such assignee in the sum of $5,000, which undertaking was thereafter given by said as-signee. It appears from the record that said assignee employed the respondent S. S. Denning to act as his attorney. Said respondent performed services as attorney for the said assignee in various suits. Later it appears that the respondent Warren Truitt became associated with the respondent Den-ning as attorney for said assignee. It appears that the district court and the judge thereof, at chambers, between December 16, 1896, and May 17, 1897, made numerous orders allowing attorney’s fees to the respondents for alleged services rendered to the assignee in the administration of the estate of the insolvent, the amounts varying from twenty-five dollars to $1,500, and aggregating $2,292.50, for services claimed to have been rendered within a period of six months. On June 14, 1897, the appellant, as said assignee, served on respondents, and filed in the district court in this proceeding, a notice of
It is difficult to imagine upon what theory the respondents and the honorable district judge assumed the authority to dissipate the assets of the insolvent estate by orders made by the district judge, either in court or at chambers, without notice to the assignee, and without any opportunity to the creditors to resist or protest against such unwarranted proceedings. The motion made by appellant to set aside said orders should have been sustained, on the ground that said orders were made without notice to the assignee and creditors who had appeared. The assignee and creditors of an insolvent estate which is being settled by a judicial proceeding under our statutes have some rights relative to the distribution of the assets of such insolvent estate, notwithstanding the views of the learned district judge and the respondents to the contrary. Assignees and receivers are entitled to necessary costs, including reasonable and necessary attorney’s fees, incurred in the protection of the estate which has been intrusted to them. The claim for attorney’s fees must be made through the assignee, the attorney looking to the assignee for his compensation, and is properly presented in the accounts of the assignee, and, like other items in his account, may be contested by creditors. Where it is necessary for an assignee of an insolvent estate to employ
It appears by the application for writ of review, made to this court, in this insolvency proceeding, that the district judge, at chambers, in addition to the orders allowing fees heretofore mentioned, after appeal was perfected, allowed additional fees to the amount of $750, making the total allowance of attorney’s fees to respondents, for services rendered within a period of six months, reach a grand total of $3,142.50. The last order named was, at this term of this court, annulled, for want of jurisdiction in the district judge to make such order at chambers. (See Gaffney v. Piper, ante, p. 490, 51 Pac. 99.) It is not only proper, but the duty, of the assignee in presenting his accounts, to embrace therein such amount as he and the attorney may agree upon for services rendered, as a preferred claim against the estate, such item subject to contest by any creditor. But, if the assignee and his attorney cannot agree on the amount of fee due the attorney, the assignee should fix the amount; but in either and all events the court should control the matter, and when the amount is to be changed, or a motion heard for that purpose, the court should fix a time and place to hear such motion, due notice of which should be given to the creditors who have appeared, and the matter determined in open court, where all parties interested are given an opportunity to be heard. The assignee is selected by the creditors, and it is his duty to protect their interests by protecting the insolvent estate against loss as far as he can reasonably do so.
The fourth ground upon which appellant’s motion is based is not tenable, as the accounts of the assignee, and every item
070rehearing
ON REHEARING.
This is a petition for rehearing. It appears that a motion was made in the lower court to set aside and annul certain orders made allowing compensation for legal services to the attorneys for the assignee, and to readjust and fix such compensation, and to allow a certain offset. It is contended that the opinion heretofore rendered in this case proceeds upon the theory that said motion was denied, when, as a matter of fact, it was granted, and the compensation readjusted and fixed. To ascertain whether this contention is well founded, we must refer to the order of'the court made on said motion, and the notice of appeal therefrom. The order made on the hearing of said motion states as follows': “Wherefore, the court being fully advised in the premises, both as to the law and to the facts in this case, it is hereby ordered that the motion of the assignee to annul and set aside its order of June 9, 1897, granting to S. S. Denning and Warren Truitt the sum $1,500 for professional services, be, and the same is hereby, overruled, and that said order shall stand.” It appears from that order that the motion to annul and set aside was denied. The appeal was taken from said last-mentioned order, and states that said assignee “appeals to the supreme court of the state of Idaho from the order of said court, made and entered on the nineteenth day of June, 1897, in favor of S. S. Denning and Warran Truitt, and overruling said as-signee’s motion to set aside the order made and entered on the ninth day of June, 1897.” Thus, it is shown that the court entered an order denying appellant’s motion to set aside certain orders, and that the appeal was taken from that order.
Reference
- Full Case Name
- In re BANK OF GENESEE v. DENNING
- Status
- Published
- Syllabus
- Insolvency — Attorney’s Pees — To Whom Allowed by the Court.— Costs incurred by the assignee of an insolvent estate in proceedings in insolvency, for reasonable and necessary attorney’s fees incurred in protecting the insolvent estate, should be allowed to the ■assignee, on his application, and not to the attorney. Assignee — District Judge — Creditors.—Orders allowing attorney’s fees for services rendered the assignee of an insolvent debtor, which are made upon ex parte .application of the attorney by the district judge, either in open court or at chambers, are in violation of the rights of the creditors, and unauthorized. Jurisdiction of Judge at Chambers in Insolvency Proceedings.— A district judge has no jurisdiction at chambers to make an order allowing or fixing the compensation of an attorney for an assignee of an insolvent debtor whose estate is being settled by proceedings in insolvency. (Syllabus by the court.)