Case ID: pa-super_27/html/0421-01.html
Source: Caselaw Access Project
Author: {"author": "Orlady, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Krodel’s Assigned Estate
    (No. 2).
    
      Assignment for creditors — Counsel fees — Increase of fund.
    
    Where an assignor for creditors has been permitted by the assignee to continue the business at a loss, and also has been permitted after the assignment to buy up claims against the assigned estate, and has resisted all efforts to surcharge the assignee, counsel for the minority creditors by whose efforts the fund for distribution has been quadrupled through surcharges against the assignee, will be awarded compensation out of the fund notwithstanding the objection of the assignor as a creditor.
    Argued Nov. 15, 1904.
    Appeal, No. 118, Oct. T., 1904, by Emma E. Krodel, from order of C. P. Lancaster Co., sustaining exceptions to auditor’s report in re Assigned Estate of P. A. Krodel and wife.
    March 14, 1905 :
    Before Bice, P. J., Beaver, Orlady, Smith, ‘Porter, Morrison and Henderson, JJ.
    Affirmed.
    Exceptions to report of William P. Harnish, Esq., auditor.
    The facts appear by the opinion of the Superior Court.
    
      Errors assigned were in sustaining exceptions to auditor’s report.
    
      B. E. Davis, for appellants.
    
      W. C. Douglas, Jr., and W. K. Keller of Coyle Keller, with them A. C. Bruner, for appellees.
   Opinion by

Orlady, J.,

The appellant in this case is the wife of P. A. Krodel, with whom she joined in executing a general deed of assignment for the benefit of creditors. The facts are the same as in Pager’s Appeal (Krodel’s Estate No. 1), decided in an opinion filed this day. She appeals as a creditor of the assigned estate, and her objection to the distribution made by the court below is to the allowance of fees to counsel for minority creditors who excepted to the assignees’ account to test the validity of claims presented for payment, and resulted in developing the unusual state of facts recited in the appeal by the assignees. Her creditor claim is as a trustee for unnamed beneficiaries, to an amount nearly twice as large as the value of the personal property, and as an assignee of a number of claims aggregating a like proportion of amounts which were secured by her after the date of the assignment. The result of the contest instituted by these attorneys was to increase the fund for distribution from $233.14 to $1,119.85. The assignors and assignees combined to delay the settlement of the estate, and their management of it was so contrary to law that the assignees have been held liable for the whole of its appraised value. The professional services rendered in bringing to light the mismanagement of the trust under the direction of this appellant resulted in producing a substantial fund, and without such intervention, there would not have been any fund for distribution. As was said in Weed’s Estate, 163 Pa. 595, why should not the expenses incurred in achieving this result be paid out of the common fund without discrimination between the parties entitled to it ? What equity have the parties, baffled in their effort to obtain more than their share of the estate, to demand discrimination in their favor ?

Ordinarily the suitor alone should be liable for counsel fees for services directed by him or in his interest, and it is exceptional for the courts to direct that such fees should come from any other source. We are here dealing with an assigned estate in which not only the assets but the management of the trust estate are peculiarly within the control of the court, and the right of a creditor to insist upon a full disclosure by the assignee is unquestioned. When the interests of general creditors are conserved by an investigation conducted in good faith, even though the special client gains by the contest, and the court below vouches by its decree for the integrity of the conduct of counsel, as well as the propriety of the contest, a reasonable allowance for counsel fees will be sustained, particularly so as against an exceptant whose conduct created the necessity for the investigation. In this case no other creditor makes complaint and the decree is affirmed.