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In re Assignment for Benefit of Creditors of Munson-Lied Co.

Decided: June 26, 1961.

IN THE MATTER OF THE ASSIGNMENT FOR THE BENEFIT OF CREDITORS OF MUNSON-LIED COMPANY, A CORPORATION OF NEW JERSEY, ASSIGNOR, TO ALLAN L. TUMARKIN, ASSIGNEE. ALLAN L. TUMARKIN, APPELLANT,
v.
UNITED STATES OF AMERICA, RESPONDENT



Conford, Freund and Kilkenny. The opinion of the court was delivered by Freund, J.A.D.

Freund

This appeal by Allan L. Tumarkin, assignee for the benefit of creditors of Munson-Lied Company, challenges the sufficiency of commissions and allowances awarded to him in his respective capacities as assignee and attorney pro se. The United States (Director of Internal Revenue), a priority creditor of the estate in the amount of $3,432.06, seeks a vacation of the trial proceedings for lack of jurisdiction or, in the alternative, affirmance of the award of the County Court, Probate Division.

The assignor corporation, previously engaged in both a sheet metal business and the sale of oil and kerosene products, executed a deed of assignment to Tumarkin on April 21,

1958. On May 2, pursuant to R.R. 4:68-4, made applicable to assignment proceedings by R.R. 4:69, see In re Xaviers, Inc. , 66 N.J. Super. 561 (App. Div. 1961), Tumarkin applied for and obtained an order authorizing retention of himself as attorney and counsel pro se in connection with the administration of the estate.

The estate was originally evaluated at $4,270. The assignee's efforts, however, increased the total gross receipts, as settled in his account, to $6,444.53. A portion of this sum, $2,000, represented proceeds of a suit to recover money due and owing the corporate assignor on a series of notes. The assignee, in his final account, charged himself with the aforementioned gross receipts and claimed disbursements of $1,627.91, leaving a net balance of $4,816.62. He prayed assignee's commissions of $1,288.91 (representing exactly 20% of the gross estate) and an allowance as attorney pro se of $1,500, in addition to $30.54 for his disbursements as counsel.

The trial judge, after due consideration, awarded Tumarkin $500 in commissions and allowed him $325 (plus disbursements) as attorney pro se. His reasoning was apparently based upon In re Pynn-Hawley Co. , 63 N.J. Super. 50 (Cty. Ct. 1960), a copy of which he attached to his letter of disposition. The latter decision, stating that the 20% limitation of N.J.S. 2A:19-43 on "commissions and allowances" awardable to an assignee was inclusive of attorney's fees, was in effect overruled by our recent holding in In re Xaviers, Inc., supra (66 N.J. Super. , at pp. 578-579), wherein we pointed out that attorney's compensation was not paid "to the assignee" but was awarded directly to counsel by the court. The trial judge's total award herein, which amounted to approximately 13% of the estate, must thus be evaluated in the light of our rejection, in Xaviers , of his primary assumption.

The Government, at the outset, assails the jurisdiction of the court below. Its argument is centered around N.J.S. 2A:19-7, providing as follows:

"The assignee, upon receiving a general assignment, shall forthwith record it, including the inventory and list of creditors with their claims, in the county where the assignor resides and in any other counties or states where he may deem it necessary. The same shall be recorded in this state in the office of the register of deeds in counties having such an office and in the office of the county clerk in other counties. A copy of the same, executed by the assignor or certified by the register or county clerk, shall be filed by the assignee with the surrogate of the county where the assignor resides or with the clerk of the superior court."

It is urged that the import of this provision is that the copy of the deed must be filed with the surrogate "forthwith" upon receipt of the assignment, that the document must be on file throughout the administration of the trust, and that such filing is prerequisite to jurisdiction over the administration of the estate in the Probate Division of the County Court. It is pointed out, factually, as recited in the trial court's settlement of the case, R.R. 1:6-3, that the deed herein was not filed with the Union County Surrogate until January 9, 1961, five months after the assignee's final account had been confirmed. (It had been recorded in the Register's Office of Union County on April 23, 1958, two days after its execution.) Thus, the argument runs, since the statute is mandatory in all pertinent respects, and since jurisdiction cannot be conferred by consent where it is not authorized by law, the failure of the assignee to timely file with the surrogate is fatal to the right of the trial court to preside over these proceedings.

At the oral argument, Tumarkin was permitted by the court to offer in evidence original correspondence indicating that on March 23, 1960 he forwarded the original deed of assignment to the Surrogate of Union County along with his complaint on assignee's account, statement of claims proved before the assignee, affidavit of services rendered by him as attorney pro se , and cancelled vouchers showing a balance of $4,831.62. The Surrogate did not file the deed, perhaps because he was not expressly directed to do ...


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