
    In the Matter of the Assignment of Julius Bien Company, a New York Corporation, to Sheldon Franklin, as Assignee for the Benefit of Creditors. Julius Bien Company and Others, Appellants; Sheldon Franklin, Respondent.
    Third Department,
    January 6, 1915.
    Assignment for benefit of creditors — payment of commissions of assignee, fees of attorneys and compensation for expert services deferred until final accounting — costs.
    Where, on an appeal from a judgment of a County Court approving the report of an assignee for the benefit of creditors who had conducted the business of the assignor for a short time, and permitting the payment of commissions to the assignee, of fees to his attorneys, and of compensation to another person for expert services, it appears that the quantity and quality of the legal services rendered by the attorneys is not clearly discernible from their account; that the agreement by a com- ■ mittee of the creditors to pay for expert services is not clearly set forth in the record, and it is not certain that there will be a profit from continuing the business, and there is no apparent reason why the estate should not be closed up speedily, the consideration of such claims should be deferred until the final accounting, and the attorneys and claimant for expert services given an opportunity to explain them claims and compelled to submit to an examination and cross-examination in open court.
    As the objecting creditors did not vigorously protest against the payment of the claims when the matter was before the County Court they, in a manner, necessitated this appeal, and, therefore, are not entitled to costs.
    Woodward, J., dissented.
    Appeal by the assignor, Julius Bien Company, and two creditors, Franklin Bien and another, from an order of the County Court of Ulster county, entered in the office of the clerk of said county on the 23d day of September, 1914, approving the report of the assignee and permitting the payment ■ of certain items objected to by the appellants, except that portion of the order which directed a dividend of twenty per cent to be paid to the general creditors.
    
      Franklin Bien [Harry Zalkin of counsel], for the appellants.
    
      Manley & Grand [Franklin G. Manley of counsel], for the respondent.
    
      Aron & Vanderveer [Edgar T. Brackett and Harold G. Aron of counsel], for Gustav C. Wedekind.
   Howard, J.:

On February 2, 1914, the Julius Bien Company made an assignment for the benefit of its creditors. The business of the .concern was lithographing. The inventory showed the assets of the assignor to be $59,123.13. By converting these assets into cash, $53,404.61 was realized. The assignee continued the business of the concern from the date of the assignment down to May 22, 1914, a period of nearly four months. This continuation of the business produced gross receipts (counting in the $11,619.92, outstanding accounts) of $35,092.59 — but it cost $32,878.29 to operate the plant during that time, so that there was only a net profit of $2,214.30. But it is not certain that there will be any profit, for only $23,412.61 in cash has been produced by operating the plant; the balance is outstanding and uncollected. In. fact the $53,404.61 realized from the liquidation of the assets which were turned over to the assignee has been depleted, as a result of operating the plant, down to $43,447.77, for this was the amount in his hands before he paid any of the disputed claims. Out of this amount the assignee has paid his attorneys $5,000; he asks to be allowed-to take to himself on account of his fees $3,000; and to pay to the “ committee of one,” for expert services, $1,921.93. Each of these three items is disputed and contested by the appellants. The matter came on before the county judge and he approved of the assignee’s report, including the attorneys’ fee, and directed the payment of the other two items.

The account of the attorneys is very long, including eighty pages of the record, and it is very minute; but a careful examination of it leaves one in doubt as to the quantity and quality of the legal services rendered. One member of the firm of attorneys seems to have attended at the office of the assignor nearly every day and to have remained all day from nine A. m. to six p. m. Just why this was necessary is not very well disclosed. The character of this account and the size of the bill presented, compared with the size of the estate, requires, we think, that the attorneys explain it more satisfactorily and submit to an examination and cross-examination in open court. We do not criticise the claim; the attorneys will very likely be able to establish it, but in view of what has been said we think its payment should be deferred until the final accounting.

Mr. Wedekind, the “committee of one,” claims to have performed services for which the committee of creditors agreed that he should have two and one-half per cent of the assets. This percentage, up to date, amounts to $1,921.93; there is yet more to be reckoned. That such an arrangement was made is not at all clear to us from the record, but if it was made it is not binding upon the court. It is the duty of the court to protect the other creditors not a party to this agreement, even if the agreement was in fact made. Therefore, the court must inquire whether the claim is just. The Debtor and Creditor Law (Consol. Laws, chap. 12 [Laws of 1909, chap. 17], art. 2; since amd. by Laws of 1914, chap. 360) makes no provision for this expenditure; however, if it was proper and necessary, it will be upheld. The record is very meagre as to the nature of the services rendered by Wedekind or as to the necessity of their being rendered. As near as we can determine, he managed the business while it was being run from February third to May twenty-second. But the profit derived from a continuation of this business, as has been seen, was only $2,214.80 — if all the outstanding accounts' are not collected, perhaps there will be no profit. The continuation of the business brought into the hands of the assignee gross receipts of $35,092.59, upon which a commission of seven and one-half per cent for the assignor and the “committee of one ” had to be reckoned. A computation of this additional commission will show that it amounts to more than the slender profit on the continuation of the business, so that if the management of the business was Mr. Wedekind’s only duty he was a detriment, rather than a profit, to the estate. But all this, perhaps, can be explained by Mr. Wedekind. It is not, however, explained in the record before us, and Mr. Wedekind in his brief recognizes this, for he says the record is ‘' somewhat meager as to the kind of services which he rendered.” We, therefore, conclude that Mr. Wedekind should also make satisfactory explanation and should submit to an examination and cross-examination in open court.

Without further comments, and for reasons set forth above, we think the payment of the assignee’s commissions should be deferred until the final accounting. There is no apparent reason why this estate should not be closed up speedily, and that is why we are ordering the consideration of these claims deferred until the final accounting rather than to make more expense by ordering a reference now.

We appreciate that only two creditors are objecting; but there are several other creditors who, although not objecting, have not actually consented, for they have, apparently, given the matter no attention, and from the record there seems to be some merit in these objections.

When the matter was before the learned county judge he overruled the objections; but had the appellants on that occasion appeared and made vigorous protest as they did on the appeal, he would, very likely, have heeded their argument. Their opposition at that time appeared, undoubtedly, quite perfunctory; so that they have in a manner necessitated this appeal; therefore, they are entitled to no costs, here or below. The order should be-reversed and the motion denied.

All concurred, except Woodward, J., dissenting.

Order reversed, without costs, and matter remitted to the county judge for further hearing.  