Opinion
January 10, 1908.
Robert Stewart, for the appellant.
R.J. Shadbolt [ James M. Seaman with him on the brief], for the respondents.
This is an appeal from an order of the Special Term confirming the report of a referee appointed to state the account of the appellant as receiver. The action was brought for an accounting against the defendant Elwood as the survivor of a copartnership between himself and the plaintiffs' testator, and resulted in a judgment in favor of the plaintiffs for the sum of $4,286.32, entered on the 12th day of November, 1900. The appellant was appointed receiver of the copartnership property to satisfy said judgment. It appears inferentially that after taking possession of said property he turned it back to the defendant Elwood, upon the order of the court, on Elwood's giving an undertaking to pay the amount of the judgment. The controversy between the plaintiffs and said defendant Elwood continued until January 5, 1907, when the report of a referee, to the effect that there was then due the receiver from said defendant the sum of $210.28, was confirmed. The receiver has not collected said amount. On the 23d day of April, 1907, the plaintiffs obtained an order to show cause why the appellant should not finally account and pay over the moneys in his hands. He thereupon filed his account, exceptions to it were filed, and the proceedings thereon resulted in the order appealed from. Up to the time of the commencement of the proceeding for an accounting the appellant was represented by Mr. Shadbolt, the plaintiffs' counsel. According to the account filed by the appellant he has received the sum of $7,997.67, paid out the sum of $7,603.41, and has a balance in his hands of $394.26. On the hearing before the referee the following stipulation was entered into, viz.: "Mr. Shadbolt stipulates and Mr. Cameron agrees that the only dispute between the parties is the question of the method of bookkeeping employed by the receiver in making his account. That the amounts of cash actually received are correctly stated and that the amounts of cash actually paid out are correctly stated, the only question being whether the amounts paid should be charged against the judgment or against the disbursements." The referee found that the amount unpaid on the plaintiffs' judgment, including interest to June 26, 1907, was $1,404.12, and the order appealed from directs the receiver to pay the plaintiffs' attorney said sum of $1,404.12 to satisfy the judgment; the sum of $229.56, the expenses of the reference; the sum of $300, counsel fee for attending upon the reference, and the sum of $10, costs of the motion to confirm the report of the referee. The referee must have proceeded upon the theory that it was the duty of the receiver to satisfy the judgment irrespective of the amount of moneys in his hands. The receiver has paid Mr. Shadbolt and Mr. Seaman, who are respectively counsel and attorney for the plaintiffs, the sum of $6,618.22. This would have satisfied the judgment and compensated the attorneys for their services but for the seemingly unnecessary litigation extending over a period of six years. The plaintiffs do not question the propriety of the payments to their attorneys, and the latter do not dispute the reasonableness of their charges; but for some undisclosed reason they seem to think that the appellant should pay them out of his own pocket, as well as make good the sum still uncollected of the defendant Elwood, although, if there has been any fault in failing to collect said sum the fault would seem to be theirs, for they have had entire charge of the proceedings and have certainly been paid enough to insure diligence. There being no dispute about the receipts and disbursements of the receiver, he cannot be charged with more than he has received simply because money paid to the plaintiffs' attorney and counsel has been applied by them in satisfaction of their claims for services, instead of in payment of the judgment. The correctness of his account being conceded, he he should not have been charged with the expense of a reference conducted merely to determine how much of the moneys paid to counsel had been kept by them, especially as he was not charged with any wrong in making said payments. There should be an end to this proceeding. There is no need of another reference, hence we will state the account.
The receiver credited himself with $382.86 commissions on the copartnership property; he is not entitled to charge commissions both on the property and upon the money paid to him in lieu thereof; hence that charge must be disallowed, thus leaving a balance in his hands of $777.12, with which amount he should be charged. He should be allowed his commissions and the expenses of the reference incurred by him. The order should be modified accordingly, and as modified affirmed, with costs to the appellant.
WOODWARD, JENKS, GAYNOR and RICH, JJ., concurred.
Order modified in accordance with opinion, and as thus modified affirmed, with costs to the appellant.