Court Opinion

ID: 8775313
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:59:38.113685+00
Date Added: 2024-06-11T17:02:30.752240
License: Public Domain

ARCHBALD, District Judge
(dissenting). This is not, in my judgment, a matter of discretion. The petitioner has a valid claim against the bankrupt’s estate for services performed as a duly licensed real estate broker, undertaken at the instance of the trustee, by which the estate was materially benefited; and the court was bound to recognize and allow it. After the property had been twice put up at public sale, at which $17,000 was the best bid that could be obtained, the trustee sent circular letters to a number of real estate brokers of Pitts-burg, including the petitioner, soliciting their assistance in procuring a purchaser; and after several months’ work the petitioner succeeded in interesting a responsible party and getting him to give the price which the trustee demanded, $34,000, at which the property eventually was sold to him. It was understood that the petitioner’s claim for commissions would be 2 per cent, on the amount realized, which the trustee assented to as reasonable, provided the court approved it. It is no doubt true that the trustee did not bind himself to pay that amount, and, indeed, could not, except conditionally; the approval of the court, as in every case, being essential. But subject to this condition the validity of the claim was recognized, and the court in justice was bound to ratify it. The claim was called to the attention of the referee before the sale had been finally confirmed, and it is not, therefore, as though it came in afterwards in reduction of the price at which the sale was reported. If this was a case between individual *214parties, there would be no question as to liability; and the bankruptcy court ought to be as ready and as much bound to recognize its obligations as an individual. The petitioner was not a volunteer. He acted by direct solicitation, the trustee seeking to avail itself of the facilities of the brokerage business in which he was engaged; and his efforts were most successful, the price obtained through his action being double that which had been bid at public sale, $17,000 additional — a very material advance — being secured by means of them.
The reasons given by the referee for rejecting the claim are far from satisfactory. He .seems mainly to rely on the policy which he has adopted, and the rule which he lias laid down in pursuance of it, by which he requires trustees to get authority in advance when the assistance of brokers is desired in making sales of real estate. No doubt the rule, as a rule, is a good one, and may properly be invoked to protect bankruptcy estates against inroads, to which they might otherwise be open. But judgment, after all, is to be exercised, and the rule is not to be applied indiscriminately to throw out claims of merit. A policy is not to be pursued as a hard and fast rule where it works injustice. It seems to be implied by the referee that, as trustees are the agents designated by the law to make sale of real estate, they are themselves to hunt up purchasers; but they are entitled to the assistance of counsel to guide them legally, and may employ an auctioneer to cry their sales without question; and why, then, may they not avail themselves in a proper case of the experience of real estate men to help dispose to advantage of the property? They certainly are not called upon to drum up bidders; and if they are not to be allowed to get such assistance, bankruptcy estates are likely to suffer, as would have been the case in this instance, rather than the opposite. Even, therefore, on the basis that the allowance of this claim is discretionary, the referee has practically refused to exercise his judgment with regard to it, disposing of it on immaterial issues, rather than a consideration of the merits.
To affirm this decree, in my judgment, would work an injustice in order to support a policy, and I therefore dissent from it.