Opinion
10-28-1899
In re INSOLVENT CORPORATION.
In taxing costs for notice to creditors and stockholders of an insolvent corporation that a temporary receiver had been appointed, the clerk taxed costs at 5 cents per folio of the order appointing such receiver, and for mailing same 40 cents per copy. The order was printed on postal cards, and mailed to creditors and stockholders. The permanent receiver moved to strike out these items and retax costs. Motion granted, and taxation by the clerk overruled.
PITNEY, V. C.In this case a bill was riled to wind up an insolvent corporation. An order appointing a temporary receiver was made, and it provided that the creditors and stockholders of the company show cause, on a day named, why the temporary receiver should not be appointed permanent receiver; and the order further provided that within five days a copy of the order should be mailed to each creditor and stockholder of the company whose address could be ascertained. On the return day of the order the court refused to continue the appointment of the temporary receiver, and appointed a permanent receiver to wind up the company, who has since distributed a portion of its assets. Immediately after the appointment of the permanent receiver the question of compensation for the temporary receiver and his counsel, who were the solicitors of the complainant, was brought before the court, and it was ordered that there be allowed to the temporary receiver the sum of $1,000, in full for his compensation as such temporary receiver, and in full of the compensation of his counsel in New Jersey and in New York, to be paid by him. Allowance was also made to the other counsel who appeared in opposition to the continuance of the temporary receiver. The solicitors and counsel thus provided for took no further part in the conduct of the proceedings, the permanent receiver acting as his own solicitor and counsel. Upon the winding up of the affair an order was made that the receiver pay the taxed costs of the solicitor of the complainant in the bill. These costs were at first taxed at 570.50, but the solicitor declined to receive that amount, and upon application to the clerk he made a further taxation of costs, which is composed mainly of two items, as follows: "Copies of order appointing temporary receiver, $276.30; serving copies of order, $245.60." Upon inquiry of the taxing clerk, he states that he allowed the solicitors for 614 copies, at 5 cents per folio, of the order which was mailed to the creditors and stockholders, amounting to $276.30, and for mailing the same 40 cents for each copy, amounting to $245.00; and he justifies the allowance under this clause in the chancery fee bill: "For drawing notice of every motion, copy and service, forty cents." The receiver moves to strike out those items, and with them all the cost of making the additional taxation, which items amount to about $3. The question raised is of much importance, as the mode of giving notice to creditors and stockholders of Insolvent corporations adopted in this case is the one usually adopted by the court, and many thousands of notices are sent through the mail each year by order of the court. This is the first time, so far as brought to the knowledge of the court, that such a taxation has ever been made. The expense and labor of executing an order of that kind has always been taken into account in fixing the compensation allowed to the counsel and the receiver. The notices mailed in this case were, as usual, printed on the back of postal cards, and the original cost of the postal cards and the cost of the printing were proper items of expense to be allowed either to the solicitor or receiver, whichever incurred it. Usually it is paid by the receiver, if he has any funds to do so. It is clearly not within the letter of the above-quoted provision of the fee bill, and, in my judgment, is not within the spirit of that provision. The cost of preparing printed copies of such an order and of mailing the same, and the labor connected therewith, bears no kind of proportion to the fees allowed for drawing and serving a notice of a motion in the cause, and tends to seriously increase the cost of winding up a corporation, as it is the practice of the court to order notices to be sent by mail to creditors and stockholders of every important order and direction given by the court in each suit of that character. In the case in hand the receiver was directed on several occasions to mail notices of this character to a great number of parties, and, if allowed compensation for that on the basis of the taxation allowed in this instance, his fees would amount to several thousand dollars. I think the receiver's motion must prevail, and the taxation of the clerk be overruled.