Court Opinion

ID: 6992031
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:26:39.714252+00
Date Added: 2024-06-11T16:09:38.821516
License: Public Domain

Moran, J. A petition was filed in this case by Kraus, Mayer &■ Stein, who were solicitors for complainant, in a bill filed in behalf of himself as a creditor and stockholder of the Brewing Association, and in behalf of all others similarly interested, to have a receiver appointed for the assets of the association and to wind up its affairs, asking that the services of said petitioners rendered in preparing and filing the original bill and amending the same and procuring the appointment of a receiver and in substituting another person as receiver in place of the one first appointed, and enjoining proceedings against stockholders, should be paid by the receiver out of the fund in his hands, on the ground that the services so rendered inured to the benefit of the estate. The itemized bill for the services attached to the petition is as follows: “ Chicago, May 10, 1889. Estate of Chicago Brewing Association, To Beaus, Matee & Stein, Dr., Attorneys and Counselors at Law, Room 7-12, Nos. 77 and 79 Clark Street. To services in preparing and filing bill of complaint and obtaining order for appointment of receiver thereon, etc...... ..............................$350 00 To services in and about substituting present receiver for the one first appointed, and drawing order in that regard .................................. 50 00 To services in matter of enjoining proceedings against stockholders................................. 50 00 To services in preparing and filing two amendments to bill of complaint........................... 25 00 $475 00”' The matter was referred to the master to take proof, and he recommended the allowance of the bill and the payment thereof by the receiver, but on the hearing the court was of opinion that the receiver should pay only for the last two items in said bill, in all $75, and denied the prayer of the petition as to the other items of said bill, and ordered said petition dismissed except as to said sum of $75. To review this order the appeal is prosecuted, and it is strenuously urged that said Eadish, complainant in the bill, took an opportune step in filing the bill and having the receiver appointed, and by such action preserved to the estate and the interested parties a considerable amount of assets which might otherwise have been dissipated and lost, and that he therefore has an equity to have the expenses he incurred for the services of solicitors allowed from the funds of the estate. It appears from the report of the receiver that he has realized on the assets some $47,000 from real estate as well as from personal property, but it does not appear in this record how much from each. It is claimed that some 1,800 barrels of beer were prevented from becoming wasted by having the receiver appointed,at the time it was done. It is., no doubt, as counsel contends, well settled as a general doctrine in courts of equity, that where one person institutes legal proceedings for himself and others, and thereby secures a fund for the common benefit of all, an allowance will be made to him for costs and expenses necessarily incurred. 2 Daniell’s Ch. Pr. 1411; Whitsett v. City B. & Assoc., 3 Tenn. Ch. 526. The principle has been frequently enforced in behalf of complainants in creditors’ bills, where the proceedings are for the common interest, and proceed upon an implication of agency on the part of the party proceeding for the benefit of others, when they come in and avail themselves of the benefit of his acts. In such cases there are plain principles of equity underlying the allowing of such expenses; but on examination of this record, we are of opinion that such equity does not exist in favor of this complainant. It is true that the bill shows that he is a creditor, and that there are other creditors; and so far he would appear to have a common interest only with others in saving and applying the property of the corporation. But the record further shows that the capita] stock of the corporation consists of 1,000 shares of $100 each, that only 275 of the shares issued have been paid for, and that only $26,060 was paid in on capital stock. It further shows that complainant holds 599 shares of the capital stock of the company which was issued to him as collateral security for the debt due him from the' corporation. On these shares of stock complainant is liable to the general creditors of the corporation. Wheelock v. Kost et al., 77 Ill. 296; Pullman v. Upton, 96 U. S. 328. While, therefore, he had an interest to the extent of-about $17,000 in common with creditors, he had an interest to the extent of nearly $60,000 which was individual to himself, and was pressing upon him to see that the debts of the corporation were paid out of the property in its hands. It does not appear from this record that any of the creditors have been paid in full, nor what per cent has been paid on i>the debts. We infer that the unpaid stock has not been called on for contribution, and as we have said, if called on it would be liable to make up a deficiency for the payment of debts in the general assets, and in such an event complainant Kadish would, as the record stands, be the chief and practically the only person liable. Under such circumstances we do not perceive what equity he has to require his solicitors’ fees to be paid out of the funds raised from the general assets for the benefit of creditors. He was above all persons interested in husbanding those assets, for to^ the extent that he succeeded in doing so he was diminishing his personal liability to such creditors. It would appear to be in consonance with strict justice to leave him to pay his own solicitors for steps taken by them which were so manifestly for his own protection. We are therefore of opinion that the order of the court below refusing to pay said, solicitors out of the funds in the hands of the receiver was correct, and it will be affirmed. Order affirmed.