People v. Brooklyn Bank

140 A.D. 750, 126 N.Y.S. 155, 1910 N.Y. App. Div. LEXIS 3031
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 16, 1910
StatusPublished
Cited by3 cases

This text of 140 A.D. 750 (People v. Brooklyn Bank) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People v. Brooklyn Bank, 140 A.D. 750, 126 N.Y.S. 155, 1910 N.Y. App. Div. LEXIS 3031 (N.Y. Ct. App. 1910).

Opinions

Smith, P. J.:

Upon November 16, 1907, upon the application of the Attorney-General, Brnyn Hasbrouck was appointed temporary receiver of the defendant bank. Proceedings were taken under the statute, and in December of that year an order was made appointing said Brnyn Hasbrouck and one Charles M. Higgins, the appellant here, as permanent receivers. Upon the appointment of Mr. Hasbrouck as temporary receiver he employed as his attorney one Charles A. Dolson, who had just prior thereto been a Deputy Attorney-General of the State. Thereafter a contract was attempted to be made between said Hasbrouck and Dolson, whereby he should become the attorney for the permanent receiver. This contract was approved by the Special Term, but, upon appeal, the order approving the same was reversed by this court (125 App. Div. 354), upon the ground that it was against public policy to allow to be appointed as attorney for the receiver one who had been associated with the Attorney-General at the time the application was made for the receivership. The said Dolson, however, had already done considerable work for the receivers, and was final!y allowed $10,000 as his compensation, of which no complaint is here made. Upon April eighth the said receivers entered into a contract with James C. Church and J. Edward Swanstrom / to act as attorneys for the receivers for twelve months for the suni of $14,000. It was provided in said contract that if the receivership terminated before the twelve months by resumption or otherwise, they were to take such a part of the $14,000 as would be proportionate to the part of the year through which they had acted as the attorneys. It was agreed, however, that if the receiverslnp was closed within the year, the receivers would recommend to the court that these attorneys be allowed the full sum of $14,000 for their, services. Thereafter in June of 1908 arrangements were made for the payment of all depositors and the resumption of business by the bank. An application to be allowed to resume was made before the Special Term upon the sixteenth day of June. Upon said application Messrs. Church and Swanstrom appeared as attorneys for the receivers, but the receiver Higgins was not personally present. The receivers’ attorney here, Charles M. Stafford, was present, but claims that he was present as representing some of the depositors and not representing Mr. Higgins personally. That [752]*752proceeding resulted in an order authorizing the bank to resume and taking the statement of the Bank Superintendent of the financial affairs..of the bank as the accounts of the receivers, and said accounts as such were assumed to be settled. Allowance was made of $4,000 to the temporary receiver and $19,000 to each of the permanent receivers, and an allowance of $20,000 was made to Church and Swanstrom, the attorneys for the receivers, they having had theretofore received the sum of $2,000 under their contract. In this order it was further provided that the' assets should be turned over by the receivers to the bank, and the receivers should file affidavits of their disbursements, which should be attached to the papers upon which the motion was made nuno pro tuaio, which was a part of the report which was there assumed to be settled; and it was further provided “ that any party in interest may apply to this court at the foot of this order for such and other and further relief as may be necessary to carry into effect the purposes and provisions of this order as hereinbefore recited.” In pursuance of this order the assets were handed over by the receivers of the Brooklyn bank, and the allowances therein made were by them paid. In December of 1908 both receivers filed an affidavit of their disbursements as required by the order of June sixteenth. The receiver Higgins thereupon made application to the court to review his own account, alleging that the payments to the receivers were both illegal and excessive, and reciting the contract made with the attorneys and charging that the allowance to them was illegal, as being in excess of the sum lawfully due to them under their contract. Before the hearing of the motion the receiver Higgins made another application for an order to show cause why the accounts of his coreceiver should not be reviewed, basing this application upon the papers upon which the other application was made, as well as upon other papers. While the last application was in form for an order to show cause, which ios clearly unauthorized practice, a request was also made for such other order or relief to which the court might deem the moving party entitled. Upon the application of June sixteenth the Deputy Attorney-General is recited as appearing and not opposing. Upon the applications in December the receiver Hasbrouck appeared by counsel; Church and Swanstrom appeared personally. The applications resulted in two orders, one of them denying the [753]*753motion for a review and approving the accounts as rendered, and the other denying the motion for an order to show cause. From these two orders this appeal is taken.

The first question for consideration arises upon the application to dismiss this appeal. It appears that Philbin, Beekman & Menken appeared as attorneys for the Brooklyn bank at the time the order of June sixteenth was made, and consented to the making of the allowances. While the Attorney-General appeared and did not oppose, the Attorney-General appears upon this appeal and states that he considers the allowances too large," and that they should be reduced if the legal right so to do be found. It is insisted by the receiver Hasbrouck and by the attorneys whose allowances are challenged- that the stockholders of the Brooklyn bank alone have the right to question these allowances, and that it does not lie with the receiver. In the case of People v. Knickerbocker Trust Co. (127 App. Div. 215) the attorneys for all parties, except the Attorney-General, had consented to certain allowances; the depositors were to be paid in full, so that the general creditors were not interested. It might as well have been argued that the stockholders of the trust company alone could object, and that the Attorney-General had no right to make the application. But the allowances were there reduced. Moreover, the receiver represents all parties interested in the fund. The consent of the attorneys of the Brooklyn bank was given under such circumstances that if such consent had been refused the plan of resumption would have been imperiled. Without imputation upon the good faith either of the receivers or the attorneys for the receivers a consent thus given should be held to be given under moral if not legal duress, and should not be held to estop the receiver in his effort to protect the interests which he is bound to protect under his trust. The motion, therefore, to dismiss the appeal should be denied.

The second question which arises is the allowance to the attorneys Church and Swanstrom. It will be remembered that Attor-’ ney Dolson had done the work for the trust from November until April, and had been paid $10,000 therefor. The work for which these attorneys have received this allowance was done from April eighth until June sixteenth, a little over two months. It is claimed bj one of the attorneys that there ivas still some unfinished business [754]*754left which they were to transact without compensation. This claim, however, cannot be considered in the absence of a specific disclosure of the extent of these services and of their .value.

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Related

Woodmansee v. Bertenshaw
216 P. 276 (Supreme Court of Kansas, 1923)
People v. Brooklyn Bank
157 A.D. 171 (Appellate Division of the Supreme Court of New York, 1913)

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Bluebook (online)
140 A.D. 750, 126 N.Y.S. 155, 1910 N.Y. App. Div. LEXIS 3031, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-v-brooklyn-bank-nyappdiv-1910.