Majority
p. 131In the Matter of the Assignment of Cornelius Van Horn to Frederick W. Rebhan for the Benefit of Creditors. [Special Term.] (Decided May 17th, 1883.)
Headnote
An assignee for the benefit of creditors will not be allowed fees of counsel upon a general retainer for advising the assignee in the management of his trust; nor for litigations in which he involved himself by continuing the business of the assignor; nor for resisting applications by preferred creditors for payment before his accounting.Application to confirm a report of a referee upon an accounting by an assignee under a general assignment for the benefit of creditors.
The facts are stated in the opinion.
The greater part of the services rendered by the assignee’s counsel, for which his charges have been allowed to the amount of $1,500, are not properly chargeable against the fund. He is to be allowed for drawing the assign
p. 132
ment a reasonable fee, but none for preparing schedules ; he is not to be allowed, upon a general retainer for advising the assignee in the management of his.trust (Levy's Accounting, 1 Abb. N. C. 177 ). Most of the legal expenses incurred by the assignee were rendered necessary by difficulties arising out of his permitting the assignor virtually to continue business with the assigned stock. He cannot pay his counsel out of the fund for assisting him to watch the assignor, or to manage the business. Mor can expenses of counsel be allowed to the assignee for defending the action brought against him by the landlord of the premises occupied for such business by the assignee. lie involved himself in that litigation by his own acts. As the assignee is a lawyer, he might have, with propriety, defended himself in that litigation. Employment of counsel was not necessary in respect to the applications by preferred creditors for payment.
The report will be referred back to ascertain what is a reasonable charge for preparing the assignment. The other exceptions to the report are disallowed.
Report referred back.