In re the Estate of Matthewson — 19 N.Y. St. Rep. 210

Majority

p. 210

In the Matter of the Estate of John Matthewson, Deceased.

(Surrogate's Court, New York County,

Filed November 30, 1888.)

Headnote

•CotnssEt. ebbs—When aeeowed to eeeeholdek.

Although, under Code, a freeholder in a proceeding for the benefit of creditors may be allowed a sum deemed by the surrogate to be reasonable for the necessary services of his counsel, an allowance which exhausts the fund and defeats the very object of the proceedings will not be deemed “reasonable.”

Olin, Rives & Montgomery, for petitioning creditor.

The Code provides that the freeholder may be allowed a sum deemed by the surrogate to be reasonable for the necessary services of his counsel. An allowance which exhausts the fund and defeats the very object of the proceeding can hai-dly merit the term “reasonable.” The fees of the freeholder are fixed by statute and cannot be diminished by the surrogate; the only direction in which reduction is possible is in respect of the sum. allowed for the services of his counsel.

In this proceeding counsel were aware of the amount of labor that would be involved, and should not now complain that their compensation is insufficient;- they were also aware of the amount of property applicable to the payment of debts. While, therefore, the amount of recovery is not a test of the value of the services of counsel, certainly, when the proceeding is virtually ex parte, and the amount of recovery possible is limited by very narrow bouxxds, the attorneys should not be disappointed if the amount of benefit accruing is regarded as, in some degree, a proper measure of compensatioxi. To adjust the allowance in the manner claimed would exhaust the estate, and produce a result that should be avoided if possible, viz., a proceeding for the benefit of creditors in which tlxey are successful,

p. 211

and yet are injured, for the cost of procuring the decree would equal or exceed the amount realized, and. an asset be annihilated which might be otherwise applied in the payment of debts.

The suggestion is also pertinent- that experienced counsel might have forseen that the result of this proceeding would be worse than futile, and that circumstances might exist which would call for a condemnation of their action in advising the course adopted. This is especially true when, as in this case, the attorneys for the petitioning creditor acted as the counsel for the freeholder, and only make this application after having unsuccessfully applied for an allowance in the capacity of attorneys for the petitioner. These views are stated for the purpose of illuminating the path by which the conclusion sought is reached, viz., the definition of the word “reasonable” as applied to the peculiar circumstances of this case.

The sum of seventy-five dollars is allowed for the services of counsel to the freeholder.