Court Opinion

ID: 8259281
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:51:55.64688+00
Date Added: 2024-06-11T16:43:07.185881
License: Public Domain

Lewis, P. J.,
delivered a dissenting opinion.
I can not concur in the conclusion reached by my learned brother judges, for the following reasons :
Before the enactment of the amended section, 354, the material part of that section read thus: “Every voluntary assignment of lands, tenements, goods, chattels, effects, and credits, made by a debtor to any person in trust for his creditors, shall be for the benefit of all the creditors of the assignor, in proportion to their respective claims.” At the same time section 373 was in force, just as it now remains. This section, after providing that the assignee shall appoint three successive days for the auditing of claims against the estate, giving due notice of time and place, proceeds thus : “And all creditors who, after being notified as aforesaid, shall not attend at the place designated during the said term, and lay before the assignee the nature and amount of their demands, shall be precluded from any benefit of said estate; * * * provided, that any creditor who shall fail to lay his claim before said assignee during said term, on account of sickness, absence from the state, or any other good cause, may, at any time, before the declaration of the final dividend, file and prove up his claim, and the same may be allowed, and the remaining dividends paid thereon, as in the case of other allowed claims.”
These two sections were independent of each other, and both were capable of enforcement to the letter, without the least interference, repugnancy, or inconsistency. Section 354 regulated, in general terms, the structure of *199the deed of assignment, and its beneficial application to all creditors of the assignor, without exception. Section 373 prescribed the terms upon which each individual creditor was to secure the benefits provided for, and the conditions, with a qualifying proviso, which would preclude him from such benefits. This qualifying proviso gave, in certain contingencies, to the tardy creditor, who had forfeited his primary equal footing with other creditors, a right of participation in the “ remaining dividends ” only, meaning, clearly, such dividends as were not yet declared. It is useless to pretend that this limitation to the “remaining dividends” could have been extended to dividends previously declared, by virtue of anything contained in section 354, as it then stood.
But it seems to be argued that the amendment of section 354, approved March 7, 1885, develops a policy of the law, which is incompatible with the limitation in section 373 to the remaining dividends, and permits an enlargement of the tardy creditor’s privilege, so that he may participate in dividends previously declared. This amendment consists of the following addition to the words already quoted: “And every provision in any assignment providing for the payment of one debt or liability in preference to another, shall be void, and all debts and liabilities (including judgments entered by confession thirty days previous to such assignment) shall be paid pro rata from the assets thereof; * * * ” The amendment is in continuation or amplification of what has just been said about the general effect of the assignment, and emphasizes, or intensifies, so to speak, the direction that all the creditors of the assignor shall be placed on an equal footing, by forbidding any preference of one over another, and by commanding that all the debts and liabilities shall be paid pro rata. It has nothing to say about the terms, conditions, and limitations imposed by section 373 on each individual creditor who would avail himself of the assignment, bnt leaves *200them all, together with the proviso limited to certain contingencies, just where they wTere before the amendment was adopted. I do not see how it is possible to find in the amendment any modification or repeal, even by implication, of the conditions and limitations plainly expressed in section 373.
It may well be supposed that the legislature acted on the presumption that, generally, the assignee’s payment of his first dividend would proximately exhaust the money assets realized up to that time, so that there would be nothing left of the sum divided to pay on claims subsequently allowed. Hence, the provision that the tardy creditor, upon being admitted after the first dividend, may only participate in the .-dividends subsequently declared. In this case, however, it is alleged that the assignee had a surplus, in his hands, after payment of the first dividend on all the other claims, out of which he is able to pay the same dividend on the plaintiffs ’ demands, and that he is willing to make such payments, if this can be done consistently with his duty under the law. But this would impinge upon the rights of other creditors who, by their superior diligence, have acquired a claim upon this surplus for augmentation of future dividends. The facts stated can not make a difference in the meaning of the law. The statute must have but one interpretation for all cases coming within its purview. If it intends that the tardy claimant may participate in none but the later dividends, then such is the law for the plaintiffs’ case, whether the assignee might be able to do something more for them, or not. There is, first, a sweeping direction that the, tardy creditor, in all cases, “shall be precluded from any benefit of said estate.” This direction is then qualified by a proviso which grants a special indulgence in certain contingencies. No court, in my opinion, has any power to enlarge this indulgence beyond the terms in which it is expressed.
No one will question the. office of equity to mitigate or subdue the harshness of the letter, when this may be *201done in consonance with the manifest policy of the law. “ Equity follows the law,” and often finds the law itself in its obvious policy, rather than in the letter. But I have never learned that equity can repeal a statute, or enact a substitute for one. With all deference to my learned brothers, their conclusion, in my view, repeals the provision which, in general terms, precludes the tardy creditor from any benefit of the assigned estate, while it substitutes for the limited indulgence granted him by the proviso, a bestowal of all the rights exclusively reserved i‘or the diligent creditor. This strains the possibilities of equity beyond all reason and precedent.
I can find no analogy whatever between this case and Carpenter v. Dick (41 Ohio St. 295). There was no statute in Ohio that limited the tardy claimant to any particular class of dividends, when once the conditions were such that he might participate at all. Had the word “remaining” been left out of our statute, I should have no hesitation in saying that the present plaintiffs, like the Ohio claimants, would have been entitled to share in all the dividends, whether past, present, or future. Another fact is fatal to the supposedL analogy.. No statute exists in this state, as in Ohio, which makes the condition of assets remaining in the assignee’s hands, sufficient to entitle the tardy claimant to a participation in previously-declared dividends. If the Ohio case has any bearing on the one before us, it is an authority against the conclusion reached by the learned majority of this court. It seems clear to me, that that conclusion reverses the rule laid down by Chancellor Kent: That remedial statutes, when considered in equity, “are construedremedially and idtra, but not contra to the strict letter.” The conclusion is directly contra to the strict letter, which confines the tardy claimant to a participation in the remaining dividends. I think that the able judge of the circuit court construed the law rightly, and that his judgment ought to be affirmed.