The opinion of the court was delivered by: MARSH
In this petition for review, certified under the Bankruptcy Act, 11 U.S.C.A. § 67(c), a secured creditor, National Acceptance Company of America (NAC), presents two issues for decision, both of which relate to legal consequences arising from stipulated facts. As stated by the Referee, they are:
"1. Is a secured creditor entitled to interest on it's [sic] debt up to the date of payment.
"* * * I found that a secured creditor is only entitled to interest up to the date of sale of the collateral.
"2. Whether attorney's fees for counsel for the secured creditor in the amount of $2,377.27 is fair and reasonable.
"I found that a fair and reasonable fee for the services performed would be $1,000.00."
On the first issue, it is our opinion that the Referee should have allowed the claim of the secured creditor for interest to the date of payment. On the second, the Referee's finding that $1,000 is fair and reasonable should be affirmed.
From the stipulated facts it appears that on November 17, 1965, Schrader Body, Inc., a Pennsylvania corporation (hereinafter sometimes called bankrupt), borrowed $25,000 from NAC, a Delaware corporation with its principal place of business in Chicago, Illinois. Schrader executed a promissory note in the sum of $37,500,
and, to secure same, executed a Chattel Mortgage Security Agreement granting to NAC a security interest in Schrader's personal property. Financing Statements were duly filed in compliance with the Pennsylvania Uniform Commercial Code.
Schrader defaulted in the latter part of 1968 and, pursuant to the Security Agreement and note, the full amount of the indebtedness became due and payable. As of December 31, 1968, the amount NAC computed to be due and payable was $20,232.74 (see Ex. B, Stipulation of Facts).
On January 13, 1969, Schrader was adjudicated a bankrupt. On January 14, 1969, NAC filed a "Petition For Leave To Foreclose Security Interests And Secured Proof Of Claim." This petition was denied.
On March 12, 1969, NAC filed a proof of secured claim in the amount of $24,057.51, amended to $23,857.51, which comprised the sum of $18,498 unpaid principal; $1,409.74 interest to December 31, 1968; $647.50 interest from January 1, 1969 to March 12, 1969; $2,377.27 attorneys' fees incurred by NAC for advice, counsel and other legal services "in attempts to secure from the Bankrupt and the Receiver for the Bankrupt the payment of the moneys due to NAC * * *." Of the $2,377.27 in attorneys' fees, $350 was incurred before bankruptcy and $2,027.27 was incurred thereafter. Collection expenses amounted to $925. The Referee allowed expenses in the sum of $550, of which allowance NAC makes no complaint.
The bankrupt's assets covered by NAC's security agreement were sold at an authorized private sale by the Receiver for $35,000. NAC's first lien was transferred to this fund which was more than sufficient to cover NAC's claim for unpaid principal, interest, costs and attorneys' fees.
Evidently, distribution disputes arose. "Stipulations of Facts Relating to Claim of National Acceptance Company of America" was filed June 1, 1969; the "Affidavit of W. Walter Braham, Jr." pertaining to NAC's attorneys' fees was verified November 14, 1969; and ...