Case Name: WILSON against KNEPPLEY and another, Assignees of REED and another
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1823-12-22
Citations: 10 Serg. & Rawle 439
Docket Number: 
Parties: WILSON against KNEPPLEY and another, Assignees of REED and another.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 10
Pages: 439–441

Head Matter:
[Philadelphia,
December 22, 1823.]
WILSON against KNEPPLEY and another, Assignees of REED and another.
IN ERROR.
Assignment in trust, to pay creditors of the first class their debts, creditors of the second class their debts, the payment to be rateably made in proportion to their respective demands, and creditors of the third class, on the same terms as those of the second: provided that no creditor sould be entitled to receive a dividend unless he executed a release in 30 days. There being funds sufficient to pay the creditors of the first and second class in full, and a dividend to those of the third class, held, that a creditor of the first class not releasing, was not entitled to judgment.
On the trial of this cause before Duncan, J. at the Nisi Prius in February, 1823, the plaintiff gave in evidence, that on the 7th December, 1819, Michael Reed and Jlbraham Beidleman, by indenture of that date, assigned and transferred to Peter Kneppley and Philip Reed, all their estate, in .trust, .to convert the whole into cash; and then to apply the monies, after deducting costs and charges, “in the first place, to pay the several creditors of the said Reed and Beidleman in the order hereinafter mentioned, agreeably to the schedule hereunto annexed, marked “B. first class,” or to whomsoever may be entitled to receive the same, their several and respective debts, amounting together to 11,504 dollars and 59 cents. In the second place, all those creditors enumerated in the schedule “ C. second class,” or to whomsoever may be entitled to receive the same, their several and respective debts, amounting to 5,138 dollars and 52 cents, the payment of which is to be rateably made to and among the said parties in proportion to their said demands. And in the third place, all those creditors enumerated in the schedule- “D. third class,” or to whomsoever may be entitled to receive the same, their several and respective debts amounting to 15,515 dollars and 14 cents, and the payment of which is also to be rateably made to and among the said parties in proportion to their said demands; and lastly, to pay the surplus if any there should be to the said Michal Reed and Mráham Beidleman, their executors, administrators or assigns. “Provided always, that no creditor of the said Reed and Beidleman, shall be entitled to receive any dividend under this assignment, unless he, she, or they, shall execute and deliver to the said Reed and Beidleman, a general 'release of their respective debts on or before the 7th day of January next ensuing the date thereof, reserving, if need be their or his claim upon the other party or parties to the contract or engagement holden by such creditor.”
In the schedule {iB. first class,” among others was the name of the plaintiff, “ Edward Wilson, a due bill 813 dollars 94 cents.1’
Schedule ’A. exhibited the property assigned, to be in notes and book debts 19,955 dollars 84 cents. Cash in hand 9,493 dollars 84 cents.
A statement by the defendants of the monies received and paid by them, under the trust, showed, that all the creditors of the first class, except the plaintiff, and all the creditors of the second class had been paid in full; and that the creditors in the third class who had executed a release, had been paid 65 per cent, of their demands, and that there remained in cash in the hands of the defendants the sum of 1,204 dollars. And that there were also uncollected debts to the amount of 978 dollars and 22 cents, supposed to be good, besides bad and doubtful debts.
It also appeared, that the plaintiff did not execute a release to Reed and Beidleman on or before the 7th of January, 1820.
The jury found a verdict for the plaintiff for the sum of 946 dollars, and 85 cents, subject to the opinion of the court, whether upon * the whole evidence in the cause, the plaintiff was entitled to recover.
Chauncey, for the plaintiff,
now contended, that the plaintiff was entitled to recover, although he had not released. The words of the proviso are, that no creditor shall be entitled to a dividend, xinless he executes a release, but this word is not applicable to the creditors of the first class, of whom the plaintiff is one, because they were entitled to a payment of their whole debts. And this appears to have been contemplated by the assignors; for- the creditors of.the first class are to receive their several debts, and nothing is said as to their being paid a rateable proportion, but such a provision is carefully inserted as to the creditors of the second and third classes. The obligation of making a release is, therefore, confined to the latter. A liberal construction ought to be made so as favour every creditor equally : and where there is doubt, the words are to be construed against the grantor.
Ewing, contra.
The question is, what was the intent of this assignment. It was to have releases executed in 30 days by all the creditors, in order that the assignors might be secured from arrests. Though it eventually turned out that the creditors of the first and second cliiss would be paid in full, and those of the third receive a dividend, this could not be known at the time of the assignment. The stock in trade was valued at 9000 dollars, and required time to be reduced to cash. When, sold the amount fell short of the appraised value. All the rest of the estate, viz: about 19000 dollars, consisted of outstanding debts and notqs. It could not be known in 30 days what these would yield.

Opinion:
The opinion of the court was delivered by
Gibson, J.
The letter of the proviso which declares that no dividend shall be received by a creditor who did not deliver a general release to the trustees within thirty days from the date of the assignment, undoubtedly embraces the case of the plaintiff; and nothing but a manifest intention on the part of the debtors to restrain its operation to the subsequent classes of creditors would justify us in letting in the plaintiff now, who it is conceded has not executed a release. This intention it is said is to be collected from the omission to provide for payment of the creditors of the first class, rateably, in the event of the fund falling short; as is expressly provided with respect to the creditors of the subsequent classes: consequently that the plaintiff and the other creditors of the first class were viewed as persons who would in any event be paid in full; and that the release of a debt which was to be discharged by actual payment would be nugatory and a condition on which we ought not to intend the debtors meant to insist, the words being well enough satisfied by applying them to the subsequent' classes. To this it is answered, and I think with conclusive force, that the great object of the debtors was to procure a discharge of their personal liability before actual payment of the debts out of the fund, a considerable portion of which was in stock which could not be turned into cash within the period of thirty days. These provisoes, are, in every case, unquestionably designed to answer the intention of procuring a discharge of the debtor's person, by inducing the creditor to throw himself exclusively on the fund; there is nothing to show that such was not the object here. It would be highly unreasonable to suppose the debtors meant to subject themselves to the vexation of being sued by any creditor who should be entitled under the trust, between the expiration of the period fixed for the delivery of the release and the time when the trustees might be in a condition to discharge the debtj or that the effects assigned should be at the risque of the debtors during that interval. This is one of those plain cases which can receive no illustration from argument; and I shall, therefore, only add that we can discover nothing in the terms of the assignment to give colour to the notion that the debtors in this case did not intend to insist on releases from the creditors of the first class.
Judgment f<?r defendants.