Case ID: ohio-st_50/html/0444-01.html
Source: Caselaw Access Project
Author: {"author": "Spear, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Leonard et al. v. Adm’r of Kebler et al.
    Assignments—■ Delivery essential to validity of.
    
    1. Delivery is essential to the validity of an assignment.
    2. K., being about to take his own life, drew up and signed an instrument purporting to convey to L. and two others named therein, as security for debts by him owing to them severally, certain articles of personal property, also notes and choses in action which were then held by another as collateral security for a debt. The instrument was not executed in pursuance of any arrangement with the persons named therein, or either of them, and was without the knowledge of either. It was enclosed in an envelope addressed to L-, who was a relative of K., and then a member of his family. In another envelope addressed to her, was a -letter of farewell, and the two envelopes were surrounded by a rubber band. K. had, after the signing of the papers, several opportunities to deliver them to L, but did not do so, nor speak of them. After he had taken the poison, and when he was unable to speak and nearly unconscious, L. entered his room, and, finding the papers lying by his side on the bed, took them into her possession and read them. K. had no knowledge of this. He did not regain consciousness, and died some four hours afterwards.
    
      Held: That the persons named in the instrument took no title to the property described by reason of the attempted assignment.
    3. K. and R. were partners, as lawyers. On and prior to June 23, 1887, IC. hail become indebted to R. for money loaned, about $13,000, on a portion of which R. held an assignment of ten railroad bonds, of $1,000 each, as security. Part of the money was loaned to enable K. to repay money which, as he told R. at the time, he had received, as a member of the firm from third persons, to invest for them, and had converted to his own use. On the date above named, IC. executed and delivered to R. an assignment of twenty-five railroad bonds, and a warranty deed of land. Ten of these bonds were the ones before mentioned, thirteen were in the possession of bankers as collateral on a claim held by them against K., and two were in the hands of another. IC. was also indebted to R. on firm account for fees, etc., received by him in excess of his share, which was known to R., but (n'o statement of the partnership account having been made) the exact amount was not known. At the time of the delivery of the assignment and deed, IC. said to R. that he had been unable to make up the statement yet, but he was indebted to R. on the firm account, and added: “Whatever may be coming to you on a settlement of our affairs; I am going to get up this statement, and whatever is coming to you on settlement of partnership affairs, I want to secure you against. I want to make you perfectly secure. Naturally, you think that I have not done exactly what was right here, and I want to show you that I want you to feel absolutely secure and safe in every way, and I have drawn up this assignment. I want you to hold that as security for the money you have advanced, and for whatever is coming to you until we have a full settlement of our partnership affairs; on settlement of the partnership matters.” R. took the assignment and deed, saying “all right.”
    The partnership was dissolved, by mutual consent, September following, but no statement was made, nor final settlement of partnership affairs had.
    The deed was filed for record with the county recorder November 23, 1887, about 9 o’clock, A. M., and, on the same day, about 1 P. M., IC. died.
    K’s estate is insolvent.
    In an action b}' the administrator of IC, to determine the right of R., under his assignment and deed,
    Held: The assignment and deed were intended as security, not only for such amount as was due to R. for money loaned, and balance due on fee account, but as indemnity to protect from liability for acts of K. regarding partnership transactions, and the property so conveyed is to be subjected to the payment of any obligation that may be due from the estate of K. to R., upon final settlement of all partnership affairs, including as well liability arising from misuse, if any, of the money of clients of the firm, by K., as balance accruing upon adjustment of fee account.
    (Decided June 20, 1893.)
    Error to the Circuit Court of Hamilton county.
    The action below was brought December 22, 1887, by Wm. J. Coppock, as administrator of Charles A. Kebler, deceased, against Henrietta D. Eeonard, Adolf Hartdegen, and Mary S. Russell, plaintiffs in error, and Frederick G. Roelker and others, as creditors of the deceased, and the firm of S. Kuhn & Sons, to determine adverse claims of the plaintiff and the said creditors, to certain notes, bonds, and other securities described in the petition, in the possession of S. Kuhn & Sons, and held by them in trust, subject to a small claim in their favor.
    Since the filing of the petition in error, the claim of Henrietta D. Eeonard has been arranged, and is, therefore, not further considered.
    Adolf Hartdegen’s claim was, in substance, that during the month of August, 1887, he deposited with Kebler $3,800, to be by him invested for defendant, which sum Kebler then converted to his own .use. ' In consideration of said indebtedness, on November 23, 1887, Kebler sold, assigned and transferred to defendant all the personal property described in the petition. He prayed an order for delivery of the property to him, and, if sold, then that the debt due him be paid from the proceeds.
    Mary S. Russell’s claim was, in substance, that the law firm of Kebler & Roelker, of which deceased was a member, while acting as attorneys for her, became indebted to her in the amount of $3,290, and that, in order to discharge the same so far as possible, Kebler, as a member of the firm, sold and assigned to her, by written instrument dated November 23, 1887, the different pieces of personal property described in the petition. She asked a sale; that her rights might be protected, and for all proper relief.
    
      F. G. Roelker’s claim, set up by cross-petition, was founded upon an assignment by Kebler to him of twenty-five bonds, of $1,000 each, of The Cincinnati, Georgetown & Portsmouth Railroad Company, and a warranty deed conveying lands known as “the homestead lot,” both executed and delivered to him June 23, 1887, (the land being part of that described in plaintiff’s petition in case number 79,812 pending in said court), his contention being that the assignment and deed were given as security for certain indebtedness owing to him by Kebler, and as indemnity against liability for certain acts of Kebler in regard to the money of clients of the firm, the particulars of which transactions were concealed by Kebler in his lifetime from Roelker. Facts bearing upon this claim are stated in the opinion.
    By order of court, the two suits'brought by Coppock, adm’r, were consolidated. Replies were filed by plaintiff, the cause tried in the common pleas, and thence appealed to the circuit court. That court, upon trial (making separate findings of fact and law), found that the debts existed as claimed respectively by the plaintiffs in error, but otherwise found against them, ánd dismissed their cross-petition; it also found the amount due Roelker, as claimed, and that he had a lien for that amount, but otherwise found against him, and decreed accordingly.
    The present action is brought by the plaintiffs in error, and by Roelker by cross-petition in error, to obtain a reversal of the judgment of the circuit court.
    Additional facts appear in the opinion.
    
      Avery & Holmes, Stephen Coles and Franklin T. Cahill, for plaintiffs in error.
    We contend that the finding of facts established such a constructive delivery as-is sufficient in law to support the validity of said instrument.
    We contend the court erred in failing to distinguish between the case of a gift without consideration, and the case of - a grant in furtherance -of a contract, or in payment of or as security for a prior existing indebtedness. The court expressly put the case at bar upon the same footing as a voluntary gift.
    And then the court bases its decision upon the two leading authorities in Ohio, as to what constitutes sufficient delivery in the case of gifts. 16 Ohio St., 586; Flanders v. Blandy, 45 Ohio St., 108.
    While we may admit that these cases are sound law as to delivery of gifts, which are purely gratuitous, they are not authority and are not law where the deed or instrument is executed in furtherance of a contract, or in payment of or as security for a prior existing indebtedness; in other words, where the instrument is supported by a consideration and is not a mere gratuity. The books abound in authorities and this distinction is recognized practically everywhere, either expressly or tacitly. In the case of a pure gift the rule is very strict, and much more is required than where the instrument has a consideration to sustain it. Nazro v. Ware, 38 Wis., 443; Exton v. Scott, 6 Simons, 31; 16 Q. B. 752, note; Steven v. Hatch, 6 Minn., 65; Deefendorf v. Deefendorf (Sup., C. S.) 29 N. Y. S. R., 122; Mitchell v. Ryan, 3 Ohio St., 377; Conlan v. Grace, 38 Minn., 276, 281; Goodpastor v. Leethens, (Ind.,) 23, N. E. 1090; Sommers v. Pumpray, 24 Ind., 231; Flint v. Phipp, 19 Pac. Rep., 543; Terhume v. Oldis, (N. J.) Centr. Rep., 117; 14 Alt., 638; Newton & Seeley v. Bealer, 41 Iowa, 334; Hinson v. Bailey, 73 Iowa, 544; Stone v. French, 37 Kan., 145.
    It is apparant from the above authorities that the test to which the case at bar is to be put, is—Did Kebler intend the instrument to vest the title in the grantees? The answer must be, yes. He wrote the instrument preparatory to committing suicide, and then took the fatal poison. He put the paper where it would be-found by the first person who should chance to come to him, with the intention that it should be so found, and it was so found and taken possession of.
    
      Kittredge & Wilby, for F. G. Roélker, cross-petitioner in error.
    
      The transfer to Roelker was absolute on its face. Its character as a mortgage and as security is derived, not from a written defeasance, but, from the statement of Kebler to Roelker, concurrent with the delivery of the property. That defeasance Roelker reproduces on the stand in Kebler’s own words, that the property then delivered to Roelker should be his (Roelker’s) security.
    That part of the consideration for this transfer, which was a contingent liability of a character such as would be created by frauds upon Roelker through partnership misdeeds of Kebler, would certainly not be an unlawful consideration, and would be entitled to full protection as a valid lien upon the property conveyed. This we understand to be conceded.
    Eiens for contingent liabilities, furthermore, are not unusual. Such are mortgages by a guardian to his ward as a substitute for freehold security in the administration of the ward’s estate to secure the ward against possible failure to turn over to him at majority his entire property. Such also are mortgages to secure employers against the contingency ■of employes’ defalcations.
    
      Wilby & Wald., for Coppock, administrator.
    The only question arising on the cross-petition in error of Frederick G. Roelker is whether the circuit court erred in limiting his security to cover only the indebtedness on the two notes and the check, and for sums received by Kebler “for fees and other partnership items in excess of the amount due him.”
    Roelker claimed that his security covered more; that it was given not only to secure a debt, but, in addition, by way of indemnity to reimburse him for any loss that he might suffer, by reason of liability as partner, for the unlawful acts of Kebler.
    The court held that the assignment and conveyance were a security for all of Roelker’s claims against Kebler, except only the claim for indemnity against Kebler’s misappropriations of the moneys of the firm’s clients. The transfer to Roelker was absolute on its face. Its character as a mortgage and security is derived, not from a written defeasance, but from the statement of Kebler to Roelker, concurrent with the delivery.
    The entire controversy turns upon the interpretation of that statement, viewed in the light of the surrounding circumstances.
    On June 23d, 1887, Kebler was indebted to Roelker for money loaned on two notes and a check, in the. aggregate sum of $11,875, and also for a balance on an unsettled partnership account, the amount of which was then unknown, which Roelker thought was between two and three thousand dollars, as a rough estimate, and which has since been settled to have been $3,090.59.
    Under these circumstances Kebler executed the absolute assignment of the bonds and deed of the real estate to Roelker, and made to the latter the statement.
    It is the construction of the statement which is complained of by Roelker. His counsel in their brief express a doubt of the propriety of the court’s conduct in undertaking to construe the language of the “statement,” and charge the court with having taken “the liberty of ignoring the language in which the transaction was expressed.” We understand, however, that it is not the “liberty” but the duty of courts to construe the language of instruments, and often to do so, by limiting the meaning of words of general import to those matters which were in the minds of the parties employing them. And, assuming (what we do not concede) that the “statement” is susceptible of being interpreted so as to make the security cover indemnity against liability for the frauds or malversations of Kebler, we maintain that the court was right in its construction that such purpose was not within the comtemplation of the parties, and hence such result not the effect of their language. Harrison Ainslie & Co. v. Muncaster, 1891, 2 Q. B. 680; Deer Lake Co. v. The Michigan L. & I. Co., 89 Mich., 180; Lyall v. Edwards, 6 H. and N. 337.
    Surely, it can not be said, that when the bonds were transferred, and the realty conveyed'', on June 23, 1887, either, and much, less, that both of the parties contemplated a security covering anything but these enumerated items.
   Spear, J.

The claims of Adolf Hartdegen and Mary S. Russell rest upon the same facts, and may be considered together. Whether or not these parties have a standing in court on their cross-petitions, depends upon the legal effect of a paper purporting to be an assignment, dated November 22,1887, signed by Charles A. Kebler, of which the following is a copy:

“Cincinnati, November %% 1887.

“In consideration of $9,000.00 owed by me to Henrietta D. Leonard, I sell, assign and transfer to Henrietta D. Leonard, all my household furniture, useful and ornamental, books, silverware, pictures, linen, carpets and everything contained in my house on the Reading road, including jewelry and everything else; also, my two horses, one at pasture, one in my stable, carriage, buggy, wagon, harness, cows and everything contained in said stable, except the pony and appurtenances, which belong to my son John. Also a certain promissory note made by W. S. Rix or his wife to my order, for about $200; also a certain note to my order for $500.00 made by C. A. G. Adáe. (The mortgage of John M. Strobel for $2,500.00, on which $1,000 has been paid, belongs to her, Kuhn has it). Also all my right and interest in and to The Cincinnati, Georgetown and Portsmouth Railroad Company. Twenty-five bonds of said road owned by me and my interest in its stock after the debts for which they (the bonds) are pledged are paid.

“I also sell, assign and transfer to the said Henrietta D. Leonard, any other collateral owned by me and not needed by S. Kuhn & Sons, to pay the $5,000-note, for which twelve bonds of the said road and certain mortgage notes are held as collateral. I also sell, assign and transfer, all for said first named consideration, all my office furniture, law books, safe, and all other articles owned by me at or pertaining to my law office, No. 5 West Fourth street, Cincinnati, Ohio, to said Henrietta D. Leonard; also a certain note and mortgage made by T. Lewis Brown to my order for $4,138.10, now held by S. Kuhn & Sons as collateral for two of my notes for $500 each.

“After the above debt of $9,000 has been satisfied, I sell, assign and transfer to Adolf Hartdegen anything or everything above transferred, or the proceeds of the same, in consideration of $3,800 I owe him, and until said proceeds havé paid $3,800.

“After said H. D. Leonard and Adolf Hartdegen have been paid in full, I sell, assign and transfer to Mary S. Russell any and-all articles or proceeds left until my indebtedness to her is paid.

“Witness my hand and seal this November 23d, 1887.

“(Signed:) Charles A. Kebler, [seal].”

The findings of the circuit court show that prior to the execution of this paper, Mrs. Henrietta D. Leonard had entrusted Kebler, as her attorney and agent, with money to' invest for her, and that at the time of signing the paper, he had of her money for this purpose, about $9,000. He was insolvent, and at the time contemplated suicide. The instrument was not executed in pursuance of any arrangement with the assignees named, or either of them, and was without the knowledge of either of them. The paper was, before five o’clock of the morning of November 23, 1887, by Kebler inclosed in an envelope, addressed by him to Mrs. Leonard, then a relative and member of his family, and, in another envelope addressed to her was a letter of farewell, the two envelopes being surrounded by a rubber band. After the execution of the papers Kebler had several opportunities for delivering them to Mrs. Leonard, but did not do so, nor did he speak to her about them. About 8:30 o’clock A. M. Kebler took prussic acid, from the effects of which, about one ‘in the afternoon, he died. Before his death, but while he was under the influence of the drug, and almost unconscious, being about nine o’clock A. M., Mrs. Leonard entered his room, and found the papers mentioned lying by his side on the bed, and took them into her possession, and read them while he was still alive, but he had no knowledge of it then, nor afterwards, and never gave actual consent thereto. The instrument was intended by Kebler for Mrs. Leonard, for her benefit and that of Adolf Hartdegen, and Mary S. Russell, in order to replace or make good to them the-amount owing to each, but he did not intend that Mrs. Leonard should receive the same until after his death.

Under these facts the circuit court held (3 O. C. C. P-,' 600), “That such paper was never, either actually or constructively, delivered by Kebler to the assignees named therein, or to either of them, and that he did not intend to deliver it during his life—that he did not part with the dominion thereof while he was conscious, and that the assignees took no title to such dioses in action by virtue of such instrument.”

We affirm this holding. “Delivery is the final step necessary to perfect the existence of any written contract.” 1 Daniel on Neg. Inst., sec. 63; 3 Washburn on Real Prop. (4th Ed.) 282; Phipps v. Hope, Adm'r, 16 Ohio St. 586; Williams v. Schatz, 42 Ohio St. 47; Gano v. Fisk, 43 Ohio St. 462; Flanders v. Blandy, 45 Ohio St. 108. And the rule is not changed by reason of the fact that the instrument is based upon a consideration. Canfield v. Ives, 18 Pick. 253; Mills v. Gore, 20 Pick. 28; Younge v. Guilbeau, 3 Wall. 636; Leigh v. Horseme, 4 Mayne. 28; Chamberlain v. Hopps, 8 Vt. 94; Elmore v. Marks, 39 Vt. 538; Boyd v. Slayback, 63 Cal. 493; Pulse v. Miller, 81 Ind. 192.

As to the claim of defendant Roelker, the finding shows, among other things that he and Kebler had been partners in the practice of law at Cincinnati. On and prior to June 23,1887, Kebler had become indebted to Roelker, for money loaned, about $13,000, and as collateral security for $3,000 of it, ten of the railroad bonds described in the cross-petition had been pledged, and were in Roelker’s possession. Part of this money was loaned to enable Kebler to repay money which, as he told Roelker at the time, he had received from third persons for the firm for investment, and had converted to his own use. In September, 1887, the partnership was dissolved. No settlement of the affairs of the firm was made between the members, nor has any final settlement yet been made.

On the 23d day of June, 1887, Kebler executed and delivered to Roelker the assignment of railroad bonds (twenty-five in all) set up in his cross-petition; also the warranty deed of land therein described. Thirteen of the bonds were in the hands of Kuhn & Son, as collateral, and the remaining two in the hands of H. G. Roelker. The deed was filed for record in the recorder’s office of Hamilton county, November 23, 1887, at nine o’clock, a. m.

At the time of the delivery of the assignment and the deed, no statement had been made of, nor did Roelker know the exact state of, the partnership account, though he then knew that Kebler was indebted to him on firm account.

At the time of the delivery by Kebler to Roelker of the assignment and deed, as shown by the testimony of Roelker, who was the only witness as to what arrangement was made between them concerning the same, or as to what was said or done at the time of the delivery thereof, Kebler said, in relation thereto, no other person being present, that he (Kebler) was not able to make up the statement yet, and that the books of the firm had not been closed, but that he was indebted to me (Roelker) on the firm account; and he (Kebler) said also as follows, as stated by said Roelker:

“Whatever may be coming to you on a settlement of our affairs; I am going to get up this statement, and whatever is coming to you on settlement of the partnership affairs, I want to secure you against.
“I want to make you perfectly secure, and naturally you think that I have not done exactly what was right here, and I want to show you that I want you to feel absolutely secure and safe in every way, and I have drawn up this assignment. I want j^ou to hold that as security for the money you have advanced, and for whatever is coming to you, until we have a full settlement of our partnership affairs; on settlement of the partnership matters.”

Roelker then took the deed and assignment and said “all right,” and this was all that was said by either.

The foregoing constitute the material facts relating to the transaction, as found by the court.

Then follows a finding respecting testimony given by Roelker on cross-examination. But these statements are in answer to questions, which are not given, nor does the finding purport to give all he said on cross-examination, upon the subject. We cannot, therefore, conclude that such answers as are given ought to have the effect of impairing the force either of the claim made by Roelker in his answer and cross-petition, or of Kebler’s language which the court finds was in fact used by him, and the question in dispute must be determined alone upon the findings of fact which appear in the record.

The court further found that subsequent to the death of Kebler, divers persons made demand, and have brought or threaten suit against Roelker, claiming to have had dealings with Kebler, acting and professing to act as the partner of Roelker, whereby, as is claimed by said parties, the said partnership, and said Roelker, became and are in debted to them and each of, them for moneys misappropriated by Kebler, in an amount aggregating more than the value of the security transferred to Roelker, as above stated. Roelker had no knowledge thereof until after the death of Kebler.

Thereupon the court found, as conclusion of law, that Roelker had, by reason of the assignment and deed, a lien on the bonds and on the real estate, for a sum aggregating $14,965.59, with interest, as and for moneys loaned, and for fees, etc., received by Kebler in excess of the amount due him, but that the conveyance and the assignment of said bonds, or either of them, were not executed and delivered to Roelker to secure or indemnify him, nor were they intended to secure or indemnify him against any loss or claim by reason of the misappropriation of moneys by Kebler acting and professing to act as the partner of Roelker; and that Roelker has no lien upon or right to hold said real estate and bonds as security, or indemnity for any demand for which Roelker may have become liable as a member of the law firm of Kebler & Roelker, or of any firm of which the two were members, by reason of the misuse of the money, if any, of the clients of the firm by Kebler.

The question, therefore, upon this branch of the case is, whether the security held by Roelker should be limited only to the indebtedness found by the circuit court, or be extended to cover the liability of Roelker for the acts of Kebler with third persons, dealing with him as a member of the firm, as set up in the answer.

This court is not called upon to review the findings of fact, nor to review the evidence, nor to weigh it. The facts. are found, and we are concerned only with the proper legal conclusion which follows.

The assignment and deed gave to Roelker the legal title to the property transferred, from which followed the right of possession to the real estate, and to such of the bonds as were not actually delivered to him, by satisfying the prior lien of those who held them. What was said and done at the time of the delivery of the assignment and deed showed that those papers were to be regarded as mortgages and to be held as security. The evidence which established these facts also supplied the terms of the defeasance. These terms, as embraced in the findings, show that Kebler intended the property as security for whatever might be coming to Roelker upon a settlement of the partnership affairs, and that he was to hold the property as security until they should have a full settlement of partnership affairs. The mortgages partook, therefore, of the nature of indemnity, as well as security. The language contains no ambiguity, but is broad and plain, and it is not the duty of the court, as it seems to us, to search for extraneous facts for the purpose of belittling or impairing the effect of the security, which the words of the defeasance imply.

The allusion to a “statement” by Kebler, evidently had reference to a statement of the then condition of the partnership account with reference to fees, rents, etc., and did not include the idea of misappropriation of funds of clients, and had Kebler stopped there, it would follow, as claimed by the administrator, that the security was intended to make good, (besides the borrowed money), only such obligations as might appear upon an adjustment of that account when made up. But Kebler went further. His language indicates that he was conscious he had done that which was wrong. This he had, before that time, confessed to Roelker, and he well understood that Roelker might feel uneasiness in regard to the risks incident to their partnership relation. As Kebler had done wrong as to one client, it might result that he had, or might, as to others, though Roelker had knowledge only of the one case, and apparently did not anticipate further negligence or misuse of funds. Each could not have failed to realize that liability would attach to Roelker for firm obligations, contracted by Kebler, and that, while one was solvent and responsible, the other was involved, and, in all probability, irresponsible. Then, too, Kebler’s language imports • appreciation of Roelker’s kindness to him, and gratitude for it, and it would be but natural that he would want to give, as Roelker, had he possessed knowledge of the exact facts, would want to receive, security and indemnity sufficient to cover not only liabilities actually then known, but any which might later be shown to exist. To ignore this feature of the 'transaction is to give no effect whatever to the words “naturally you think that I have not done exactly what was right here,” and “I want to show you that I want you to feel absolutely secure and safe in every way,” and “to hold that as security for whatever is coming to you, until we have a full settlement of our partnership affairs; on settlement of the partnership matters.” It would be impossible for Roelker to be “safe in every way,” unless he were protected from Kebler’s wrongful transactions as to the funds of clients of the firm, nor could the property prove a security for whatever should be coming to Roelker upon a settlement if the idea of indemnity for that risk were excluded. There is nothing to indicate that Roelker countenanced or encouraged the acts of Kebler, from which the liability, now the subject of dispute, arose, and therefore it would be neither wrong nor immoral for him to be protected against Kebler’s short comings, of whatever character, which involved liability to him.

It seems evident, therefore, taking into account all that was said and done and understood, that the purpose of the security was to cause Roelker to feel secure and to make him secure in reality. Kebler did not undertake to limit the pledge to any special form of obligation, nor to such as might be then known to Roelker, nor indeed to such as then might be ascertainable. And we think the legal effect of the transaction is to embrace, within the securitjq whatever might, upon a settlement of all the partnership affairs, appear to be due from Kebler to Roelker. The extent of the right to resort to the pledge was to be ascertained when a settlement should be had; not before. Whatever appeared then to be due the property so pledged was to be subjected to pay.

No argument is needed to show that, if any of the claims made by those who charge that Kebler, as a member of the firm, had used their money, are sustained, Roelker will be liable, and Kebler’s estate obligated to re-imburse him, and that this obligation would be one arising out of the partnership matters; for, if the demand of such a creditor is in the nature of partnership business for the purpose of fixing liability on Roelker, it is equally a partnership matter for the purpose of a settlement of partnership affairs. No final settlement of partnership affairs can, therefore, be made, until these disputes are disposed of.

The claim of the administrator is that Roelker shall now give up his security, after satisfying the debt found by the circuit court, and the effect of it, if sustained, will be to compel Roelker to satisfy such demands of creditors as may be found against the firm, and deprive him of all security for reimbursement. This demand, we think, is unreasonable, and against the very letter, as well as the spirit, of the condition of defeasance. The question is made directly between the administrator and Roelker. The administrator can assert no title which Kebler could not, if living, and he ought not to stand in any better position in this attempt to enforce such demand than would Kebler. And the proposition that Kebler could not be heard to' make such an unconscionable claim needs only to be stated to meet with universal acceptance.

We have no occasion to dispute the correctness, as a general proposition of the rule advanced by counsel for the administrator, that a covenant will be restricted in its application to that which was within the contemplation of the parties. But such principle cannot, we think, apply to a mortgage of property given to indemnify against loss to the extent of limiting it to such liabilities only as were known to the mortgagee where he does not stand equally, as to means of information, with the mortgagor, and when the language of the pledge is inconsistent with such limitation. Beyond this, the rule does not affect this case, because, as we think, it was fairly within the contemplation of the parties that Roelker should hold his security until a full settlement of all partnership affairs had been had, with the right then to subject the property to his indemnity from all liability arising from Kebler’s acts relating to partnership business, and, as matter of law, it is not of consequence, whether or not the particular acts were, at the time of the taking of security, known, or anticipated.

The judgment of the circuit court, as regards the contention of plaintiffs in error, will be affirmed. As to -that of Roelker it will be modified in accordance with this opinion.