Case ID: mass_26/html/0417-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam,.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Phenix Bank in Connecticut versus William Sullivan et al.
    
    Where an insolvent debtor assigns his property to trustees to be distributed ratably among those only of his creditors who shall become parties to the instrument of assignment within a limited period, a creditor who has had seasonable notice of the assignment is not entitled to become a party after the expiration of such period; nor is it material, that no distribution has been made before he requests permission to execute the instrument, nor that the instrument contains no release to the debtor.
    This was a bill in equity, representing that the plaintiffs, on the 23d of May, 1827, were creditprs of the Boston Glass Manufactory; that by an indenture bearing date of that day, between the manufactory of the first part, the defendants of the second part,, and all those persons who should become parties thereto of the third part, the property of the manufactory was assigned to the defendants and accepted by them in trust to distribute the net proceeds ratably among the creditors of the manufactory ; that by the indenture it was provided, that in case any creditor should, for the space of six months after the date thereof, refuse or neglect to execute or otherwise legally accede to the same, such creditor should be excluded from all benefit of the trust; that no distribution has yet been made of the property assigned ; that the plaintiffs did not know that the indenture had been made, until after the expiration of the six months; that if they had known of it, they believe they should have become parties to it; and that the defendants now refuse to permit them to become parties ; and the plaintiffs pray for a decree that they shall be permitted to become parties to the indenture and to receive their proportion of the moneys distributable under the trust, as if they had legally acceded to the same within the term limited. .
    The defendants allege in their answer, that they caused an advertisement to be inserted daily, for more than thirty days, m several newspapers printed in Boston, that the time for becoming parties would expire on the 23d of November, 1827 ; that during all that time the plaintiffs had an agent resident in Boston, who transacted their business in lending money, and with whom the glass manufactory dealt in divers transactions ; that the agent wrote to the defendants a letter, dated May 28th, 1827, in which he says the glass company are reported to be in difficulty and “by to-day’s paper have called their creditors together ; ” that the plaintiffs were put upon inquiry, and might have become parties to the deed of assignment if they had not elected not to do so.
    
      Sohier, in a written argument on behalf of the plaintiffs,
    stated that by the indenture the creditors were not required to give a release of their respective debts, but that they only consented to receive, in partial satisfaction of their claims, their respective shares of the proceeds of the assigned property. He contended that the purpose of the assignors was to make an equal and equitable provision for the benefit of all their creditors. No other creditor will be injuriously affected by the plaintiffs’ obtaining a share of the trust fund, because the assignors will remain chargeable to him for the unpaid balance of his debt. If the indenture had contained a release of the debts due to those creditors who executed it, and the assignors had attempted, through the influence of hope and fear, to procure a speedy discharge, the plaintiffs might have been resisted successfully, upon the ground that releases were given under an expectation of an augmented dividend, on account of the refusal or neglect of some creditors to become parties within th.e appointed time, or were given through fear of a total loss. The clause respecting the six months had relation to the time when the assignees might be required to divide the trust fund. Time is not generally considered in equity an essential part of the contract, and therefore relief is often given where objections are founded on time only ; particularly where no injury is sustained. He cited Dunch v. Kent, 1 Vern. 260 ; Lashley v. Hogg, 11 Ves. 602 ; Angell v. Haddon, 1 Madd. R. 529.
    
      Sullivan, for the defendants.
   Per Curiam,.

We are of opinion that the plaintiffs have no right to become parties to the indenture, the six months having expired before they made application for that purpose. The property is assigned, through the trustees, to the creditors who executed the instrument seasonably. Public notice was given, so that all the creditors might have an opportunity of sharing in the trust fund. The plaintiffs had an agent in Boston who had control of this particular demand, and they must have had notice of the assignment.

Bill dismissed. 
      
       See Battles v. Folies, 21 Pick. 239; De Caters v. Le Ray De Chaumont, 2 Paige, 490; Holmes v. Love, 3 Barn. & Cressw. 242; Coe v. Hutton, 1 Serg. & Rawle, 398. See also St. 1838, c. 163.