Opinion
14160
November 6, 1935.
Before SEASE, J., Spartanburg, June, 1935. Affirmed subject to instructions.
Suit by C.H. Dixon, as receiver of the First National Bank of Gaffney, and others against J.N. Cudd, in which R.A. Hannon and another, as co-receivers of the estate of defendant, moved to vacate an order allowing defendant to name personal counsel. From an order granting the motion of the receivers, defendant appeals.
See also: 177 S.C. 153, 180 S.E., 873.
ORDEROn February 16, 1935, there was presented to the undersigned Judge an ex parte petition of J.N. Cudd, brought in the matter of C.H. Dixon, as receiver of the First National Bank of Gaffney, S.C. suing on behalf of himself and all other creditors of J.N. Cudd who may come in and contribute to the expenses of this action, brought in the Court of Common Pleas for Spartanburg County, S.C.
I have had no end of work in this receivership; the case in various aspects has been to the Supreme Court several times. I have for my own information had an inventory made of the estate showing all assets and liabilities, and the liabilities are considerably in excess of the assets. The assets can never bring enough to pay the debts.
Moreover, it cannot be contended that one in receivership can retard the liquidation of his estate. The showing before me is that Mr. Cudd can never realize more than his homestead exemptions; he certainly has no rights, either on behalf of himself or on behalf of his creditors, to tie up the estate; the Court will see that the rights of all are protected.
Notice was duly served on 17th of June, 1935, that motion would be made before me on this day for an order vacating and annulling the order of February 16, 1935, which said order is referred to and which order granted J.N. Cudd permission to name and appoint attorneys for J.N. Cudd, and to pay said attorneys out of the funds of the receivership proceedings. J.N. Cudd, under that order, appointed Evans, Galbraith Holcombe, of Spartanburg.
On the call of the motion, I read the petition of the petitioners, the return, and heard arguments.
It is therefore ordered that the order granted on February 16, 1935, be, and the same is annulled, vacated, and set aside; it was improvidently and improperly issued; the same is of no force and effect.
At Spartanburg, S.C. this 21st day of June, 1935.
T.S. SEASE, Judge, Seventh Judicial Circuit.
Messrs. Evans, Galbraith Holcombe, for appellant, cite: Right of insolvent to have attorney: 125 S.C. 214; 118 S.E., 303; 85 S.C. 522; 67 S.E., 737; 251 S.W., 756; 103 A., 471.
Mr. L.G. Southard, for respondents, cites: Receiver subject to supervision of Court: 53 S.C. 414; 35 C.J., 140; 15 S.C. 518.
November 6, 1935. The opinion of the Court was delivered by
On February 16, 1935, upon the verified petition of the appellant, J.N. Cudd, for whom a receiver had been appointed on December 5, 1931, an order was passed by the Circuit Court of Spartanburg County, authorizing him to employ an attorney of his own choosing to represent him in all the receivership matters; such attorney to be paid from funds brought into Court in the receivership proceedings. He chose the firm of Evans, Galbraith Holcombe, of Spartanburg, who thereupon accepted the appointment. After these attorneys had served for some months, the receivers, upon proper notice, moved to vacate the order allowing Cudd to name personal counsel. Judge Sease, who heard the matter, granted the motion holding that the order of February 16th had been improvidently and improperly issued. From the vacating order dated June 21, 1935, this appeal is taken.
The Court is satisfied that Judge Sease, for the reasons stated by him, was entirely right in his conclusion that the order of February 16th should not have been issued, and we approve his action in vacating it. The Circuit Judge finds as a matter of fact that "the assets can never bring enough to pay the debts," and that Cudd will not realize more than his homestead exemptions. In these circumstances, Cudd has nothing to complain of and will not be permitted to interfere with the orderly administration of the estate.
While we approve the vacation of the order, we are constrained to hold, however, as a matter of justice, that the attorneys who were chosen by Cudd and acted for him in good faith under the Court's order until it was vacated, should be compensated for any services they may have rendered in the receivership matters between February 16 and June 21, 1935, and the case is remanded with instructions that the Circuit Judge determine and fix whatever compensation he may find they are entitled to under a proper showing before him, and that he direct such compensation allowed by him, if any, to be paid these attorneys by the receivers out of the funds of the estate in their hands.
Subject to these instructions, the vacating order appealed from, which will be reported, is affirmed.
MESSRS. JUSTICES CARTER, BONHAM, BAKER and FISHBURNE concur.