The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1899-10-20
JUDGE PURNELL'S OPINION.
EXCEPTIONS TO REPORT OE CAR
OllNA CO0PERAGF co. BANKRUPT.
Ruling i'm the District Court Which
Has Important Bearing Upon Future
Cases In Bankruptcy, Especially Eff
fecting Fees o Trustees, Corporation
Officers etc.

Announcement was made in a recent
issue of The Messenger that Judge
Thomas R. Purnell a rendered a very
important opinion in the case of The
Carolina Cooperage Company, of this
city, in bankruptcy. The following is
the opinion in full:
United States of America, Eastern
District of North C~arolina-In the
District Court.-In Bankruptcy.-In re
Carolina Cooperage Company, Bank
rupts.
This case is again before the court
upon the final report Of the referee and
settlement of costs. But two items
are excepted to; first, the allowance of
800 to the trustee in lieu of the three
per cent. commission allowed by the
statute. This exception is sustained.
Section As B, Act 1898, provides a trus-
tee shall receive as full
for his services a fee OF five dollars and
commissions not to exceed three per
cent. on the first five thousand dollars
or less and costs. Even il the statute
had not thus limited the compensation
of this officer, the United States SUI
preme court in Rule IS, Section 3, las
done so in the following language: The
compensation allowed to trustees by
the act shall be in full compensation
for the services performed by them;
but shall not include expenses neces-
sarily incurred in the performance of
their duties and allowed upon the set
Element of their accounts" This is
conclusive. Neither the referee or
judge a make an allowance in VIOLA
ton of the Statute and Rules. But 1t
is said the trustee was an agent of the
for the sale of the property OF
the bankrupt corporation. The facts
are, all the property of the bankrupt
was in the hands of the sheriff under
ar execution, issuing from a state
court, when it was under an order Of
this court taken into possession by the
marshal. On account Of the expense
incident to preserving the estate a sale
was ordered and G.. l.. Taylor, by cor
sent, appointed agent to make the sale.
After this, the same gentleman was Sc
lected as trustee n made the sale af-
ter such selection. The only service
performed before such selection was to
take possession of the property and ad-
VertiSe it. These are services the
Bankruptcy Act contemplates the trus-
tee shall perform, and when the sale
was actually made he was trustee. The
referee proposes to amend his report
by allowing the three per cent. COM
mission and then a special allowance as
agent to make this sale. This would
be an evasion the court cannot cOun-
tenance-it is not contemplated in the
law. Allowances are in the sound jul
dicial discretion of the court. Suppose
the sale was made as agent Of the
court as c~ontended, then all the SER
vices performed by the trustee were
to receive and hold the proceeds Of
sale, and his maximum commissions
are not to exceed three per cent, the
minimum commissions Would be allow
ed.s Both agent and trustee being the
same, the three per cent. is ample COM
p~enSation for all the services perform
ed and the only compensation allowed
under the act. AS before said in re
Woodland, 95, F. r. 956: "One of the
purposes Of the Act of 1888 in eStab-
fishing a uniform system of bankrupt
cy vas to avoid What was the principal
cause Of the repeal of the bankruptcy
Act Of 1867, excessive fees and great
expense. This being so, the law should
be administered at the minimum cost
consistent with efficient service" This
being the manifest intention of con-
gress it is encumbent on the bankrupt
cy court and it's officers to SO admins
ter the law. To do otherwise, is to
violate the laW. Parties hould not ac-
cept office under the Bankruptcy Act
in ignorance of the fees allowed by
law, and when they inadvertently do 50
and are dissatisfied with the fees al
lowed, they can relieve themselves of
the burden without the nominal ex-
pense of a postage stamp by a few
lines r~eSigning the trust, sent under a
frank as official business. Vacancies
can always be filled without much de-
lay. The trustee yill be allowed the
three per cent. commissions as provided
in Section 4S, Rule 30. and no more.
The second exception is to item four
as to debts having priority and to be
paid in full, as follows: A. H. Slo-
cumb'S salary as president Of the
bankrupt corporation at a rate of $500
per annum from October q, 1898, to
January q, 1S99-$175." This exception
is sustained. No authority can be cited
for the contention hat this debt, if it
be a debt, should have priority over
claims of persons whose funds have
been swallowed up in the bankrupt
corporation, but the spirit of the law
and the decisions is against it. citation
of the refinition Of wage Garner in
Section l, subsection q, cannot aid
the claimants. This definition was in
tended for other sections of the act as
a cursory examination will show any
logical mind. But the section, and the
only section, under which it is claimed
Slocumb has a priority is Section 64 a,
which limits the priority of wages to
be paid to workmen, clerks and SER
wants, which have been earned within
three months. Slocumb was neither a
workman, clerk or a servant in the
sense in which these limiting words
are used. If congress had intended
this provision to extend to presidents
of commercial corporations it would
have said so. Presidents of such cor
porations do not generally act as
workmen, clerks or servants, but exer-
else authority over these classes, occa-
sionally arbitrary and oppressive, but
always in a way to let them know the
president is not one of them. There is
no evidence before the court hat Mr..
Slocumb was an exception to the gen.
eral rule-no evidence he did any work,
no evidence he kept the books or even
the minutes of the corporation as clerk
or acted in the capacity of servant. He
was not a servant, for he had no mas
ter over him, but was presumably SUI
preme in the body. Men who have at
tanned position, and in their OWE minds
regard themselves, as rulers, often i'll