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In re Shay

Decided: July 6, 1962.

IN THE MATTER OF THE GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS OF ARTHUR SHAY, INDIVIDUALLY AND T/A MICHAEL SHAY TOYS, ASSIGNOR, TO DAVID E. FELDMAN, ASSIGNEE. DAVID E. FELDMAN AND KLEINBERG, MORONEY & MASTERSON, APPELLANTS,
v.
SCHRANZ & BIEBER CO., INC., RESPONDENT



Conford, Gaulkin and Kilkenny. The opinion of the court was delivered by Kilkenny, J.A.D. Gaulkin, J., concurs in the result.

Kilkenny

The Somerset County Court allowed the assignee, David E. Feldman, $1,767.65 "as commissions," $1,317.81 "as his disbursements," and $6.80 for his out-of-pocket expenses, and denied the application of Kleinberg, Moroney & Masterson (hereinafter called the attorneys) for a fee as attorneys for the assignee. The assignee appeals, contending he should have been allowed more. The attorneys appeal contending they should have been allowed a fee. The assignee also appeals from the award of a $400 counsel fee to Ralph Neibart, attorney for the objecting creditor.

I.

The trial court properly denied the application of the attorneys for the assignee for a counsel fee. They had not been engaged by the assignee upon an order of the court, as required by R.R. 4:69 and R.R. 4:68-4. Furthermore, there was no real need for the engagement of attorneys for the assignee in this case. The assignee is a member of the bar experienced in this type of proceeding and could have performed all of the services rendered by his attorneys. There was no litigation of any kind, and the only allegedly legal work involved herein consisted in the ordering of some lien searches, an examination of the respective interests of the assignor and his wife in a business, and the examination of the assignor under oath. All of these matters were within the easy competence of an attorney trained in insolvency matters, such as the assignee herein. In re Xaviers, Inc. ,

66 N.J. Super. 561 (App. Div. 1961), is dispositive of this issue.

II.

The award of a $400 counsel fee to Ralph Neibart, attorney for the objecting creditor, Schranz & Bieber Co., Inc., was proper. Mr. Neibart, on behalf of this creditor, whose claim represented 35% of all the claims of creditors, had filed exceptions to the applications of the assignee and his attorneys for commissions and counsel fees, and to the disbursements made by the assignee as shown in his accounting. The assignee asked for commissions in the sum of $3,100 -- approximately 20% of the gross receipts -- and in addition thereto prayed allowance for disbursements made by him for his bond premium, legal advertisements, transcripts of testimony, appraisal fees and auctioneer's fees, and other expenses in the total sum of $1,317.81. His attorneys asked for a counsel fee of $2,500. As the result of the exceptions filed on behalf of his client by Mr. Neibart and the hearing thereon, the application for counsel fees in favor of the attorneys for the assignee was denied and the claim for commissions was reduced from $3,100 to $1,767.65. Thus, the attorney for the objecting creditor performed services which resulted in a saving to the estate of $3,832.35. Since the attorney's objections to the commissions, counsel fees and disbursements operated materially to the benefit of the estate and the ultimate benefit of the creditors generally, he was entitled to the reasonable counsel fee awarded to him by the trial court. In re Broad Street National Bank of Trenton , 37 N.J. Super. 171 (App. Div. 1955); 7 N.J. Practice Series (Clapp, Wills and Administration) (3 d ed. 1962), § 1545, p. 258 and § 1546, p. 263.

The assignee raises the technical objection that the award of a counsel fee to Mr. Neibart was erroneous because he had not served any prior notice on the creditors of his intention to apply therefor. We find no substantial merit in this contention. Any creditor given notice of an application

for the approval of an account and for fees and commissions is on constructive notice that any one of the other creditors might file exceptions and, if the exceptions are sustained to the benefit of the estate, that the attorney for the exceptant may be allowed a counsel fee. Under the circumstances, we conclude that the award of this reasonable counsel fee for the valuable services rendered for the benefit of all the creditors by the attorney for the objecting creditor was proper.

III.

We turn now to the award made to the assignee. His gross receipts were reported as being $15,461.30 and upon revision were established at $15,505.87. He asked for a commission of $3,100 -- approximately 20% of the gross as originally reported or revised -- and in ...


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