Case Name: Heilner and another against Imbrie and others
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1821-04-02
Citations: 6 Serg. & Rawle 401
Docket Number: 
Parties: Heilner and another against Imbrie and others.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 6
Pages: 401–411

Head Matter:
Heilner and another against Imbrie and others.
Monday, April 2.
. THIS cause was tried in March last, before the Chief. - . Justice. It was an action for money had and received, brought by the late firm of Pop mice l Heilner osP Co. for the use of Zachariah Florence, against the defendants as assignees °f Moses Cohen, Levi Anker, and Abraham Joseph, and turned ehieflyon the construction of their deed of assignment. By this instrument, which bore date^the 1st June, 1816, thev conveyed to the defendants all their estate, on the following trusts: First, to pay certain persons certain sums, for money lent. Secondly, “ To pay and satisfy the following named persons the following sums of money, -being for notes lent endorsements, to wit: Samuel Heilner Ss? Co. 2053 dollars 57 cents,” &c. “To Florence Ss? Wilson, 6490 dollars 71 cents,” gjC, a Provided., That no one of the debts before mentioned, shall have any preference or priority in the order of payment> but the same shall be paid rateably and in equal proportions, according to their respective amounts, out of the monies recovered, until ,the whole shall be paid and satisfied.” It was further provided, “ That no one of tha creditors preferred and named, as aforesaid, upon whose paper the said Moses Cohen Ss? Co. or the said Cohen, Anker Ss? Joseph, shall.be and remain indorsers, shall receive their proportion as aforesaid until they shall first; have taken up the said notes or otherwise freed the said Moses Cohen, Levi Anker Ss? Abraham Joseph, from their responsibility as endorsers.”
p-NS!0' indorsed tour promissory to 2°53doUars the aecommo&J. which e(j t0 F. 8cW. to C. A. & 3. due, and while they were in the hands of F. Sc W., C. A. 8c J. made an assignment in trust to pay,■ <clst. The following named persons (namingthem) the following sums,” 8cc. cc for money lent,” &c. <c 2dly. To pay and satisfy the following named persons the following sums, being for notes lent & endorsements, to wit: H. 8c Co. 2053 dollars 57 cents j to F. 8c W. 6490 dollars.” Preferences were given to several other persons by name. It was provided by the assignment that no one of the debts should have any preference or priority in the order of payment, but should be paid rateably and in equal proportion, accordiog to their respective amounts, out of the monies to be recovered, until the whole should be paid and satisfied. It also contained a proviso, that no one of thqpersons, creditors preferred and named, as aforesaid, should recover their proportions upon whose, paper the assignors should be or remain indorsers, until they should have taken up the said notes, or otherwise freed them from their responsibility as indorsers. On the day of the date ol the assignment, F. 8c W. executed a release to the assignors. At the time of the execution of the assignment, C. A. 8c J. were not indebted to H. 8c-Co., who, on the contrary, were indebted to the assignors.
Held, that the preference was not given to H. 8c Co. personally, but to the four notes indorsed by them, and that F. 8c W., in whose hands they were, might recover the amount of them in an action brought in the name of H. 8c Co. for their use.
In a suit between parties to a written instrument, parol evidence cannot be received to vary its contents, even in the case of a clear mistake, or departure from written instructions, so as to affect the interests of third persons uninformed of the facts, and who haye bona fide, and for a valuable consideration, acquired rights under it»
Prior to the execution of the assignment, the firm of Cohen, Anker Ss? Joseph, had drawn four notes amounting together to 2053 dollars 57 cents, in favour of Samuel Heilner Ss? Co., which became due after the date of the assignment. These notes were endorsed by Samuel Heilner Ss? Co., for the accommodation of Cohen, Anker Ss? Joseph, and were given to Florence Ss? Wilson, for goods sold by them to Cohen, Anker Ss? Joseph. Cohen, Anker Ss? Joseph were not, at the time of the assignment, indebted to Samuel Heilner Ss? Co., who on the contrary were indebted to the firm of Moses Cohen Ss? Co., which was composed of Moses Cohen and Abraham Joseph, in the sum of 3634 dollars 82 cents, to Moses Cohen 2000 dollars on a promissory note, and were the drawers of three notes amounting together to 676 dollars 12 cents in favour of the firm of Cohen, Anker Ss? Joseph, which were given for goods sold. On the day of the date of the assignment, Florence Ss? Wilson executed a release to the assignors. On the 9th July, 1816, Samuel Heilner Ss? Co. made an assignment in trust for all their creditors who should within thirty days execute a release; and on the same day the defendants, as assignees of Moses Cohen, Levi Anker and Abraham Joseph, executed a release of the debt due to them.
On the trial, it was proposed by the plaintiffs’ counsel, to prove by the testimony of Abraham Joseph, what were the instructions given the day before the execution of the assignment by the assignors, in the presence of the assignees, to their counsel for drawing the deed, in order to shew that a preference was intended to be given, not to Samuel Heilner Ef? Co. personally, but to the four notes drawn by Cohen, Anker Ss? Joseph in their favour, in whatever hands they might be. The Court refused to admit the evidence and reserved the point. The jury under the direction of the Chief Justice, found a verdict in favour of the plaintiffs, and the case now came before the Court, on a motion by the defendants, for a new trial, and on the reserved point above stated.
Binney, for the defendants.
The question is, whether by the assignment of Cohen, Anker Es? Joseph, a preference is given personally to Samuel Heilner Esff Co, or to the notes indorsed by'them. By the terms of the deed which are always understood to convey the meaning of the parties, a personal preference is plainly pointed out. This kind of preference is the object of the instrument throughout. Persons,are always spoken of, and not classes of debts. The nature of the preference must be fixed at the time of the execution of the assignment, and cannot depend upon circumstances to occur subsequently, which is the conclusion to which the opp'osite argument leads. If the preference was given to the notes, it involves the inconsistency of making it depend on the act of those upon whose paper the assignors were in relieving them from their accommodation indorsements, over whom the holders of the notes in question had no control. The proviso in relation to this subject, furnishes strong argument in favour of the preference being'personal; for it cannot be questioned that the plaintiffs could' claim no preference, if Cohen, Anker Eif Joseph had been on any of their paper which was outstanding, nor could the holders of the notes, whom they are supposed to represent. But by consideringthe preference as personal, every thing is made to harmonise. Two descriptions of creditors are generally preferred in Philadelphia. Those of whom money has been borrowed, in which case the person cannot be separated from the character of the debt; and drawers and indorsers of accommodation notes. In these cases, a preference is considered as called for by an honorary obligation, and is almost always given. The note is generally in the hands of a third person, and the preference is intend ed to protect the friend who has made himself responsible, If the preference was intended for the notes, it would have been so declared, and if Florence & Wilson, in whose hands jt js supp0se¿ they were known to be, were the objects of it, it is extraordinary that this debt was not mentioned, as well as that for which they were personally preferred.
The evidence of Abraham Joseph went to prove, that the intention declared,by the assignors and assented to by the assignees before the execution of the deed was, that the holders of the notes in question should be secured. This is.repugnant to the terms of the assignment; and if the understanding of the parties were as different from the assignment as black from white, the assignment must prevail. It was upon the color of the deed that the other creditors relied when they executed their releases, and they are not to be affected by private understandings between the parties with which they could not be acquainted. The dangers arising from the admission of parol testimony in opposition to a written instrument, are far from speculative. The consequences of departing from the sure guide of written evidence, and depending on the uncertain and slippery memory of witnesses,are deeply impressed on the mind of every lawyer, and of every Court. At law the rule is uniform, that parol evidence cannot be received to vary a written agreement on any ground, whether of fraud, mistake, or trust, though a latent ambiguity may be explained ; as where there are two persons or two manors of the same name, parol evidence may be given to shew which was meant. In the deed under consideration there was-no latent ambiguity. In equity, the rule, though a little fluctuating, seems to be now settled. When a party goes into equity, it is to have an agreement carried into effect, not to obtain damages for non performance. Where the plaintiff asks for a specific performance, the defendant may shew mistake, fraud, omission, or trust. Where the plaintiff comes with an imperfect agreement, alleging that it means what it does not express, chancery will not amend it, and then decree a performance. Where the scrivener has made a mistake, the complainant may have it corrected; but lor .this purpose the written instructions must be produced ; lor chancery will not permit the scrivener to be sworn in order ro prove the verbal instructions he received. Thus the rule is now settled in England, Culnan v. Cooke, 1 Sclu c¿? Lef 39. Rich v. Jackson, 6 Vez.jr. 334. (note.) Wool-am v. Herr, 7 Vez.jr. 211. 1 Dickens,. 295. 2 Vez. 195. This Court is so sensible of the mischief of introducing evidence of this description, that they will not extend the doctrine further than it has already been carried. The first case in Pennsylvania, was Hursfs lessee v. Kirkbride, in which the Court permitted parol evidence to be given of conversations between the parties at the time of the execution of the deed. It was ruled on the authority of Harvey v. Harvey, an early equity case in England,hnt is clearly a deviation from the law as it now stands in that country, and although our Courts have recognised its authority, they have done so with regret, and have never gone beyond it.' Besides it was a case of flagrant fraud. In Reichart v. Castator, 5 Binn. 109, declarations of one party in the absence of the other were rejected. If the trusts of the assignment can he varied by parol proof of an intention different from that expressed on the face of it, a fraud is committed on the creditors who released on the faith of the deed, and who .are purchasers for a valuable consideration. If the preferences' intended to be given, were different from what were indicated by the instrument itself, this ought to have been communicated by the grantors to the creditors before they executed their releases ; it was their duty to do so, for it is absurd to require the creditors to enquire whether any secret trust existed different from what appeared in the deed, to which alone they could be expected to look. Drum v. Lessee of Simpson, bears no resemblance to this-case, for there the person against whom the parol evidence was used, was’not a purchaser for a valuable consideration.
If Florence had an equity, the suit ought to have been brought in his own name.
Randall and Phillips for the plaintiffs.
The object of the evidence of Abraham f 'oseph was to shew, what was the intent of the parties at the time of the execution of the assignment. The danger resulting from the admission of evidence of this description, is rather speculative than real; and although our Courts have avoided laying down any general rule on the subject, they have repeatedly received it under the circumstances of particular cases. It was admis.sible in this case for several reasons. In the first place, there was a latent ambiguity, to explain which, and to ascertain the object of preference, it was proper to give parol evidence. Again : In cases of fraud, mistake, or trust, conversations between the parties at the time of the execution of the instrument, may, according to the current of the PennSyivania decisions, be given in evidence. Thompson v. White, 1 Dali. 424. Wallace v. Baker, 1 Sinn. 610. Lessee of Dinkle v. Marshall, 3 Birin. 587. Christ v. Diffenbach, 1 Serg. & Rarwle, 464. Drum v. Lessee of Simpson, 6 Binn. 478. The present case comes within the principles of these authorities in two ways ; for if the assignment expresses a different intention from that entertained by the parties, it is plainly a case of mistake; and if a preference is given to Samuel Heilner W Co. to whom the assignors owed nothing, it must have been in the character of trustees for Florence & Wilson, to whom the notes belonged. T.he objection that the evidence was improper because third persons would be affected by it, who had no notice, at the time of executing their releases, of the circumstances offered to be proved, is unfounded. The general creditors saw upon the face of the deed that the amount of these notes was to be paid as a preferred debt, and it was immaterial to them whether the preference was personal or to the notes j the sum to be subtracted from the general fund was, in either case, the same.
But putting the testimony of Abraham Joseph out of view, the intention of the parties may be gathered from the instrument itself, taken in connection with their situation. The construction must be liberal in favour of those who were intended to be benefitted by the assignment. Mason v. Pritchard, 12 East. 227. S. Heilner- & Co. were not originally concerned in the transaction. They were not creditors of Cohen, Anker Joseph; on the contrary, they were indebted to them; so that it was impossible-that a preference could be given to them, except as they were connected with these notes, which they endorsed solely for the accommodation of Cohen, Anker Joseph, and so the trust expressed in the deed declares. It is to pay them 2053 dollars 57 cents, for notes lent or endorsements. It is certainly true, that endorsers of accommodation paper are, in general, considered sacred, and this furnishes an argument in our favour. The best way to secure them is to pay the notes, in whatever hands they may be, and thus release the endorsers. Samuel Heilner Of Co. personally could derive no benefit from the assignment without having taken up these notes. The consequence of requiring them to do this would be to produce cir-1 .*• ° 1 cuity, and, m some measure, to frustrate the object of the assignment, which was to give them the most ample security, and in the least inconvenient manner. By the release of Florence Wilson to Cohen, Anker £s? Joseph, executed on the day of the date of the assignment, the notes in question were extinguished, and the consideration of the release was the benefit, they expected to derive from the preference given in the assignment. As to the proviso with respect to paying all paper endorsed by the assignors, it could not apply to the case of Samuel Heilner & Co., between whom and the assignors there was no accommodation paperj except these four notes.' Here was a fund assigned for the payment of a particular debt, and whosoever was equitably entitled to that fund had a right to follow it. Miller v. Ord, 2 Binn. 382. Clason v. Morris, 10 Johns: 524. M(Kinley’s' case, 1 Johns. Ca.137. Waddingtonv. Vredenburg, 2 Johns.Ca. 227. Wright v. Morlin, 11 Vez.jr. 22, 23. Brown v. Weir, M. S. Rep.
The case of Brown v. Weir, settles the question with respect to the form of action. Samuel Heilner £s? Co. were trustees for Florence Wilson, who were entitled to use their names for the enforcement of their own rights, even without their consent.
Since reported in 5 Serg. & Ramie, 401.

Opinion:
Duncan, J.
delivered the opinion of the Court.
A verdict was given for the plaintiffs under the recommendation of the Chief Justice, before whom the cause was tried, subj'ect to the opinion of the Court on the construction of the assignment of Cohen, Anker Joseph.
The question is, whether, on the construction of the assignment, the preference -was a personal one or covered the notes mentioned, whoever might be the holders. These notes were drawn by Cohen, Anker £s? Joseph, and indorsed by Heilner Co. to Florence £s? Wilson, for the accommodation of Cohen, Anker £s? Joseph, for.goods bought by them from Florence Wilson. They were not due at the time of the assignment, but remained unpaid in the hands of Florence Wilson. On the 1st June, 1816, the day on which the'assignment was executed, Florence £s? Wilson released Cohen, Anker &? Joseph. On the 9th July, Heilner £5? Co. likewise made an assignment; and on the same day, the defendants, as assignees, released Heilner &? Co. The assignment of Cohen, Anker <§• Joseph was on the following trusts : 1st. To pay and satisfy the following named persons the following sums, to wit: Lewis Allen and several persons by name, being for money by them respectively lent; and secondly to pay and satisfy the following named persons the following sums of money, being for notes lent or indorsements, to witSamuel Heilner & Co. the sum of 2053dollars, the notes to secure payment of which this action is brought; to Florence & Wilson the sum of 6490 dollars ; and to several others by name. It was provided by the assignment, that no one of the debts before mentioned, should have any preference or priority in the order of payment, but the same should be paid rateably and in equal proportions, according to their respective amounts, out of the monies recovered, until the whole should be paid and satisfied. And it was further provided, that, no one of the' persons, creditors, preferred and named, as aforesaid, should receive their proportion, upon whose paper Cohen, Anker &? Joseph should remain endorsers until they should have taken up the said notes, or otherwise freed them from their responsibility as indorsers.
The construction of every writing depends on the fair import of the terms used as applied to the subject matter. It is a sound and settled rule of construction, that every clause and every word are to be considered, none rejected that are not insensible or inconsistent, and, as far as is consistent with the general intent, each to have its effect. The plain object, the general intent of these assignors, was to provide for the payment of two classes of debts : one arising from a direct loan of money, the other arising from notes lent, or indorsements given; those which their friends, by their indorsements, on'the event which had taken place, their failure, were bound to pay. I cannot draw the conclusion contended for on the pan of the defendants, from the use of the words, persons, and persons before named; that this is a nomination of persons, and that they take nominatim. The names of the indorsers were necessarily introduced to designate this preferred class of debts; they were used, not as a description of persons, appointees by name, but ás a description of the debt intended- to be preferred. It was the appropriation of a fund to these classes of debts—it ran with the debt, whoever mi ght be the creditor. Because the indorsers were liable to pay before application was to be made to the fund, it did not require the indorsers first to pay the note, and then to come in on the. fund. The raising the money in the first instance might be ruinous to the indorsers. No good could result from this circuitous course; no benefit arise to any one ; for it would be the duty of the assignees to retain the specified amount of the notes before a dividend could be made among the general creditors. The holders of the notes, through the medium, and in the name of the indorsers, who would stand as the trustees for the holders who had the beneficial interest, had the right to apply directly to the fund. In the proviso regulating the equality of distribution among those two classes, the word, persons, is dropped, and the word, debt, is substituted as synonymous ; no one of the debts before mentioned shall have any preference or priority in the order of payment, but that the same, i. e. the same debts, not the above named persons, shall be paid in equal proportions, according to their several amounts, until the -whole shall be paid and satisfied. The term, persons, is used in the same sense, as to lenders of money and lenders or indorsers of notes ; it would be difficult to maintain the ground taken by the defendants ; that if the lenders of money had taken notes and indorsed them, these notes were riot to be preferred because they had been indorsed ; and it would be idle to require the holder to coerce payment from the indorsers, when he was willingto accept of payment from the debtor,to discharge the indor^ sers and to release the drawer on his terms. Here the notes had some time td run ; it was well known to Cohen, Anker BP Joseph that they were in the hands of Florence B? Wilson, and they appoint this mode of relieving the plaintiffs; and when the holders of the notes came into the measure, release Cohen, Anker B? Joseph, and, by so doing, release the indorsers, these acts would be substantially the same as to all parties as if the holders had received payment from Heilner BP Co., and they had demanded payment of these notes. The assignees agree to this course, Cohen, Anker B? Joseph agree to it, Heilner BP Co. agree. Why may it not be done directly, instead of performing the ceremony of resorting to Heilner B? Co., and then Heilner B? Co. resorting to the fund particularly when all interested agree to it. Now the suit being brought in the name of Heilner B? Co., is conclusive evidence of their assent, until they dissent; and j <j0 not ¡noff that the Court would suffer them to do this, after their discharge, by releasing the drawers. The . , , , , judgment is not to be pronounced ^y catching at a particular word, but by considéring the scopé and end of the whole instrument; and, as is said in Hobart, 273, the law being a judge of any act, deed, or bargain, consisting of divers parts, all tending to one end, doth judge of the whole, and give every part his office to make up the general intent, and doth not break the words in pieces. This construction renders the sense consistent throughout, and makes the preference what it was intended to be, a real and substantial one ; whereas, on the restricted construction, under the circumstances of this case, and in many that must occur under assignments such as these, and I suppose this is the usual form of this most common species of transfer of property, and provision for payment of debts, the intended preference would be unavailing and illusory. There is something here so much approaching privity of contract, so much a covenant, running with the debt, that the .difficulty with me is, whether, on another ground reserved on the trial, the form of action, the verdict ought not to be set aside, inasmuch as there was such privity between Florence Wilson, and the defendants, and this fund, as that this action ought to have been brought in their own names. But I am not able to distinguish this from the case of Brown for the use of Phillips v. Weir, lately decided in this Court; and it is not straining the construction too far to consider Heilner 8p Co. as trustees for Florence Wilson, their names used, for the benefit of whoever might be concerned in interest; and then, on common law principles, the chose in action could not be assigned so as to enable the assignee to support an action in his own name, nor could the cestuy qui trust bring the action in his own name, yet in both cases the Court will take care of, and protect these equitable Interests, and would not suffer the party whose name was used, to release or discontinue the action. In a court of equity, In a case like this, the party for whose use the suit is brought having the beneficial interest, would be admitted to sue and assert his right in his own name ; but, in common law courts, the forms do not always admit of this; yet, in these Courts, if an agreement is made with A, to pay money, or do any act for the use of B, an action can be maintained in the name of B. United States v. Kennan, 1 Peters, 168.
The Court agreeing in opinion that this is the legal construction of this instrument, there is no strict necessity to give an opinion on the evidence rejected, which was offered by the plaintiffs to explain and to vary the writing; but as it might countenance an opinion, that the accuracy of the decision at Nisi- Prius was doubted, it is best at once to declare the unanimous judgment of the Court, that the evidence was properly rejected. It is, however, not intended to go into the general doctrine how far, under certain given circumstances of fraud, or mistake of the scrivener in varying from his instructions, such testimony is admissible to reform a writing; yet I would hesitate long before I would admit that, in» dependent of alleged fraud, or omission in fact, or variance from instruction given to the scrivener, the mistake of the parties as to the law, or their ignorance of the legal effect of the acts, or of the words used by them, would be grounds for reforming a deed, either in Courts of law or equity. Of this, however, no opinion is now given ; but, distinct from the general principles of the admission of such testimony between the parties, parol evidence never can be received to vary a written agreement, even although a clear mistake was proved, ora departure from written instructions, tó affect the interest of third persons, uninformed of the facts, and who have bona jide, and for a valuable consideration, acquired rights under it. Here the rights of third persons would be affected; the releasing' creditors, who on the credit of the deed of assignment executed releases of their debts, who are considered as purchasers, and whose rights must stand or fall by the interpretation given to the instrument. But really, if this evidence had been admitted, it would have cut up the action in the name of these plaintiffs by the root; for it was offered to prove that the names of Florence <§• Wilson should have been inserted instead of Heilner 8$ Co., and that that was the true agreement of the parties, thus stripping the present nominal plaintiffs of all right, both in law and equity, of all interest, both nominal and real, legal and equitable, and conferring all right, both in name and in reality, on Florence 8f Wilson ; in which case, the action would have been clearly misconceived. The new trial.is refused. \
New trial refused.