Case Name: SCOTT and others against MORRIS and another, assignees of HUMPHREYS and another
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1822-12-30
Citations: 9 Serg. & Rawle 123
Docket Number: 
Parties: SCOTT and others against MORRIS and another, assignees of HUMPHREYS and another.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 9
Pages: 123–125

Head Matter:
[Philadelphia,
Dec. 30, 1822.]
SCOTT and others against MORRIS and another, assignees of HUMPHREYS and another.
CASE STATED.
If creditors release, under an assignment by the debtor in trust to pay their respec- . ,tive demands in full, the surplus to go to the debtor, and the fund prove sufficient to pay the whole debt and part of the interest up do the payment of the last dividend, they are entitled to receive such interest. '
An amicable action was entered by Thomas Scott, George Trotter, and John Tilford, against George Morris and Benjamin Sharpnack, assignees of John Humphreys and. Burdon B. Carter, lately trading under the firm of Humphreys and Carter, and ¿ case was stated for the opinion of the court. >
In March, .1817, Humphreys and Carter made an assignment to Morris and Sharpnack, in trust. 1st. To pay all the persons to whom they were indebted for money lent, or by reason of the in-dorsement of their promissory notes, or by a loan or exchange of their notes for the accommodation of the said Humphreys and Carter, the amount of their respective demands in full. 2dly. To pay all other creditors. of the said Humphreys and Carter, the amount of their respective demands in full, if the monies remaining should be sufficient: but if not sufficient, then a rateable-proportion of the monies remaining after the payment of the first class. 3dly. To pay the surplus, if any, to the said Humphreys and Carter, their executors, administrators, or assigns:.provided, that no creditor or creditors should be entitled to any payment or dividend, unless he or they on or before the 2d June, 1817, executed a full and effectual release of his or their demands against Humphreys and Carter, and each of them. On the 12th May, 1817, the plaintiffs, and other creditors of the-first class,- executed-releases conformably to the condition, and the assignees had paid them the entire principal of their debts, but declined paying any interest upon them, ■ though they had in their hands sufficient funds to pay 43 per cent, of the interest, calculating up to the time of paying the last- dividend. The question submitted to the court was, whether the assignees were bound to pay to these creditors the amount of interest in their hands.
Duane, for the plaintiffs.
The provision in this assignment embraces the respective demands of the creditors in lull, and these words include interest as well as principal. Interest follows the principal as a necessary consequence. The creditors released on condition of receiving their whole debts, and they would losé a part of what is due to them, if they should lose the interest. Nothing bufan inadequacy of funds can subject them to this loss. If the creditors do nqt receive it, it must by the assignment return to the debtor. As between the debtor and the creditors, there can be no question, but the creditors are entitled to the amount of the interest.
Chauncey, contra,
contended, that under the words requiring the assignees to pay “ their respective demands in full” the creditors were not entitled to interest in the event that had happened. Demands, as used here signify demands at the. date of the assignment. Besides, the plaintiffs have executed a release of all demands, by which their claim to interest is extinguished. The general rule in bankruptcy is for the commissioners to compute interest upon debts no lower than the date of the commission, because it is a dead fundi and there is no direction in the act for that purpose. Cook’s B. L. 4th ed. 181. Interest is allowed on a note only where it specifically carries interest, lb. 182. It is irue where there is a surplus creditors are allowed interest from the date of the commission in preference to the bankrupt, lb. 535. The Chancellor however possesses large equitable powers in bankruptcy, which this court would not pretend to exercise over the funds in the hands of assignees.

Opinion:
The opinion of the court was delivered by
TilghmaN, C. J.
This cause comes before üs bn a case stated to which I refer.
The trust, in the deed of assignment, under which the plaintiffs claim, is, that the defendants will in the first place, pay to the creditors of the first class (to which the plaintiffs belong) " the amount of their respective demands in full." The word demand is very comprehensive. It includes every thing which the creditors would have ,been entitled to recover by suit. And there is no doubt, that interest might have been recovered, as well as principal. . Consider the nature of the debts to which the first class was restricted; "debts due for money lent to Humphreys and. Carter, or by reason of the indorsement of their promissory notes, or by a loan, or exchange of notes, for their accommodation. " In all these cases the creditor would have had to pay his own money for the benefit of Humphreys and Carter, and nothing can be more reasonable than to allow .him interest, from the time of payment. Consider also, what is to become of the surplus in the hands of thb assignees, after the payment of all demands. It is to go to Humph-reys and Carter. ' Now surely, it could not have been intended, that the creditors should lose their interest, and the debtor' put. the' money in his pocket. It does not appear, in the state of the case, of what the fund in the hands of the" defendants consisted. But it"is hardly possible, that it should have been altogether a dead fund. Probably it consisted, in part at least, of outstanding debts, which would carry interest. And if so, it would make the injustice of the debtor's pocketing the surplus, the more glaring. There is not a perfect analogy between the case before us and that of commissioners of Bankrupt. For, although the statutes of bankruptcy, may not contain any express provisions respecting the payment of in terest, yet the chancellor exercises larger equitable powers, than this court would venture to assume. I think it safer to put the case on the words of trust contained in the deed of assignment. These words on a'fair construction, include interest, and therefore the' creditors are entitled to interest. It was remarked by the counsel for the defendants, that the plaintiffs had executed a release, by which their claim of interest was extinguished.' But the same agreement would prove that the. principal also was extinguished. And so, in truth it is as regards the debtor. The plaintiffs could no longer support an action against him for the principal. But they have a good claim under the assignment, and then-the question is, to how .much are they entitled; which-brings the point at last, to the construction of the deed, on which I have already ex* pressed my sentiments. On the whole then, I am of opinion, thát the plaintiffs are entitled to interest up to the time of the payment of the last dividend. . ' -