National Bank of Commerce v. Great Kanawha Orchard Co.

Litz, Judge: Tbis is an appeal by a special commissioner from a decree fixing bis compensation. At April Rules, 1926, National Bank of Commerce of Williamson and S. A. Moore, assignee, suing in bebalf of themselves and all other lien creditors of Great Kanawha Orchard Company, a corporation, and J. H. Stewart, filed their bill of complaint in the circuit court of Putnam county against Great Kanawha Orchard Company, J. H. Stewart and others, praying for a sale of property belonging to the orchard company and Stewart to satisfy the liens thereon in their order of priority. The cause was referred to a commissioner in chancery, who filed his report of the liens, iu their order of priority, March 18, 1927. April 30, 1927, a decree was entered confirming the report, ordering the sale of the property, and appointing Charles E. Hogg special commissioner to sell. Pursuant to said decree, the property was sold, September 5, 1927, at public auction, to Charles E. Burks of Lynchburg, Virginia, for $46,500. A hearing on exceptions' to the report of sale, filed October 17, 1927, was postponed until December 5, 1927, to give the excepting parties opportunity to secure a higher bid. On the latter date, appellant reported an upset bid, by E. J. Kaufman, of $57,000, which was promptly accepted and confirmed. Under the terms of this sale, the purchaser paid to the special commissioner $14,250 in cash and delivered to him his three several notes, dated December 5, 1927, for $14,250 each, with “approved” endorsement, evidencing the balance of purchase price, payable in one, two and three years, respectively. n the decree confirming the sale, the special [650] commissioner was directed to apply tbe cask consideration to payment (1) of costs and bis commissions (of $2850) for making tbe sale, (2) of taxes against tbe property for 1925 and 1926, and (3) of tbe liens in order of priority. Default baying been made in payment of tbe first note, tbe property was re-sold, March 3, 1930, at public auction, to Charles E. Burks and Thomas S. Kirkpatrick, partners, doing business as Kirkpatrick & Burks, for $22,000, payable as follows: one-fourth cash, tbe residue in four equal installments in six, twelve, eighteen and twenty-four months, respectively. Prior to tbe entry of tbe decree of re-sale, appellant obtained a personal judgment in tbe circuit court of Kanawha county, against Kaufman and bis sureties on one of tbe purchase money notes, and caused execution to be issued thereon, wbcb was returned unsatisfied. Tbe final report of appellant, filed August 6, 1930, computed bis commission at tbe rate of 5% on $57,000 (tbe original sale price, of which only $14,250 has been collected) and tbe re-sale price of $22,000, or 5% on $79,000. Upon exceptions to tbe report, tbe court limited tbe commission to 5% of $36,250, tbe total amount collected from tbe original sale and re-sale. Chapter 132, section 3, Code 1923 (5-12-6, Code 1931), declares that there shall not be allowed to ¡commissioners or officers for services under any decree or order for a sale, including tbe collection and paying over of tbe proceeds, a greater commission than five per centum of tbe amount received by them, unless tbe court otherwise order; and that if a sale be made by one commissioner or officer and tbe proceeds collected by another, tbe court .under whose decree or order they acted, shall proportion tbe commission between them as may be just. Prior to 1919, tbe statute provided that tbe commission should not exceed five per centum on tbe first $300.00 received and two per centum on all above that sum, unless tbe court otherwise ordered. Construing tbe prior act in tbe case of Sulzberger & Sons Co. v. Fairmont Packing Co., 86 W. Va. 361, 103 S. E. 121, tbe court said: “A proper construction of tbe statute does not justify a greater allowance of commissions than those specified, unless upon some special ground shown in tbe record. So far as [651] the record shows the commissions allowed by the statutes in this instance afforded ample compensation to the commissioner. In Hartley v. Ault Woodenware Co., 82 W. Va. 780, 97 S. E. 137, we decided that allowance of commissions in excess of the legal rate must be founded upon clear proof that the amount so allowed does not exceed the actual value of the services rendered. And in Lindsay v. Eichelberger, 72 W. Va. 201, 77 S. E. 992, the same rule is laid down respecting the allowance of commissions in suits of this character. In Weigand v. Alliance Supply Co., 44 W. Va. 133, 28 S. E. 803, we decided that extra allowance to trustees and receivers should not be made in the absence of evidence of extraordinary services rendering such allowances just and reasonable. We are of opinion, therefore, that the decree allowing the commissioner commissions in excess of the statutory rate of five per cent on the first three hundred dollars and two per cent on the residue, is erroneous and should be corrected.” The appellant seeks to avoid the limitation of the statute on the grounds, (1) that the decree of December 5, 1927, directing payment of commission on the entire purchase price of $57,000 from the cash proceeds, was final and could not, after the term at which it was entered, have been legally altered by the trial court; (2) that there existed between him and the first lien creditors a special contract whereby, as a consideration for his services as attorney, he was to receive commissions on “the gross proceeds of sale,” and that in fixing these commissions on the sale the lower court should have taken into consideration this special agreement whereas, the allowance made by the court completely ignored the agreement, and (3) that he has performed extraordinary services in making the several sales and numerous reports, recommending the acceptance of the upset bid of $57,000, and in attempting to collect the deferred purchase price from Kaufman and his sureties. Answering the first contention, we are of opinion that the allowance of commission under the decree of December 5, 1927, contemplated the collection of the total purchase price, and, upon failure of appellant to collect any part of the deferred installments, the. court acted within its reserved author [652] ity in later limiting the commission to the proceeds of sale. The decree expressly required him to “collect” the notes for the remaining purchase price and apply the proceeds in dis^ eharg’e of the liens. The second point is without merit. The court was authorized by statute to determine the compensation of appellant as special commissioner only, and could not consider the special agreement, upon the theory that it provided for an allowance to him in excess of that fixed by statute. Any agreement between the first lien creditors and the special commissioner, in his capacity as attorney, is purely collateral. The allowance for services of a special commissioner is governed by statute, and is separate and distinct from any agreement that might exist between the commissioner and parties to the suit. The contention of appellant would, therefore, require the adjustment of rights under a collateral contract foreign to the subject matter of the suit. ■ Finally we cannot say that the trial court has abused its discretion in refusing to allow commission in excess of five per centum upon the theory that appellant has rendered extraordinary services for the reason that his services, except in the actual selling of the property, were more or less of a formal nature. The statute does not require allowance of even five per centum commission, but authorizes the court, in exercise of a sound discretion, to fix a lower rate. The decree is, therefore, affirmed. Affirmed,.