Case Name: MATTER OF HULBERT
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1882-06
Citations: 10 Abb. N. Cas. 452
Docket Number: 
Parties: MATTER OF HULBERT.
Judges: 
Reporter: Abbott's New Cases
Volume: 10
Pages: 452–458

Head Matter:
MATTER OF HULBERT.
[Modifying 10 Abb. N. C. 284, which reversed 9 Id. 132.]
N. Y. Court of Appeals;
June, 1882.
Assignment fob Benefit of Obeditobs. —Fees of Assignee in Oases of Composition.—Allowance to Assignee’s Counsel.— Counsel Fees on Accounting.
An assignee for benefit of creditors took possession of the assigned estate, and bad converted part of it into cash, when the insolvent effected a composition with his creditors. Held, that the assignee was entitled, upon his accounting, to commissions, which should be computed upon the amount of money which came into his hands, and not upon the value of the entire assigned estate.
The rules for computing the commissions of sheriffs, executors, administrators and trustees upon the whole property coming into their hands, does not apply to assignees for benefit of creditors.
It seems that an assignee may protect himself from loss of commissions occasioned by a composition with creditors before conversion of the assigned estate, by an agreement with the assignor, be fore he accepts the assignment, as to the amount of his compensation in that event, such agreement being valid as between assignor and assignee.
It seems, also that when the assignee has received no money upon which his commissions can be computed, the case is unprovided for by statute, and the court may, before compelling a re-assignment, as a condition thereto, order a suitable and reasonable compensation to be made to the assignee.
A decision allowing a certain sum to counsel for an assignee for services prior to the accounting, will not, where it is sustained by some evidence, although slight, be disturbed on appeal to the court of appeals.
Appeal by Milan Hulbert and William A. Hulbert, from an order of the general term, of the court of common pleas in and for the city of New York, modifying a decree entered upon the accounting of Adrian Van Sinderen as their assignee for benefit of creditors. [Reported below, 10 Abb. N. Q. 284, and 9 Id. 132.]
Further facts sufficiently appear from the opinion.
A. W. Kent and Samuel Hand, for assignors,, appellants.
John L. Sutherland, for assignee, respondent.

Opinion:
Earl, J.
On October 28., 1880, Milan Hulbert and William A. Hulbert, the appellants, who were doing business as a firm in the city of New York, having become financially embarrassed, made a general assignment for the benefit of their creditors to the respondent, Adrian Van Sinderin. The assignee took formal possession of the assigned property, which consisted of merchandise and book accounts. The property remained in the store of the assignors in charge of their former book-keeper, who was selected by the assignee .as his representative. The assignors and the person thus placed in charge sold goods and made collections to the amount of $45,374.53, which sum was paid to and received by the assignee.
Thereafter, before the close of January, 1881, all the creditors of the assignors executed a composition deed, by which they agreed to accept the notes of the assignors for sixty per cent, of their claims, and release the assignors and their estate, as well as the assignee and his sureties, from all liability to them. The composition was brought about solely by the efforts of the assignors, and the assignee did not personally sell any of the property or collect any of the debts. In March, 1881, an order was made by one of the judges of the New York common pleas, appointing a referee to take and state the account of the assignee. A hearing was had before the referee, and he found the actual value of the property assigned to be $232,941.08, and he determined that the assignee'was entitled to five percent, for his commissions on that sum, amounting to $11,647.05, and he allowed to the counsel of the-assignee for his services before the accounting, $2,000, and for his services upon the accounting another sum of $2,000.
The general term of the common pleas confirmed the decision of the referee as to these items, except as to the counsel fee, upon the accounting, and referred that back to the referee for a further hearing as to the value of the services of the counsel upon the accounting. From the decision of the general term the assignors have brought this appeal, and here complain mainly of the amount allowed for commissions. ' They claim that the commissions should have been computed only on the sum of money which came into the hands of the assignee, while he claims that his commissions were properly computed upon the value of all the property which was assigned to him.
Section 26 .of the General Assignment Act of 1877, as amended by section 7 of chapter 318 of the Laws of 1878, provides that "the assignee shall receive for his services a commission of five per centum on the whole sum which will have come into his hands," and the matter now to be decided is what was meant by this language. If it had been stated in the section that the commission was to be five per centum on the entire value of the property or amount of property, or sum of money, it would have been plain enough. The words " the whole sum" are entirely inappropriate to express the entire amount of property, but they are appropriate to express the whole sum of money which may have come into the hands of the assignee, and we think they were used in that sense. The rate of commission is a large fixed sum, larger than is allowed in other analogous cases, such as sheriffs, executors, administrators and trustees. The statute contemplates the possibility of such a composition as was made in this case and provides for the discharge of the assignee when it is made. Thus it may turn out that the assignee may be discharged from all liability before he has done anything except to execute his bond and take the formal possession of the assigned property, and if the legislature had intended in such a case that the commission should be computed upon the value of all the property assigned, more appropriate language would, we think, have been used. In most cases where compositions are effected by the assignors, the commission of five per cent, on the whole property assigned would be greatly disproportionate to the value of the services rendered by the assignee, and we think the legislature, in fixing the rate of commission, had in mind only the money which should come into the hands of the assignee.
It may be said that this construction will deprive the assignee of any compensation in case a composition is made by the assignor before the assignee has converted any of the assigned property into cash. Such cases, however, will not be common, and the assignee can always protect himself by an agreement with the assignor before he accepts the assignment, as to the amount of his compensation in case of a composition. Such an agreement would be valid as between the as signor and assignee, while it would be invalid so far as it affected the interests of creditors. When one voluntarily consents to act as assignee, he must either take what the law gives him, or, where the rights of creditors are not concerned, what the assignor agrees to give him. And it may be said further, that when the assignee has received no money upon which his commissions can be computed, the case is not provided for by the statute, and the court may, .before it will compel him, after a composition, to return the assigned property to the assignor, order a suitable and reasonable compensation to be made to him as a condition of such return.
We do not intend by this construction to alter or affect the rules which have been laid down for computing the fees or commissions of sheriffs, executors, administrators and trustees. ' A sheriff is not a volunteer. He discharges a duty imposed upon him by law, and his fees are not large ; and the commissions of executors and trustees are not large, and would not be excessive in most cases, if computed upon the whole property which has come into their hands, and which in the end they may distribute or dispose of as money. Our construction of the act now under consideration is confined to the language used, and the consideration of what we conceive to have been the purpose of the legislature.
Much reliance is placed by the assignee upon the case of Bunch, 12 Wend. 280. In that case an attachment was issued at the instance of one Mitchell against Bunch, a non-resident debtor, and trustees were appointed, and the trustees caused Bunch to be brought before the officer who issued the warrant of attachment; and while the proceeding was pending, Bunch compromised with Mitchell and gave him a bill of exchange for upwards of $19,000, in consideration whereof Mitchell gave him a general release and discharge from all liability. In that case the statute provided that the 1 trustees should receive a commission of five per cent, on the " whole sum which shall come into their hands," and the court held that the trustees were entitled to their commissions on the whole amount of the bill of exchange, although it did not come into their hands. The bill of exchange was received by the creditor as so much money, and that was the sum realized by the proceeding which was instituted. Savage, Ch. J., writing the opinion of the court, said: "The meaning of the act is that the trustees shall receive a commission upon such sum as shall be realized in consequence of the proceedings instituted, and can there be a doubt but that the attaching creditor received upwards of $19,000. in consequence of these proceedings ?" It is thus seen that that case is entirely unlike this. Here nothing was realized by the efforts of the assignee, and in no sense was the property assigned to him converted into cash or disposed of by Mm as cash, except as to sales and collections actually made.
Our recent decision in the matter of the Woven' Tape Skirt Co. (85 N. Y. 506), furnishes some support to the conclusion we have reached.
Commissions have sometimes been allowed on the whole amount of property which has come into the hands of a trustee, as an equitable mode of adjusting his compensation; but constructive commissions, that is, commissions on property not converted into cash, may, upon an equitable accounting, be refused to a trustee, where their allowance would be inequitable and unjust. Here the commissions claimed are so disproportionate to the value of the services rendered that their allowance cannot be justified upon any principles of equity or justice. The rule which gives the assignee his commissions upon the money which actually came into his hands will, in this case, measure the compensation more accurately and justly than any other which could be adopted.
As to the $2,000 allowed to the assignee for the services of his counsel prior to the accounting, there was but a very meager case upon which to base such an allowance. The assignee was an attorney and counselor-at-law. The printed record does not disclose that there was any litigation or dispute about anything connected with the assigned estate. It is not revealed how the services of an attorney came to be needed, or what particular services he rendered for which a compensation of $2,000 could be claimed, but as there was some evidence to sustain the charge, and the court below was satisfied with it, we will not disturb it.
As to the charge of $2,000 for'services of counsel upon the accounting, where there was no dispute, contest or litigation, we think the court below did well to refer that item back for further investigation.
Our conclusion therefore is, that the judgment of the court below should be modified by reducing the commissions allowed to $2,268.72, five per cent, on the money actually received, and as thus modified, affirmed without costs in this court to either party.
All the judges concurred except Tract, J., absent.