Opinion
March, 1904.
Myer Nussbaum, for the appellant.
John Cunneen, Attorney-General, and William H. Wood, for the respondent.
Section 4 of chapter 60 of the Laws of 1902 provides as follows: "The receiver may employ not to exceed one counsel and may make such payment upon account for legal services during the progress of the receivership as shall be just and proper, but no such payment on account shall be made to any counsel except upon the approval thereof in writing by the Attorney-General, and such payments shall be subject to the order of the court in whole or in part upon the final settlement of the receiver's accounts to the same extent as the accounts of general assignees are subject to revision and allowance; but no compensation shall be allowed to an attorney for a receiver unless an agreement for his compensation has been made in writing, upon the approval of the Attorney-General. Additional counsel shall be employed only upon the written approval of the Attorney-General."
It is urged by the appellant that the approval required from the Attorney-General relates to the necessity of employing an attorney and counsel, and that if the necessity of employing an attorney and counsel is conceded, it is the duty of the Attorney-General to approve a contract of employment in which compensation is provided for generally without in any way fixing or limiting the amount thereof. We do not so read the statute. The statute expressly provides: "The receiver may employ not to exceed one counsel." There is no limitation upon such express power. The only express limitation on the employment of counsel is contained in the last sentence, namely, "Additional counsel shall be employed only upon the written approval of the Attorney-General."
The statute was not enacted for the purpose of affecting the selection by the receiver of one attorney and counsel. If the necessity of employing an attorney and counsel is conceded and an attorney and counsel is employed, except for the provisions of this statute such attorney and counsel would be entitled to reasonable compensation as a matter of law. An agreement for reasonable compensation is inferred in all ordinary contracts of employment. An approval, therefore, of the employment of an attorney and counsel in which agreement it is provided generally that he shall have compensation for his services would be an idle ceremony. The section of the statute quoted relates to the amount of compensation to be paid to the attorney and counsel of the receiver. Two things are apparently sought by its provisions: (1) To limit the payments or account for legal services during the progress of the receivership to such as are approved in writing by the Attorney-General; (2) To prohibit the allowance of compensation to an attorney "unless an agreement for his compensation has been made in writing, upon the approval of the Attorney-General."
The duties of a receiver of a corporation frequently extend over a considerable period of time, and it has been the practice to obtain orders from time to time, authorizing payments on account of legal services during the progress of the receivership. The allowance of such payments has been a frequent subject of discussion.
Whether this statute provides a way to aid the court in limiting the amount of payments on account of legal services prior to the final accounting of the receiver, or in correctly determining the aggregate amount of such compensation, is not now under consideration, but that the purpose of the act is to further restrict and control such payments and compensation cannot be doubted.
It is suggested that the statute is unconstitutional as interfering with the power of the Supreme Court. It may well be that the provision of the statute which wholly prohibits all compensation to an attorney properly and necessarily employed by the receiver, unless an agreement has been made in writing for his compensation upon the approval of the Attorney-General is an interference with the recognized power of the court. The question of the constitutionality of the statute is not necessary to the determination of this appeal and we do not pass upon it in any way. If compensation cannot be made to an attorney and counsel of a receiver unless there is an agreement in writing approving of such compensation then the Attorney-General is vested with a discretion in regard to such approval which cannot be interfered with by peremptory mandamus at least upon the facts shown in this record. If the statute is a violation of the Constitution the appellant is in no position to ask the court to compel the Attorney-General to act under such void statute.
The order should be affirmed, with ten dollars costs and disbursements.
All concurred; SMITH, J., in result.
Order affirmed, with ten dollars costs and disbursements.